Starting a business in 2022
New year, new me, new business. Over the past year, nearly half of all Brits started a side hustle, with over 800,000 of them taking that a step further and setting up new businesses.
The new normal of flexible working conditions has been a boon to thousands of small businesses across the UK, allowing them to grow and branch out like never before. So, why not get in on the action? If you’ve got a great idea and the drive to turn it into something more concrete, then we’ve got some top tips to help you start your business in 2022.
- How to write a business plan
- What do I need to include in my business plan?
- How do I register my new business?
- How do I fund my business?
- How do I market my business?
- What insurance do I need for my business?
How to write a business plan
The first step in turning an idea into a fully fledged business is planning. By drawing up a solid business plan, you’ll be able to focus your attention to the areas that need the most work and ensure that your idea is truly workable.
The main aim of a business plan is to establish what kind of business you want to run, how you’re planning to operate and how you’ll go about getting everything off the ground. Start by thinking about the type of business you want to run and who your customers are going to be. Is there an established market for the products or services you’ll offer? If so, how will you differentiate yourself from the competition? Thorough market research at this stage is essential, as it allows you to see what others are doing and learn from their successes and mistakes.
You’ll also want to think about where you’ll be operating your business from. Will you start small by working from home, or are you planning to rent an office or commercial premises from the beginning? This will mainly depend on the type of business you’re looking to run, but it’s also worth considering future growth and scalability and how that may be affected by your operating base.
What do I need to include in my business plan?
Once you’ve decided on the type of business you want to run, it’s time to put together your business plan. Make sure to include:
- The type of business
- The products or services you’ll provide
- The business name and image
- What funding you’ve got
- What the budget is
- What the start up costs are
- Where you’ll be based
- Marketing and advertising
How do I register my new business?
As a legal requirement, every business needs to be registered with HMRC and Companies House, either as an incorporated company, a sole trader or a partnership. How much this costs will depend on which business type you choose. Once you’re fully registered, you’ll receive your Certificate of Incorporation and can then register for corporation tax.
You’ll also need to make sure that your operating premises are filed under the correct use class with the Local Planning Authority.
Once all this is done, you’ll be able to start trading. Make sure to get it done early though, as everything needs to be registered at least 28 days before your business opens to customers.
How do I fund my business?
One of the biggest challenges that a lot of entrepreneurs come across when setting up their businesses is funding. The cost of starting a business can easily skyrocket, especially if you’re operating in a particularly crowded market or dealing with a specialist product or service. Therefore, funding everything out of your own pocket, whilst the easiest way to go about things, may not be an option.
Your next thought may be taking out a bank loan, but as many start up owners will tell you, this is often easier said than done. What may be easier is making clever use of the overdraft on your business bank account. By doing this, depending on the terms of your account, you could have an overdraft of £500 to £25,000 to make use of. Be careful, though, as you’ll have to pay interest throughout the time that your account is in arrears. This may be a good short term solution, provided you can top the account back up reliably, but it’s definitely not recommended long term.
A more conventional way of going about things would be with a business grant. Through a grant scheme, provided you meet certain requirements, you’ll be given an amount of money to invest in your business. Meeting those requirements, however, can be tricky. Some grants are only given to certain business types, or those operating in a certain location, and some may require matched funding, meaning they’ll only hand over the cash if you can supply the same amount. If this sounds like a viable route for your business, take a look at the government’s business finance support page for more information.
Of course, there are a multitude of other funding options out there to be explored, so take the time to do your research and find the ones that suit your business the best. Some other routes to consider include:
- Peer-to-peer lending
- Invoice finance
- Asset finance
- Partnership with another business
- Private investment from friends or family
How do I market my business?
Marketing is a key pillar for any business. If no one knows you exist, how are you expecting to build your customer base and grow your business? The power of a good marketing strategy will allow you to attract new customers from far and wide and take your business to the next level.
What style of marketing you go with depends entirely on the type of business you’re running and who your target market is. If you’re looking to bring in people in your local area, then traditional poster and leaflet campaigns are still a great way of getting the word about your business out and bringing in new customers.
Alternatively, if you’ve got an online presence or are looking to attract business from further afield, then social media is a fantastic marketing tool to take advantage of. Social media allows you to build a community around your business, with direct feedback from customers giving you great insight into what they want from your business, and how you can adapt in the future. You may also want to consider Google paid ads, which lets you bid to put ads on the front page of Google.
If this all seems overwhelming, then you can always contact a marketing agency who will handle all the complicated stuff for you. Bear in mind, this will obviously cost more than doing it yourself, so keep your budget in mind when considering your options.
What insurance do I need for my business?
Going into business for yourself is potentially a huge risk, and there are a lot of factors that will constantly play on your mind as a business owner. But, with the right insurance in place, a lot of those worries can be set aside, allowing you to operate your business at full confidence.
Obviously, exactly what insurance you should look into will vary depending on the type of business you’re running, but some essential insurance covers for most businesses include:
- Public liability insurance: This keeps you covered if a member of the public suffers an injury on your business’ premises.
- Employers liability insurance: This is a legal requirement if you hire staff. It provides protection in the event that an employee suffers injury or illness as a result of their work for your business.
- Business contents insurance: If any stock, equipment, or anything else kept within your business premises gets damaged, lost or stolen, this covers the cost of any repairs or replacements.
- Business interruption insurance: This will keep you covered if your business has to close for a period of time as a result of something like a fire, flood or extreme weather. However, do note that you won’t be covered in the event of forced closure due to a pandemic, or something else that forces the closure of multiple businesses in the area.