Starting a business can be a daunting thing, but don’t let fear get in your way of doing what you want to do. Here are my helpful tips and considerations before taking the leap into setting up on your own:

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• Plan your start: If you are planning to take out a mortgage or re-mortgage a property, lenders usually require two years’ worth of accounts for this. If you have the flexibility, get mortgaging/re-mortgaging done before leaving employment. It isn’t impossible to sort if you don’t have two years, but it will certainly make your life less stressful!

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• Look at the current market: Have a look at what your potential competitors are charging, the areas they cover, their length of service in the industry. This will ensure you understand your ideal client and give you an idea of starting prices. It is also important to ensure that you aren’t entering a saturated market – make sure there aren’t already 20+ businesses that are doing the same as you, as this makes it harder to get your foot in the door with new potential clients.

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• Understand your initial costs and timeframes: Depending on the sector you are looking to enter, you might have to sort out licensing, an office, equipment purchased or other time consuming or costly items before you can begin; so take a little time to look at the cost and timescales involved in getting set up.

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• Get the word out early: Marketing yourself can be tricky, certainly when your business is in full swing, so get in early with a “soft launch” of your business, tell your friends and family about your plans, use social media to build interest in what you’re going to offer and sell yourself a little!

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• Invest in an accountant from the beginning: A good accountant is an investment into your business, they will be able to guide you in starting out, help you with the allowable vs disallowable expenses and help you act in the most tax efficient way for your situation. Now, an accountant isn’t cheap, but the value for money that they provide outweighs the outlay in cost (and it is tax deductible!)

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• Set up a separate bank account: This is a legal requirement for a Limited Company, however, if you are starting out as a Sole Trader, I would always advise that a separate bank account is set up, as doing so allows you to keep track of your business income and expenditure more clearly.  

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• Understand your responsibilities: Running a business has many responsibilities; taking care of your clients, marketing your business, doing outstanding work; but you also have responsibilities to HMRC for tax and filing (and Companies House if an incorporated company). Ensure you have a clear understanding of how your taxes work, potential taxes you might need to register for, and what filing and payment deadlines you must meet.

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• Maintaining records: However you have decided to set up your business, and whether you have an accountant or not, it is very important to keep well maintained records. To meet your filing requirements, you will need to provide figures to HMRC and/or Companies House that must be an accurate representation of your business’ finances for the period. This can be done via a spreadsheet, an accounting software, or manually with pen and paper.

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And finally…

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… enjoy it! Yes, setting up a new business can be scary, but once you have taken that leap it is very rewarding, so make sure you take time to enjoy running your own business, and the flexibility it brings, and don’t let day-to-day stresses get you down.