I want to start my own business. What do I need to consider?
Sep 16, 2015
When you start a business there are many things to think about. There are some very obvious things like the structure of your business, whether to buy an existing business or what to name your business but there are other considerations too.
First and foremost, should you set up the business yourself or should you buy a business? Buying an existing business does have benefits – you have an existing client base and a set of accounts that demonstrate how the business is performing. However in order to buy a business, you need capital. You will have to look for investors or try to secure a loan.
Starting up a business yourself means that you should be prepared to take some risks as it may feel like a journey into the unknown. You need a solid idea that you have researched and that you are confident will make money. If you can run your business online, this can significantly reduce costs and mean that all you need is an internet connection and a laptop.
Once you have decided what your business will look like, you should think of a name and also consider the legal structure. There are a number of options – the first is becoming a sole trader, also known as self-employed. This is an easy way to set your business up quickly and more importantly, with no costs involved. All you need to do is register with HMRC to ensure that you will pay less tax. You can still employ staff if you are a registered sole trader.
Your other option is to set up a limited company – it is always best to get professional advice on the available choices due to various tax implications. Registering as a limited company means that you remove your liability for any debts, which is not the case for a sole trader.
Setting up a limited company requires you to register with Companies House, have a memorandum and articles of association and provide a registered office address along with the names of company directors and a secretary.
Return to News