What you need to consider before setting up your business
You have a great idea for a business but don’t know where to start? Firstly, solidify your business idea by creating a business plan. Your aim with this business plan should be that anyone could pick it up and understand what your business is, what your objectives are and how you are planning to get there.
Register your Business
Decide what legal structure is best for your business; are you a sole trader, a limited business or a partnership.
Sole Trader
It is simplest to set up as a Sole trader, but worth considering the fact that you are personally responsible for your business’s debts.
To set up as a sole trader you will need to tell HMRC that you pay tax through Self Assessment. You will then need to file a tax return every year. In order to do this, you should keep records of your business sales and expenses.
Once you’ve chosen your business name you can register it as a trade mark to stop others trading under your business name.
Limited Company
If you form a limited Company its finances are separate from your personal finances. There are more reporting and management responsibilities such as creating articles of association, keeping company records and filing accounts and a Company tax return.
Setting up will require you to register your company with Companies house and register for corporation tax with HMRC.
Partnership
A partnership is the simplest way for two or more people to run a business together. You share responsibility for your business’s debts.
As a partnership you will need to choose a name, choose a ‘nominated partner’ to manage the partnership’s tax returns and keep business records, and register with HMRC.
Are there Rules you need to follow?
You should ensure you have any licences or permits and insurance that you need.
There are particular rules to be followed if you sell goods online, buy goods from abroad, sell goods abroad.
If you store or use personal information you must comply with the General Data Protection Regulations and Data Protection Act 2018 regarding what you do with that data.
If you rent or buy a property you may have to pay Business Rates. Small businesses can apply for a discount on business rates and some businesses pay nothing.
You may be entitled to claim office, property and equipment as expenses.
Taking on People
There are key things you need to do when taking on employees:
- Decide how much to pay them. You must pay at least the National Minimum Wage. The National Minimum Wage varies depending on age. For the current rates you can find this on https://www.gov.uk/national-minimum-wage-rates;
- Check that they have a legal right to work in the UK before they start working for you;
- Check if they need to apply for a DBS check if you work in a field that requires one;
- Get employers’ liability insurance;
- Provide your employee with a written statement of employment. This should be provided on day one of employment;
- Register as an employer with HMRC. You can do this up to 4 weeks before you pay your new staff;
- Check if you need to automatically enrol your staff into a workplace pension scheme.
The role of HR
There is a lot to consider when starting a new business. Taking on people is a great step for a new business. You have the manpower to drive the business forward. But with this comes the responsibility of ensuring you are doing everything right. Clover HR can take that stress from you so you can concentrate on growing the business. We provide a bespoke service to each client depending on their business needs. Contact us today to see what we can do to help your business flourish.
If you would like further business change guidance or support on this matter or require advice on other people management matters please contact Clover HR on 0121 516 0299 or email us at info@cloverhr.co.uk
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