What to do before you start a business: a UK checklist

Starting a business is exciting, and it comes with a long list of things to think about. The good news is that the list is the same for most people, and once you can see it, it's much easier to work through one step at a time.

Here's what we'd sort before you start, in roughly the order it tends to make sense. You don't need to do it all in a week. Tick things off as you go.

The short answer

Before you start a business in the UK, be clear on why you're doing it and how much time you have, choose the type of business and your customers, and work out your numbers. Then decide how you'll set up, sort your bank account, insurance and any licences, and get your name, website, paperwork and launch plan ready.

1. Be clear on why, and how much time you have

Before anything else, it's worth being honest with yourself about two things.

• Why you want to do it. More freedom, more income, doing work you love, building something of your own. Your reason will help you make lots of later decisions.
• How much time you can give it. A few hours around other work, a few days a week or full time. Some businesses suit one, some suit another.

If you're still weighing it up, our free checklist, Is starting your own business right for you?, walks you through seven questions at your own pace. Your answers stay on your screen, and you can download the result to keep.

2. Choose the type of business

It helps to pick work you'll enjoy, because you'll be doing it most days. Think about what you're good at, what you like doing and who you'd like to work with.

If you're not sure where to start, have a look at the Bases. A Base is a starting point for a type of business, like cleaning, mobile food or coaching. Browsing them is a good way to see what different businesses involve, how they run and roughly what they need to get going.

3. Know who your customers are

A clear picture of your customers makes almost every other decision easier.

• Who are they? Homes near you, other businesses, or people anywhere in the UK online.
• What do they need? And what would make them choose you?
• Who else serves them? A quick look at who's already around you is a great first step.

You don't need a big research project. Talking to a few people who might buy from you, and looking at what others nearby offer and charge, will teach you a lot.

4. Work out your numbers

Before you commit, you'll want a rough idea of what it will cost to get going and what you might earn. That usually means:

• what it costs to build the business: plan, brand, website and systems
• what you need to start trading: equipment, stock, insurance and so on
• your ongoing costs once you're open
• enough money to cover your first few months
• a forecast showing when you might break even

We've written a full guide to what it costs to start a business in the UK, which breaks this down cost by cost.

5. Decide how you'll set up

Most new businesses start either as a sole trader or as a limited company. The structure you choose affects your paperwork and your responsibilities, so it's worth understanding the difference before you register.

GOV.UK has a clear guide to the ways you can set up a business, including how sole traders and limited companies compare. It also explains when you need to register for VAT. We don't give accounting or tax advice, so this is a good moment to speak to an accountant. We're happy to point you to people who can help.

6. Sort the essentials

These are the things you'll need to sort yourself, whichever way you start:

• A business bank account, so business money stays separate from your own.
• Insurance that fits the work you'll do. What you need depends on your business, so ask an insurer or broker.
• Any licences, permits or registrations your type of business needs. GOV.UK has a licence finder to help you check.
• Premises, a pitch or a venue, if your business needs one.
• Stock and equipment, and where you'll get them.

It's much calmer to sort these early than to find out the week before launch that something's missing.

7. Get your name and brand ready

Your name and how you look are often the first things a customer sees. Before you fall in love with a name, check it isn't already in use nearby, and that you can use it online.

You'll want:

• a business name and a short line that explains what you do
• a logo and a look that's yours, with colours and fonts you can use everywhere
• wording that clearly explains what you offer

8. Set up how customers find you and get in touch

Even a local business needs somewhere people can check you out and contact you.

• A website that explains what you offer, shows your area and makes it easy to get in touch.
• Privacy, cookie and website terms pages, as your website will collect people's details.
• A way to be found on Google, and some way to see who's visiting.
• A simple system for enquiries and customers, so nobody slips through the cracks.

9. Get your paperwork ready

Having the everyday documents ready before you start makes you look professional from day one. Depending on your business, that might include quotes, invoices and customer agreements. If you'll need a team from day one, a staff pack is worth having ready too.

10. Plan your launch

Finally, think about how people will hear about you. A small launch plan helps: who you'll tell first, where you'll post, and what you'll say. Telling people you're open is part of the job, and it's much easier with a plan and a few ready-made materials.

What we take care of, and what you sort yourself

If you'd rather not work through all of this alone, that's what Business Factory is for. We build the core pieces with you, step by step, so you're never left to figure it out alone.

Every Base includes:

• who your customers are, what you'll sell and how you'll make money
• a straightforward business plan and a three-year forecast, with best and worst cases
• your business name, logo, look and brand files
• a 3 to 5 page website, written for you, with privacy, cookie and website terms pages
• set-up so people can find you on Google, with visitor tracking
• a simple customer system linked to your website's contact form
• ready-made quotes, invoices and agreements where you need them
• a small marketing kit to announce your launch
• a step-by-step guide to launching and running things day to day
• a guide to what you'll need to buy, and pointers for setting up banking, insurance and accounts

Things like your bank account, insurance, stock, premises, any licences and enough money to cover your first few months are still yours to sort. We'll flag what you're likely to need and point you in the right direction.

Packages start from £3,495. You can see how a build works, from our first chat to handing everything over.

Frequently asked questions

What do I need to start a business in the UK?

Most new businesses need a clear idea and customers, a plan and the numbers, a way of setting up (usually sole trader or limited company), a business bank account, the right insurance, any licences your sector needs, a name and brand, a website, everyday paperwork and a launch plan. The checklist above takes you through each one.

Do I need to register my business in the UK?

Usually, yes, and how depends on how you set up. Sole traders generally register with HMRC for Self Assessment, limited companies register with Companies House, and you'll need to register for VAT if your taxable turnover goes over the VAT threshold. This is general information, so check GOV.UK's guide to setting up a business or ask an accountant what applies to you.

Do I need a licence to start a business?

It depends on what you'll do. Some types of business need a licence, permit or registration before they trade. GOV.UK's licence finder helps you check.

How much does it cost to start a business in the UK?

It depends on the type of business. Our guide to what it costs to start a business in the UK breaks it down cost by cost. With Business Factory, packages start from £3,495.

What will I still need to sort myself if I use Business Factory?

A few things stay with you, such as your bank account, insurance, stock, premises, any licences and enough money to cover your first few months. We'll flag what you're likely to need and point you in the right direction.

How do I know if starting a business is right for me?

Our free checklist, Is starting your own business right for you?, walks you through seven questions at your own pace. Your answers stay on your screen, and you can download the result to keep.

Your checklist at a glance

1. Be clear on why, and how much time you have.
2. Choose the type of business.
3. Know who your customers are.
4. Work out your numbers.
5. Decide how you'll set up.
6. Sort your bank, insurance, licences, premises and stock.
7. Get your name and brand ready.
8. Set up your website and a way to handle enquiries.
9. Get your paperwork ready.
10. Plan your launch.

Take it one step at a time. And if you'd like to talk any of it through, we always talk first, with no pressure and no obligation. Have a chat.