Start a Business: You 10-Step Guide

Starting a business is no small task. However, with a good idea, determination, and the proper paperwork, anything can be possible.

More than 5.5 million small businesses exist in the UK, with fewer than 49 employees. This figure comprises 99.2 per cent of the UK’s total businesses. Additionally, medium-sized companies with 50 to 249 employees account for 36,900 UK businesses [1]. 

That is a significant portion of the country’s economy, highlighting how essential it is for anyone to be able to go through the process of launching their own business. Anyone can become a business owner with enough passion, a strong vision, a plan of action, and a realistic timeframe.

Despite the hard work that goes into the process, becoming a business owner comes with unique benefits. Business owners have autonomy over the way they conduct business, flexibility in their scheduling, and the freedom to create the work environment and culture that feels best for them.

Explore steps to start your own business, from the initial idea to preparing to launch.

1. Choose your business idea.

Whether you are aiming to launch a disruptive global start-up or a cosy local establishment, every business starts with an idea. Knowing what you plan to offer and who you strive to serve is the first step toward starting your business.

2. Conduct market research.

Market research is an information-gathering process that helps determine your business’s likelihood of succeeding. It incorporates data regarding economic trends, consumer behaviour, and identity to forecast whether your business idea has a place in the current market or if you should adjust your offerings.

Market research can provide insight into what similar businesses are doing, how they’re performing, and how you might be better able to serve your target clientele. Ultimately, market research can offer data that supports the need for your business and adds quantitative value to your idea—both of which will be important as you write your business plan and aim to secure funding.

You can conduct market research independently by investigating local competitors and surveying your target clientele, or you can hire a market research analyst to conduct a more thorough investigation.

3. Write a business plan.

Your business plan is a guiding document for how you’ll build, run, and grow your business.

As you write your plan, you’ll be able to envision what your business will become and workshop navigating potential roadblocks. It will help you imagine what success will look like for you.

This document benefits you and your potential partners, investors, or funders, so you can structure it however you see fit. Many business owners will create a traditional business plan, which is a highly detailed, multi-page document. Traditional business plans outline information such as:

• Executive summary

• Company overview

• Business goals

• Market research

• Internal organisation chart

• Services and product offerings

• Marketing and sales plan

• Funding requirements

• Financial projections

• Appendix

You can also opt to write a minimalist start-up business plan, which is usually a one-page document presenting a high-level overview of the information a traditional business plan would describe in detail. This formatting may be useful when you want to present your business idea quickly, though as you generate interest, potential partners or financial backers may ask for a more thorough presentation. 

4. Secure funding for your business.

In creating your business plan, you’ll get a strong sense of the amount of money, or overhead costs, you’ll realistically need to run your business. The next step would be to secure that necessary funding.

Consider a number of ways to consider funding your business. Some standard options include:

• Personal savings: Using your personal savings to fund your business, also called “bootstrapping”, is essentially investing in yourself. If you have a solid amount of savings, using your money to start your business could allow you to maintain total control. However, it’s worth noting that self-funding also comes with the risk of your investment not panning out according to plan.

• Business loans: Securing a business loan involves a bank or credit union giving you a set amount of money you will eventually have to pay back. Business loans allow you to retain control over your business. However, you need to pay back the loan on a set schedule and with interest.

• Investors: Investors provide seed capital to start your business in exchange for some kind of return, often in the form of equity or a role in your company. Unlike a loan, investors typically do not expect direct payback for their investment, and depending on the investor’s desired level of involvement, you may lose some control over your business.

• Grants: Business grants are sums of money given to businesses without expecting a return. Many grants list a series of qualifications, and if your company meets those qualifiers, you can apply for the grant. Not everyone who applies will get the grant, but if you do, it’s essentially free money for your business. Grants can come from the government, corporations, associations, or a number of other types of organisations. You can start your search for grants on the Find a grant tab on Gov.uk. 

• Crowdfunding: Crowdfunding is a set of small donations from family, friends, and other people willing to contribute to the growth of your business. It’s a less traditional funding model that allows you to set the terms for repayment, if any, whilst retaining total control over your business. Some popular crowdfunding sites for startups include Seedrs, Crowdcube, and Kickstarter.

5. Choose your business structure.

A business structure is the first step in creating your company’s legal structure. You determine how you’ll file taxes and your legal protections and liabilities by choosing your business structure.

The four key types of business structures are:

• Sole trader

• Partnerships

• Limited liability partnerships (LLP)

• Limited company (Ltd) 

Sole trader

A sole trader is a simple business structure in which one person is responsible for all daily operations. This structure does not create a separate business entity, meaning business assets and liabilities fall under your personal assets and liabilities.

Since this structure links business and personal assets, sole traders are best if you launch a low-risk business and will not seek outside funding.

Partnerships

A partnership is similar to a sole proprietorship but with two or more business owners sharing responsibilities. The business assets and liabilities operate under the partners’ personal assets and liabilities in a partnership. A partnership has no legal status; the only requirement is you register it with HMRC, and each partner must register for self-assessment. It is a simple agreement between two or more people who want to open a business together.

Limited liability partnerships

A limited liability partnership (LLP) is like a partnership, but the partners’ liability is only for the amount of money they put into the business. An LLP is similar to a private company, with the biggest difference being that an LLP is taxed as a partnership. Partners aren’t responsible for debts more than the amount of their investment, but you can’t claim profits after your business’s fiscal year. Register all LLPs at Companies House and HMRC.  

Limited companies (Ltds)

A limited company is a privately managed business with its own set of rights and requirements. Legally, the company is not connected to the people who run it. Owners, shareholders, and investors have no legal involvement. The company is fully responsible for all aspects, including finances. 

Because business and personal finances are separate entities, you won’t be accountable for any business debts or legal fees. Shareholders receive profits once the company pays its corporation taxes. If you are a controlling shareholder, you can negotiate the terms of your package. Seeking financial advice from a professional can help you decide the pros and cons of each type of business and which one works best for your vision and needs. 

6. Register your business.

Registering your business is the primary step in making it a real, legal entity. Registration requirements and processes will vary depending on the type of business structure you choose, where you work, and whether you have employees. Sole traders don’t need to register at Companies House; they can only register with HMRC for self-assessment. After you determine your structure, follow these other steps to complete registering your business: 

• A company name: Do some research to ensure no one else has taken the name, which is essential since this element conveys what your company is about and makes it stand out.

• Company information: Provide a valid UK address to reach the company’s directors, the company's directors (registered companies require at least one director), and the shareholder(s) information.

• A memorandum and articles of association: Formalise how you will run your company by filling out these forms signed by the company’s directors, shareholders, and secretary. 

Once you complete all the paperwork, submit it to Companies House. Creating your company usually takes around eight hours.  

 Registering your business will be vital as you seek to open up bank accounts, apply for business licences and permits, and legally begin operations.

7. Apply for licences.

You’ll need to find out if you need any licences to launch certain businesses. You will need a licence to perform certain activities, such as selling alcoholic beverages, handing out leaflets, or using the pavement for signage and displays. Local authorities issue these licences, but specific government bodies are responsible for issuing others, such as showing TV shows like sports or playing background music. 

Although not all companies need a licence, it is essential to check. A helpful resource is the licence finder tool on UK.Gov. Input the type of company you are starting and its location, and you will find out which licence you need and where to apply for it. 

8. Open a bank account.

Opening a bank account for your business that is separate from your personal account can help keep your finances organised. You must have a business bank account if your business structure is a limited company. Sole traders are not legally required to have a separate account. However, they can reap some benefits, including organising your finances to save time and effort when identifying company expenses. With some accounts, you may also have the option to open a line of credit for your business, and if you plan to hire employees, you can authorise them to access the accounts, should they deal with your business finances. 

Along with your business bank account, you may want to open a business credit card for larger purchases and regular business expenses.

9. Get business insurance.

The only mandatory insurance in the UK is employers’ liability, which helps compensate injured workers or those who become ill because of their work. However, keep in mind regulators may require additional types of insurance, depending on your business. For example, health care professionals must have professional indemnity insurance. 

Business insurance will protect you and your business in case of any accidental or unexpected incidents, such as theft, damages, and lawsuits. The type of protection you may require will depend mainly on the type of business you are running and how you expect to run it.

You’ll likely want to consult an insurance agent to help you assess risk, determine the appropriate type of insurance for your business, and find policies that will fit your budget and coverage needs. 

Some common types of insurance for small businesses include:

• Public liability insurance

• Professional indemnity insurance

• Business income coverage

• Commercial property insurance

• Data breach or cybersecurity insurance

10. Prepare for launch.

With your preliminary logistics settled, you are well on your way to starting your business. For additional insight into the process of launching your own business, check out the Entrepreneurship Specialisation from Wharton School of Business. Through five courses, you’ll learn more about developing your idea, launching your business, proven growth strategies, profitability, and more.

Getting started with Coursera

Becoming a business owner might feel daunting and full of challenges. However, if you have a vision for a company and a product or service that fulfills a consumer need, planning, researching, and working hard on developing your vision can bring your dream to fruition. The government's support and resources can help you create a successful business. 

As you approach your launch, you may find it helpful to organise your marketing efforts and start getting the word out about your business. Consider launching a website, advertising your services at local events, or turning to social media. You can learn and practise social media marketing skills with the Meta Social Media Marketing Professional Certificate programme.

You can also build your skills in other business areas. Check out the range of other business Professional Certificate programmes available on Coursera. For example, you can sharpen your bookkeeping skills with Intuit, practice project management with Google, or gain foundational sales operations knowledge with Salesforce.