How to Set Up a UK Business Today, in 7 Easy Steps

For most UK-based start-ups setting up a business is quick, cheap, and easy. In fact, it’s just about possible to set up a business in a day! If you know what line of business you want to start, you’ve been thinking about it for ages, you’ve read the books, done the courses… then maybe now is the time to ‘do’ it?

This article is about the practicalities of how to set up a business in the UK. Follow our first 7 simple steps and your new business could be up and running in no time. And to ensure your business thrives and grows, there are a few more steps. The main thing is to start.

Step 1. Register as self-employed with HMRC

You need to let the tax office know that you are starting a business. You can do this all online. This will take you through the process of registering for tax self-assessment and get you started as a self-employed sole trader. (If you’re starting a company, rather than just working for yourself,  see ‘part two’ below for other legal structures).

We’d also recommend completing HMRC’s free online training which will give you straightforward practical advice on the vital paperwork you need to understand when you set up a business. That includes record-keeping, filling in and filing your tax return, and what to do if you take someone on.

Step 2. Sort out insurance cover 

Insurance can protect you and your business against risks including accidents, sickness, theft, and legal fees.

Essential insurances include employers’ liability (if you have employees), property and vehicle insurances. The most common optional insurances include: public liability (if you deal with the public) and professional indemnity (if you give professional or expert advice). See our Insurance Guide for Startups for more details.

The cover you need will depend on the nature of the business and how you run it. Specialist brokers can be great for niche businesses and Trade Associations often arrange big discounts for their members. If you have dependants then it is particularly important that as a self-employed person you organise life insurance.

Step 3. Choose a business name

Search Google and Companies House to see if the business name you want is available. If you can’t decide, go with your own name for now – eg. Jane Smith Cakes – but don’t invest in printing and brand materials until you’re sure. Buy the website domain name as soon as you’re fixed.

Step 4. Set up a business bank account

You need a business bank account if you set up a limited company, as it is a separate legal entity to you. A business bank account is not strictly required if you are a self-employed sole trader (though it is usually recommended) – but you must keep very clear accounts.

Step 5. Setting up a business that is compliant

When you start a business in the UK you need to make sure that you satisfy all regulatory issues eg. health & safety, licensing, and data protection. has some great tools to take you through this. This only takes a few minutes and is straightforward for most start-ups.

Step 6. Start accounting for everything

Appoint an accountant or set up your own simple bookkeeping system. As a minimum keep records of all sales and costs.  An online accounting package could save you a lot of time and effort, while keeping your records up-to-date and in great order.

If you’re working for yourself you may not need an accountant. But if you’re starting a company with employees then an accountant is probably essential. An accountant can provide professional advice and assistance on how to start a company in the UK properly.

Step 7. Sort out your workspace

Your Local Authority or Council should be able to provide information about business premises and rates in your area. (Sometimes they offer funding and advice on how to start a business as well, so have a good look at their website).

Setting up a business from home

If you work at a desk on your own or have a light-touch business then setting up a business from home generally does not require any special permissions. Just plug in and get on with it. However, there are a few things that home-based businesses should be aware of:

  • what home business expenses you can claim, including a percentage of household bills
  • planning permission – if you expect regular business visitors or to employ someone who’ll be working from your home, ask your local authority planning department for advice
  • if you rent, check your lease to see that home-working is allowed.

If you work online or using a laptopir?t=prowe20 21&l=ur2&o=2 How to Set Up a UK Business Today, in 7 Easy Steps most of the time, you might want to check out co-working opportunities in your area, where you can rent a desk for a few hours or full-time. Co-working can be a great way of overcoming isolation and instilling routine and discipline when you’re starting out.

Maybe a little bit of a push, but you could certainly do most and maybe even all of that, in one day.

Part Two – UK How to Start a Business that will thrive

So getting a business formally set up isn’t all that difficult and needn’t take long at all. But, of course, you are much more likely to successfully set up a business if you start with firm foundations. Here is how to start a business that will survive and thrive.

Step 8. Get your business image in order

Develop a brand identity that reflects your values and the way you want to be perceived by your target customers. Get a logo designed and use a consistent colour scheme and fonts across all of your materials.

Set up a website and order business cards and stationery. Design platforms like Canva now make it quick, easy, and even free to design your own attractive materials and social media images.

Step 9. Decide on the best legal structure for your business

How do you register a business? For most people starting a business in the UK, this is a choice between being a sole trader and a limited company.

If you are going to be self-employed or setting up a side hustle then operating as a sole trader should be adequate. All you need to do is register as self-employed with HMRC (see step one above).

If you need investment or plan to grow fast then your should probably set up a limited company. You can set up a limited company on line via the Companies House website.

If your business has primarily social or charitable aims there are alternative legal structures such as a social enterprise.

Step 10. Write a business plan

A business plan is vital if you need to raise finance. It’s important regardless and should be a living document, regularly reviewed and updated. Here is a good Business Plan template to download and a great guide to putting your business plan together.

But if the thought of putting together a business plan makes your skin creep, then check out The Right-Brain Business Plan: A Creative, Visual Map for Successir?t=prowe20 21&l=as2&o=2&a=1577319443 How to Set Up a UK Business Today, in 7 Easy Steps.

The most important part of putting together a business plan is the marketing and sales strategy. After all, if you don’t attract customers you do not have a business.

Step 11. Manage your cash flow

Start a cash flow forecast and update it with actual achievements very regularly. This will enable you to plan ahead and anticipate potential problems or opportunities.

A simple spreadsheet is usually adequate. Here is a great free cashflow tutorial and download. Even if you need a bookkeeper or an accountant to do this, do make sure that you personally understand it and review it very regularly. Never let anyone else take total responsibility for your finances. Always keep on top of your numbers.

If you need support, there are wealth managers that give financial advice for entrepreneurs. They could be a valuable resource.

Step 12. Keep costs as low as possible

Until your business model is established and you are making good sales, keep your spending as tight as you possibly can. There’s a lot you can do with very little money. If you need funding to get started, there are lots of options these days from loans, to investment to crowdfunding – see our guide.

The government-backed Start-up loans company is also worth checking out. Those loans are unsecured, with very reasonable interest rates and you will be supported by an adviser and mentor.

Step 13. Get your business kit in order

Beg, borrow, and shop around for IT equipment, office furniture, and transport. Test your business concept as much as you can before you invest significant funds in equipment or premises. If you are public-facing consider starting with a pop-up shop or sessional room hire.

Step 14. Organise communications

When you set up a business you need to make sure customers can find you by phone, email, and on relevant social networks. Start with the social networks where your customers hang out. If you don’t know, then ask them!

Your brand identity should be consistent across all the social networks, with the same icon and strapline – you want to be instantly recognisable.

Step 15. Get your business support in order

Assess your own skills and identify how you’ll fill the gaps. Don’t employ others until you really must. Lots of small businesses start by sub-contracting or collaborating with other freelancers or small businesses. That’s easier than ever using freelancer platforms like fiverr, where you buy slices of help with marketing, design, administration, and much more.

Most importantly, make sure you have someone you can talk to regularly about your new business venture. Starting a business can be one of the most rewarding things you will ever do, but it is rarely easy or straightforward. There will be high days and also days when things go wrong and your motivation slumps. So find a good business mentor, a business adviser, or others in the same position as you, who you can talk to about the challenges and share the successes that lay ahead.

Starting a business checklist

Download our set-up-your-business checklist to work through these steps and start moving forward with your business today.