Starting a business is not an easy task but thankfully there are many resources with helpful advice. With so many factors to consider, business storage must be at the top of the list as you will need a safe place to keep your stock, equipment or documents.
Many new business owners will testify to the fact that you can’t just say, ‘Here I am, a new business’. There are many aspects involved in starting a business including legal documents, VAT registration, business name and whether you’re a sole trader, partnership or a limited company. Without further delay, let’s get cracking with some handy tips on starting a new business.
Tips On Starting A Business
Between 2001 and 2017, an additional 1.5 million people became self-employed in the UK which equates to around one in six people work for themselves. If you are in the process of starting a new business, it can be quite challenging as you need to think about business structure, budgeting and paying your own tax.
It all starts with a solid business plan containing everything from business structure, business name, marketing ideas, loans and budgeting to office space and even business storage. If you have a process in place and follow the advice from the experts, you shouldn’t have any issue getting started. Whether you work from home or a specified premises, these tips will give your business the best chance of success.
Market Research
A sound business plan starts with comprehensive market research to find out more about your target audience. There’s no point in targeting people who don’t need or want your product or service. In previous years there was no internet and the job was a lot harder. Today, modern technology and social media can somewhat simplify the process.
That said, going out to physically see potential customers in a field test is vital. Even though technology is there to help, making personal connections with people still trumps other methods when it comes to building a successful brand. There are several market research methods you could employ where each one has its own set of benefits and applications. Check out this article on business plan essentials for a detailed breakdown.
Choosing A Business Name
Naming your business is a vital part of the process and should reflect what you do. However, the name you want might not be available so remember to check first either on Companies House listings or Who Is Lookup. This will tell you if anyone else has already registered their business with your proposed name. You can also check domain name companies when creating your website as someone may already own the domain name you want.
Choose Your Business Structure
The business structure you choose is essential as it can determine how your company will grow. There several options and choosing the right business structure is one of the most important decisions you’ll make.
It will depend on your set up and whether it’s only you, other partners or directors and also whether you need staff. The major options include Sole Trader, Partnership, Limited Company or Limited Liability Partnership (LLP) but there are others such as Community Interest Companies and co-operatives, offshore companies and franchises.
Sole Trader
Choosing to be a sole trader is an attractive option for many business owners especially those who don’t have loads of upfront capital. While there are many other examples of sole traders, the most common include hairdressers, professional photographers, electricians, plumbers or construction companies. Sole traders are allowed to employ staff members but they must adhere to these regulations.
Being a sole trader is inexpensive, every penny you make belongs to you (at least after tax) and any decision a sole trader makes is instant. There is also minimal red tape, no dues or fees to register.
The major disadvantages of a sole trader is that any business debt can be claimed against the owner’s personal wealth if the business fails. The HMRC also taxes all profits as income but the problems start when the business starts to grow. Profits are taxed as income and you’ll pay 40% as soon as it reaches £41,865 and 45% above £150,000.
Partnership
As the name suggests, a partnership is when you offer products or services with people you now well. It is a common extension of the sole trader model where two individuals or a husband and wife work together as partners to build the business. Partnerships are just as flexible and have the benefit of two or more individuals’ ideas and input which also helps keep the business going if one is sick or on holiday.
There has to be a partnership agreement indicating liabilities, ownership, profits and what happens when one partner leaves. The only legal requirement though is that each partner is registered as self-employed and submits a separate tax return. Check out this helpful article on ‘How To Register As A Partnership’.
Limited Liability Company (Ltd)
Registering a limited company (LLP) at Companies House will lend credibility to a business and makes it easier to apply for finance. One of the greatest advantages of a limited company is that you control your exposure to financial risk as there is a firewall between your own money and the company’s funds.
The main reason is that a limited company is a separate legal entity to the directors which means the business is essentially responsible for all financial liability if the business fails. This means that your home, family and lifestyle are protected and cannot be claimed against.
Tax is more favourable to a registered company than a sole trader as they pay corporation tax on their profits. Company directors are then taxed as employees just like other people who work for the company.
Related article: ‘Setting Up A Limited Company’
Limited Liability Partnership (LLP)
LLPs are Britain’s newest business structure ideal for professional services companies. Many consider these a hybrid between limited liability companies and traditional partnerships as they offer limited liability to company shareholders combined with the tax regime and flexibility of partnerships. There is no limit on the number of partners but at least two must be ‘designated members’ responsible for filing annual accounts.
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As with ordinary partnerships, the members’ share of profit is taxed as income and each member must register with HMRC as being self-employed. LLPs need to register at Companies House and should have a members’ agreement in place stating what share of the profit each member should receive. Some of the largest accounting and law practices in the UK have adopted LLPs with great enthusiasm.
VAT Registration
Regardless of your business structure, you also need to consider whether to register for VAT from the outset. Businesses must register for VAT with HM Revenue and Customs (HMRC) if the VAT taxable turnover exceeds £85,000. You can register voluntarily even if your turnover is less than £85,000 unless the products or services you sell are exempt.
When you register, you will receive a VAT registration certificate confirming your VAT number, when to submit your first VAT Return and payment and your ‘effective date of registration’. This will depend on the date you went over the threshold or the date you registered if it was voluntary.
Helpful Article: ‘How To Register For VAT’
Find A Reputable Accountant
Not all business owners know enough about accounting, tax law and bookkeeping best practice so it’s often best to hire a reputable and experienced accountant. It’s vital to take into consideration whether they are familiar with your business’ sector as it’s unwise to work with someone in a completely different industry.
Always look at the size of the firm as a small to medium business accountant will be more familiar with issues surrounding smaller firms. These accountants will also likely charge less than larger firms while providing you with more direct access to experienced partners.
A top tip is to start with an initial accountancy consultation where you discuss the services you would likely require. This can be just final accounts and self-assessment tax work or VAT and payroll as well. Their rates will obviously vary depending on what you need them to do.
What About Business Storage?
Depending on your business model, business storage can be hugely beneficial whether you need it for stock, equipment, machines or documents. Many companies use business storage for excess stock or to keep physical accounting and financial documentation especially for confidential client financial statement. Although some data can be digitised, many need long-term storage to satisfy HMRC requirements.
eCommerce and home-based companies should not rely on their garage, spare room or shed for business storage purposes. Stock can easily get damaged or misplaced which directly affects the bottom line. More businesses are renting self storage units as property prices have increased and, of course, the continued uncertainty around Brexit. Business storage is a vital part of being successful and organised while keeping initial overheads low when starting your new venture.
Related Article: ‘Do’s and Don’ts Of Commercial Storage’
Conclusion
Often, a home-based office and a good self storage facility are more cost effective than renting warehouse space. With short leases and the ability to change the unit size as your requirements dictate, business storage offers you the flexibility you need especially during the early stages.
If you need more information about storage for business, we have ideal facilities in Bristol, Stroud, Gloucester or Stonehouse. You can also call any of our branches to arrange a site visit. Prices are guaranteed to remain the same for at least 12 months if not longer once you move in.