Setting Up Guide

If you’re thinking of starting a business, you first need to come up with a realistic idea you can turn into a product or service.

Protect your intellectual property

You might already have an idea for a business or have invented something you think people will want to buy. Find out how to protect your intellectual property to make sure nobody copies it without your permission.

Turn your idea into a business – Starting Up Checklist

  • Identify potential customers. Talk to them and find out if your idea is meeting a real need.
  • If there are other businesses competing for your market, think about what will make you different. Can you provide something better than what’s already available?
  • Develop and change your idea based on what you’ve found out about your customers’ needs before investing.
  • If you can, make a basic version of your product or service (a ‘prototype’).
  • Test your product or service with real customers, make changes, and test it again. Keep doing this until you’re confident that they’ll be willing to pay what you’re asking, and that you’re meeting their needs.
  • Deal with any problems you’ve found with your product or service, including the way you’re planning to make and sell it.
  • If there’s no real demand for your idea, think about changing it completely. Is there another product, service or market that uses your skills and resources in a different way?
  • A business plan is a written document that describes your business. It covers objectives, strategies, sales, marketing and financial forecasts. A business plan helps you to:
    • clarify your business idea
    • spot potential problems
    • set out your goals
    • measure your progress
  • It should clearly show the results of your customer research including the customer need you’re aiming to meet and how your business will meet that need while making a profit. It’s important to be able to explain how you can turn your idea into a viable business before you invest lots of time and money.
  • You’ll need a business plan if you want to secure investment or a loan from a bank.
  • It can also help you to demonstrate the value of your business and convince customers, suppliers and potential employees to support you.
  • Download a free business plan template on The Prince’s Trust website.
  • You can also download a free cash flow forecast template or a business plan template on the Start Up Loans website to help you manage your finances.
  • Once you’re confident your target market is willing to pay for your product or service and have written a business plan you will need to explore different sources of business finance, from bank loans to government-backed schemes to help with the costs of starting up your business.
    • Think about who you’re going to work with to develop and sell your idea.
    • Whether you set up as a sole trader, partnership or limited company, your business is likely to involve working with more people to develop and sell your idea – including partners, suppliers and distributors.
    • Partners
      • Finding a co-founder with relevant skills and knowledge that are different to yours lets you focus on what you’re best at.
      • For example, you might be selling a product you invented, or a service that uses a particular skill or talent you have, but not have any hands-on experience of running a business. If so, you might want to work with someone who has business and management skills and can look after things like financial planning and recruitment.
    • Suppliers
      • Search online and talk to other businesses. Draw up a list of potential suppliers. Get estimates, then go and talk to them so you can:
        • negotiate prices
        • start to develop relationships
        • get a sense of which suppliers are reliable and trustworthy
      • You’ll need to agree on payment terms with your suppliers and get them in writing. This includes your ‘trade credit’ period (how many days you agree to pay invoices within), and whether they can offer you discounts for things like buying in bulk or quick payments.
      • You’ll also need to find suppliers for the equipment you’ll need to run your business, including your information technology (IT) systems.
    • You’ll need to decide which legal structure is right for your business before you register for tax and start trading.
    • It’s important to understand the different risks and benefits before you choose – whether you set up as a sole trader, limited company or partnership affects:
      • the amount of financial risk you’re taking on
      • the way you’ll need to pay tax, and report to HM Revenue and Customs (HMRC), and Companies House for limited companies and some types of partnership
      • how much control you have over how your business is run
  • If you’ll need extra help or people with specific skills to run your business, you might decide to take on employees.
  • Find out about your legal responsibilities as an employer, including things like pay, tax and insurance, before you start employing staff.
  • You’ll need to register as an employer with HMRC if you want to employ people, even if you’re a sole trader.
  • Make sure you get an estimate from any advisers you work with and agree in advance what they will do.
  • Some advisers will charge an hourly fee, and others may offer a fixed price for a piece of work. It’s always worth getting several quotes before you decide who to use, so you can compare prices and make sure you’ll be able to work well together.
  • Accountants
    • An accountant can help with things like financial advice and managing growth. You can also appoint them as an ‘agent’ to deal with your tax affairs, submit your VAT returns and deal with HM Revenue and Customs (HMRC) on your behalf.
    • Chartered accountants are fully-qualified members of a professional body. There are several UK professional accountancy bodies and you can find chartered accountants through them.
  • Legal advisers
    • You should also consider getting legal advice when setting up your business. This is particularly important if you want to sell shares.
    • Find a solicitor on the Law Society website.

You might be able to get support and financial help from Jobcentre Plus if you’re unemployed.

For additional guides and tips on starting up, visit Enterprise Nation’s website.

Contact our business support helpline on 0300 111 8002 or email us at: for help and advice on starting your business.