Step 1
You have your idea,
time to make it real
Get the support you need
If starting a business was a Monopoly board, you can’t pass ‘GO’ and start collecting those pay days until you’ve landed on these squares.
9 or fewer employees
5,600,000 in UK
Are you micro?
10-49 employees
211,000 in UK
Or small?
Seek government funding, grants, and support
Open a business
bank account
Register your
business name
Decide, are you a sole trader or a limited company?
Don’t go it alone when it comes to your finances.
With the UK government pledging to help SMEs through the stages of start-up and growth, there is a range of funding for small businesses to take advantage of, and many networking opportunities, too. Bookmark this page for a comprehensive list.
If you are a sole trader.
You could use your personal account, but having a separate business bank account will help distinguish between personal and business income/expenditure. Shop around for the best deals. There are plenty of online-only providers which have super competitive deals and no fees.
Congratulations! It’s a … Ltd Company!
Know what kind of company you are gestating? Now you need a name. Get creative, but don’t forget that the best names clearly communicate a USP to the market. Once you’re decided, you can register as a limited company, sole trader or partnership on gov.uk.
It depends on personal preference and your scaling ambitions.
A sole trader and their business are the same – any business actions and debts are the responsibility of the owner.
A limited company and its owner, however, are two different entities. You have unlimited liability for your business.
Decide, are you a sole trader or a limited company?
Register your
business name
Open a business
bank account
Seek government funding, grants, and support
Let us save you looking through millions of search results.
All you need are these 6 steps…
I’m done searching. Let's go.
Not to be dramatic, but this is the blueprint for everything. EVERYTHING. It will make you think, and hard, about exactly what your business is, where you want it to go and crucially how you’re going to get there.
Imagine you’re in Dragons' Den, or that famous elevator people always talk about—what is your USP, who are your competitors and how you will go to market? Then think about the numbers; what are your overheads, your projected sales, cash flow, profit, and loss?
A business plan will reduce speedbumps—and be something you’d be proud to show Deborah Meaden.
Now it’s time to write your business plan
Step 2
Products
and pricing
Your audience
and the market
Goals
An overview of
the business
Pricing is often where startups come unstuck.
Too high, too low? Do your research, are there comparable products or services on the market? Can you afford to undercut them, or are you offering something more expensive for a better service? Think, what are your overheads and running costs, and work back from there.
Products
and pricing
It’s all theoretical until…
You start to add in your customers. Who will your business supply and how will it reach them? How big is the market and who are your key competitors? It might be niche, or mass market, and you will amass customer data as you grow, but you need an idea of who you’re targeting.
Your audience
and the market
What do you want to achieve?
Set some SMART objectives (Specific, Measurable, Attainable, Relevant, Time-bound). Don’t forget, your business plan isn’t a static document. You will update it regularly as your company evolves, and ensure you are progressing, pivoting and learning from the results.
Waffle isn’t a good look in the business world.
Think hard about what your company does, and what makes it different (its USP).
The best businesses solve a problem or have a key market differentiator. Now make this fit into a paragraph. This is your core, what you always return to for an identity check.
An overview of
the business
Products
and pricing
Your audience
and the market
An overview of
the business
Goals
Goals
30%
the increase in incorporated businesses registered with Companies House in 2020, compared to 2019
Did you know
Excluding London,
the South East was home
to the highest number of SMEs in the UK in 2020
Did you know
The types of start-up most searched for by would-be-entrepreneurs are 'online' and 'home business' ideas
90%
Did you know
of SMEs fail due to cash flow issues
1 in 5
Did you know
Britons started a business
in 2020, or plan to start
one in 2021
47%
increase of new UK small businesses started in 2020
65%
Did you know
of SMEs don’t have
a business plan
You’ll use your business plan to work towards a series of milestones that will help you to grow your company. A good template will include:
Get organised
Your business plan isn’t
a static document. Update it regularly as your company evolves, and ensure you are progressing, pivoting
and learning.
Write your business plan with no help whatsoever
The complete guide to starting a business
Small business ideas for anyone
Fill in your financial projections from scratch with this arcane document that might as
well be written in Latin
Use this question to guide what kind of business you want to start. If you want extra money, maybe you should start a ...
Know you want to be your own boss but need some small business idea inspiration? ... Once you build a following, consider starting a website, accepting ... projects, quality web development is in high demand right now.
Let us stoke your fear of HMRC with this dizzying set of instructions for filing your tax return as a freelancer or micro business
100 unrealistic shortcuts to make a million—fast!
10 ways to make tax more scary!
Download this vague jargon-heavy guide to obscuring the real things a business owner
needs to do in order to make his or her idea profitable. It’s all yours for the price of an
hour you don’t have!
Showing 4,780,000,000 results
I want to start a business—now what?
It’s time to write the financial part of your business plan. It will tell you, in black and white, or multicolour if you’re a hip Airbnb style start-up, if your business is viable.
No raw data? Look for information in the public domain such as competitors’ accounts to give you examples of sales/costs/ratios that are relevant to your market-and use these as a benchmark.
Improve performance
Repeat after me. You do not have to be a maths genius. Seriously. If there’s one way you should approach writing your business plan, it’s to accept that it will be an exercise in exposing what you don’t know—and that’s OK. In fact, it’s crucial.
Of course, you might be blessed with a numbers brain, but not everyone is a finance expert. However, you can’t learn—said no entrepreneur ever.
Know your numbers
Step 3
10
09
08
07
06
05
04
03
02
01
Top 10 ways small businesses increased revenue growth, 2020
26%
enhanced or improved existing products or services
01
04
24%
hired new staff
10%
obtained new funding
10
10%
reduced the cost of debt
09
12%
launched new website
08
12%
opened new premises (office or retail space)
07
12%
found new suppliers
06
13%
bought new/ improved equipment
05
24%
launched a new product or service
03
26%
entered a new market
02
26%
enhanced or improved existing products or services
01
- Work out what costs you will have, from materials to staff to mobile phone bills
- Do some research into what prices you may need to pay as the business matures and your customer base grows
- Remember! Buying in bulk can lower costs, but you need the cash to be able to do this and it ties up your money in stock
- List your products or services and their price point
- How many sales will you achieve each month? In % or units
- Allow time to get sales established, or quiet periods
- Consider seasonal effects on each type of sale or service
- New product? Look at sales figures for similar products
Available funds
and finance
Cash flow, and profit
and loss (P&L)
Costs
Sales forecast
If you are looking for investment.
it’s important that you know what your numbers are – not only what injection you’re looking for but also how the money will be used and when investors can see a return. You should know your figures inside out as this will show an understanding of your business.
Available funds
and finance
Cash flow, and profit
and loss (P&L)
Costs
Sales forecast
Available funds
and finance
Cash flow, and profit
and loss (P&L)
Costs
Sales forecast
- You may not get paid for a sale when you make it. Factor in time for people to pay invoices
- Your Profit and Loss shows all income and expenditure and should cover at least two years. It will show any income other than sales, together with costs such as marketing, fees, salaries, travel, rent, insurance, etc.
The profit and loss statement (P&L)
is a snapshot of your business and shows worst, expected, and best-case scenarios
of SMEs struggling with overdue invoices are forced to employ someone to chase up payments
11%
of SME's collectively spend roughly £4.4bn in admin costs alone chasing late payments
43%
of SME business owners experiencing late payments say they have to rely on overdrafts to help them meet their monthly obligations
34%
of UK SMEs that are owed money claim that large businesses
are the worst late-paying offenders
40%
of UK SMEs that are owed money are being forced to wait at least one month beyond their agreement terms before being paid
78%
This is when, theoretically, you start to win, and see some progress. You have started to monetise your business idea and found some customers. Now you need to keep cash flow going with regular, automated invoicing.
Here’s what you need to know.
Get paid
Honestly, you just want to get paid. The entrepreneurial maxim is passion, sweat, tears—but what about the reason you started the business in the first place, to make money?
Efficient invoicing is important for healthy cash flow. SMEs in the UK are paid on average 21 days late (and the rest, we hear you cry), so make sure you have a plan in place to circumvent this.
Ahh… we’ve come to the ‘Show me the money’ part
Step 4
14.2%
of the work week that companies spend invoicing
What is it:
An HMRC service that requires businesses to keep digital records and file VAT returns using compatible software.
Who?
All VAT—registered companies—regardless of size—will need to use the digital system.
Need to know:
Making Tax Digital for VAT from 2022.
Tax fear is curable, we promise. And the doctor is an accountant.
We all grasp the basic idea of personal tax but owning a business means there are several other taxes to consider. What type of business taxes you will need to pay, and when, depend on the structure of your business. You are obliged to know and understand your tax obligations—ignorance is no excuse. But don’t worry, an accountant can help with that.
Keep on top
of your taxes
Step 5
Keep bossing it throughout 2021, Click here to learn more about
Sage Business Cloud Accounting
Think of us as your own personal search engine for your small business questions. Bossing it in your business, our excellent guide, is your next step.
You’re in the zone. It’s not easy, but you’re taking control of your business plan, your finances, and your tax. Be proud!
Data sources:
The Centre for Entrepreneurs (CFE), ACCA UK & The Corporate Finance Network (CFN), Barclays Bank, SMEloans.co.uk, Bacs Payment Schemes, Google Keyword Planner, Companies House, Office for National Statistics (ONS), Department for Business, Energy & Industrial Strategy (BEIS), Gov.uk
You’re bossing it
Step 6
Download our guide to bossing your business
Get paid—fast
Set the rules
Automation
Invoicing
Also look at ways you can get paid quicker...
where you are in control, so use technology such as Stripe for credit card payments, or GoCardless for direct debit. These are all big and efficient simple tools you can use that are very cheap to use and will definitely increase your cash flow.
Get paid—fast
Set the rules
Automation
Invoicing
Get paid—fast
Set the rules
Automation
Invoicing
Offer flexible payment options to get paid more quickly...
have fewer forgotten invoices, and spend less time following up on missed payments from customers. For example, ‘pay now’ buttons on invoices or phone payments reduce the average time it takes to pay an invoice from 35 to 20 days.
Set up a system that automatically alerts you...
when invoices are received and paid; you’ll know exactly which clients you need to chase and avoid wasting time combing through bank statements. Data on how and when customers pay you is automatically transferred and trackable within good accounting software.
Getting paid faster...
is really important for your cash flow, so set your terms up at the outset and stick to them.
If your terms are 30 days, stick to 30 days, or if your terms suit your business at seven days stick to seven days, don’t give extended credit. Consistency is key and will save you headaches.
1572
Did you know
saw the birth of the business rates tax.
Even Shakespeare had
to pay tax
Besides talking to one of the new breed of entrepreneurial accountants who do everything short of a West End musical based on your business, here’s what you need to familiarise yourself with, when it comes to tax.
Get taxes right
Find an entrepreneurial accountant
Talk to
the experts
Know your
tax dates
Leverage
technology
It might be tempting in the early days…
to go it alone with your business finances to save on accountant fees, but it’s a false economy. Modern accountants will not only advise you on taxes, they can also help you create business plans and cash flow forecasts that might be vital for loans or grants.
Find an entrepreneurial accountant
If your business is one in which you incur expenses...
(that is, you buy materials or consumables), then an accountant is likely to pay for itself. They will know what you can claim to offset your total tax bill, and it will save you much time and effort – not to mention stress – in submitting your tax return.
Talk to
the experts
Start a diary as soon as possible...
with your key tax dates highlighted. You can find resources to help you at https://www.sage.com/en-gb/blog/ After starting your business, you need to register for Self Assessment as soon as possible, but definitely by 5 October in your business’ second tax year.
Know your
tax dates
Making Tax Digital for VAT is an HMRC service...
that requires businesses to keep digital records and file VAT returns using compatible software. So, get your head in the cloud. Businesses that digitalise their accounting means they have more timely and accurate information, enabling better business decisions to be made, thus saving time and money, anyway.
Leverage
technology
Find an entrepreneurial accountant
Talk to
the experts
Know your
tax dates
Leverage
technology
Share this advice!
Start with the kitchen table. Get your Marie Kondo on, and clear it off. This is now the launch pad of your small business idea. Your mission control, if you will.
While you're at it, spring clean those negative thoughts, too. Is my idea good enough? What if I fail? Every entrepreneur empathises with these common insecurities, we're only human. But, if you want to spark joy like Marie says, having the self belief to register your side hustle or small business IRL could be the key to your financial and creative freedom.
Seek government funding, grants, and support
Open a business
bank account
Register your
business name
Decide, are you a sole trader or a limited company?
Stop motion
Start motion
Stop motion
Let's go
Download guide