When starting a UK business, there are five key things that you must do.
And, if you are like most people starting a new business, these are things that you will be relatively unfamiliar with: 1) Appoint an accountant.
This may seem an odd priority to you when there are so many other things screaming to be done.
However this takes first priority because many of the tasks listed below will be undertaken by you for the first time.
At this time, a good London accountant will be priceless.
They will advise and guide you through the minefield of starting a UK business painlessly.
So, not only will the stress be reduced but you will also get yourself a pair of helping hands.
2) Chose a business structure.
In the UK there are a number of different ways that you can structure your business.
The normal ones are: a sole proprietor, a partnership, a limited company or a limited liability partnership.
You should consider the pros and cons of each of these business structures when you are at the very earliest stage of starting your business because, while some things can be changed later, others cannot.
And, the wrong structure can result in the difference between business success and failure.
So, explore the options with your accountant before you make your decision 3) Register for Tax.
You need to make sure that your business is compliant with the extensive UK tax requirements and regulations.
When starting a UK business, you have to register with different authorities for income tax, VAT, payroll taxes if applicable and other possible requirements.
Non-compliance will create problems for you and almost certainly result in penalties being imposed on you.
Not only will your accountant provide advice but he may actually be able to handle these registrations on your behalf.
4) Setup Business Banking Accounts.
The cardinal mistake that most newcomers make when starting a UK business is to mingle their business transactions and their personal accounts.
Even if you are a sole trader working out of your house, it makes sense to keep your business transactions separate for a number of reasons.
Find a bank manager and a bank who you believe will understand you and open several accounts for the new business.
Use one current and one savings account for your regular transactions and have a separate savings account in which to deposit tax that you will collect till the payment becomes due.
Then you will not have to run around to find the money when it becomes payable and you will also earn some interest in the meantime.
5) Choose your work location carefully.
Almost certainly, you will not need a fancy office to start with and working out of home is by far the cheapest option.
Other options would include setting up a separate office or serviced offices if you can't use your home.
Maybe, you have lots of noisy kids who will interfere with work at home, or maybe you need to be in a particular geographical location so that you are close to your clients.
The choice is yours and will depend on the requirements of your particular business.
However, the golden rule when starting a UK business is to keep your costs low.
So, wait a while for the fancy new office and enjoy getting it out of the profits that your business has made, not paying for it out of the profits that you hope it will make.
David Grant - London Accountants