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6 Things You Must Always Do When Starting a New Business

Julia RichardsDecember 2020
6 Things You Must Always Do When Starting a New Business

Starting a new business is an exciting undertaking. Nothing beats the thrill of bringing a new business idea to life.

There are several crucial steps which must always be taken when starting any new business.

A company can forget to market, can even forget to do any selling (sometimes, products sell themselves) but the following six things must absolutely always be done when forming up a new company in order to avoid penalties and costly mistakes.

 

1. Choose a company name

Choosing a company name is not as easy as it sounds. Considering that there are over 4,500,000 companies registered in Companies House, the chances of adopting a name which is already in use are extremely high.

Your company name needs to be both unique and memorable. You also need to ensure that the name doesn’t mean something embarrassing or inappropriate in another language (or even in the English language). There are countless examples of this kind of error in business names as well as in product names, such as the awful mistake made by Reebok when it named one of its women’s running shoe products Incubus.

To avoid these kinds of mistakes when naming your company it is a good idea to use a professional company naming service that checks for these kinds of “booboos”.

 

2. Choose your company structure

You need to decide if you’re going to establish a private limited company, a company limited by guarantee, a limited liability partnership, or some other type of company structure.

If you expect that your business could open you up to liability of any kind, a limited company might be the option for you.

This needs to be established before you go ahead and form your company in the UK.

 

3. Create a business bank account

Even if you are a sole proprietor, you should have your business and personal accounts separated.

As for other types of company structure, it is a legal requirement to separate business and personal.

As a result of the recent boom in the FinTech sector, opening a business account these days can be as simple as signing up online and then verifying your identity, all from the comfort of your own couch.

Whether online or brick and mortar, the business bank account you choose needs to provide all the things you will need in order to run your business successfully.

 

4. Register web domains and trademarks

working on computer

It is an unwritten rule that a company’s domain name should follow the pattern:

YouCompanyName.com

The “.com” part is called a “Top-Level Domain” or TLD.

There are numerous top-level domains in the world. Some are “generic” top-level domains such as .com, .net, .org (and, more recently, .london, .international and hundreds of others!).

Other domains are called “country-specific domains”. Country-specific TLDs include “.co.uk”, “.pt”, “.ie”, etc.

Even though many businesses also register a domain using a country-level TLD, it doesn’t change the raw popularity of .com domains. People expect business names to end in .com, for better or worse.

When you are choosing a company name, also check whether the .com domain for that business name is available.

Registering a trademark is a different beast altogether and is a lot more formal. It is essential to ask for professional assistance when registering a trade mark to ensure the highest chances of its registration is accepted, and to protect your intellectual property.

 

5. Get business insurance

It might hurt to pay a premium every month for business insurance but it will certainly hurt more if you are found liable for damages which you have no insurance in place to cover.

There are numerous types of insurance to get for a business and it’s important to evaluate which insurances are legally obligatory, and which are merely “a good idea” to have.

We offer a free business insurance selection service which makes selecting an insurance policy from the myriad choices easy.

 

6. Register for Taxes

Depending on which country you register your company in, you might need to register your business officially before the tax authorities, in addition to simply registering the business itself.

In the UK, it can be necessary to register for VAT. If your business has earned over approximately £80,000 in one year, then registering is obligatory. Otherwise, registering for VAT in the UK is optional.

Registering for VAT incurs more paperwork for you, as well as the possibility of penalties if you fail to file a return on time. But if you have a lot of expenses with VAT on them, it might be well worth it to register so that you can claim that VAT back.

Sole traders need to file a Self-Assessment Tax Return every year. Limited companies need to file a Company Tax Return. If you have employees, you will need to run payroll each month, make the necessary deductions from salaries and pay these deductions to HMRC.

Much of this can be automated using online tools. But having a business accountant to help you makes it much easier.

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Julia Richards

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