There are plenty of services targeted at people with aspirations to set up their own business. It is tempting to just outsource the process because you are short of time or fear that you have no idea where to start. We worked out that if you take the plunge and do it yourself, you can save hundreds of pounds if you follow our tips.
There are a number of ways you can form your business – sole trader, limited company or a partnership. All three you can set up very easily yourself. Don’t let anyone tell you that you need to pay for this service.
Sole traders don’t need to do anything special other than ensure they’re registered for tax. If you paid tax before, you already have your UTR (unique tax reference) assigned to you by HMRC thus you don’t need to do anything more other than name your business and ensure you file your self assessment every year. The same applies to partnerships.
The process of setting up a limited company might seem a bit daunting which is why there are plenty of websites on Google offering to do the setup for you at a charge. However, the reality is that you’ll still have to do a lot of work yourself like supplying your company name, address, personal information and more.
Why not do it yourself directly on the government website? Started on https://www.gov.uk/limited-company-formation and it will take you about 30 mins to apply for a company formation. Less than two hours later you’ll have a UK limited company set up. The exercise is about £12 in total and you’ll save about £30 by not outsourcing this simple task. It’s also much faster than giving it to a third party.
If you’re a sole trader, you can probably start with setting up a personal account which is fast – especially if applying with your existing bank – and free as many banks these days don’t charge any fees for personal bank accounts. Don’t use your own personal account. Mixing your personal outgoings with business income and expenses will make it hard for you to keep up with your finances. Keep things tidy from the start.
As a limited company or a partnership you might like to have a business account from the start as well as some method to keep on top of your finances. The best approach is to combine the two and approach either an accountant who can do your books for a monthly fee, including setting you up with a business account for free. The business accounts usually come with a startup deal of the first 18 months being free. That’s a saving of £126. A business account usually costs about £8 a month these days. The accountant will usually throw in a good bookkeeping software such as FreeAgent which can be integrated with your bank account to save you the time of having to type in your incomings and outgoings every month.
That’s another saving of £174 you’ll pocket by choosing this route. Be careful however when being offered a business account. Some are not bonafide bank accounts which means that your deposits may not be FSCS (Financial Services Compensation Scheme) protected. Always asks questions.
If your business is straightforward, then it pays off to find an online accountant as opposed to one local to you working in old fashioned ways. Sure, you’ll have to do some work yourself such as uploading expenses to the bookkeeping system the accountant will provide but that’s only an hour or two a month saving you on average £25 a month, yearly saving you about £300 a year. There are plenty out there and the one recommendation we have is to look on Trustpilot before you sign up. Make sure the customer service is up to scratch. Pick up the phone, see how quickly you get an answer. The onboarding team is always quick but can you get through just as fast if you call in as an existing customer?
Every solopreneur needs some business liability insurance and when shopping around, it’s important to be on a watch out for extra charges like APR on monthly payments or unexpected fees for changing or cancelling your policy. You can save £20-40 a year by choosing the right business insurance provider. Some offer pay as you go business insurance that can be bought online without any extra charges. Make sure your cover can be changed or cancelled anytime and, if you can, get one with a holiday mode switch to help you save more money when work is scarce. There are always new business insurance players on the block willing to go the extra mile.
If you outsource this part, it will cost you anything from £600 and more. Social media isn’t difficult, just a little time consuming. Ensure you set up on all major platforms even if you don’t plan to use all of them. You don’t want your competition to steal your name. That could cost you later.
There are plenty of ‘how to videos’ to help you optimise each platform – Facebook, LinkedIn or whatever channel you decide to use for your business. You’ll just need to get some images ready, content and decide on how visitors can contact you.
Website building isn’t for everyone but before spending money on a web developer, consider two ideas. Do you need a website? A lot of businesses can thrive perfectly well on social media only which of course is free. Instagram in particular has grown into a lead generating platform.
If, however, you think a website is important for your business, explore tools like Wix which have made website building very easy. The subscription fees are very low, hosting is usually included with your package and if your plans are not complex, you should be able to publish something within a day or two.