Do a quick Google search of dropshipping and it appears to be the ultimate get-rich-quick business, where you can start to make passive income while wrapped up in your sheets snoring.

What is dropshipping?

But what exactly is dropshipping? How do you start a dropshipping business and is it all it is cracked up to be? (And as easy as it’s made out to be?).

Dropshipping essentially involves marketing and selling a product on your own website without having to organise the fulfilment and delivery to the customer.

Say you have a product for sale on your website for £30 and a customer buys it. Once they have paid, you go to the wholesaler and purchase the product from the supplier making, say, a £10 profit.

With few set-up costs, it’s a seductive business model for many entrepreneurs. You don’t need a large warehouse to store the products and you don’t have to deal with delivery.

You are, however, still responsible for the sale and any lack of quality or customer service will see customers banging angrily on your e-commerce door.

Dropshipping is still a business, after all: it will require thinking about the long-term, business strategies and takes work to be successful at it.

Steps to start a dropshipping business

#1 Set up your business

This means making sure you’re legal and ready to start trading. If you don’t register, you can’t get wholesale prices from suppliers who will vet you first before trading. This will also mean you will start paying tax on your income.

>See also: Becoming self-employed

Once you’ve become officially legitimate, you can receive goods from wholesalers. They will typically require you to buy in bulk and are notoriously difficult to find online, so consider sifting through a supplier directory to find the perfect fit for your niche.

You’ll also want to set up your website or dropshipping platform. Platforms such as Shopify can allow an e-commerce website to be made in minutes and at relatively low cost.

Shopify is a good example because you can design your site and sell through it straight away.

#2 Choose a product

Not every product is ripe for dropshipping. You’ll ideally sell a product which is popular (you can see what’s in demand by using keyword websites like Keyword Planner and Google Trends), preferably a repeat-purchase product, has an attractive profit margin to be made and is difficult for your potential customers to source locally (you want them to be searching online). You’ll also want to find a niche.

Trending products are perfect for dropshipping, especially those trending on social media platforms such as TikTok, as these will be achieving a high amount of exposure and get a lot of people clicking links to it online.

You don’t want to choose a product that is too big or too fragile as you have no oversight of how it is handled and any breakages upon delivery will come back to bite you with customer complaints. It also eats away at profits with the higher shipping costs.

You’ll also want to consider products that are easy to upscale from, for example a product with associated accessories.

In any case, make sure you get your hands on the product or samples of it first before you start marketing it. You need to believe in the product yourself before you expect your customers to.

#3 Pick your supplier

If a customer isn’t happy with the quality of a product, they will come directly to you. Ensure the supplier you choose has good reviews for both shipping times and quality of product.

Global suppliers can be found on websites like AliExpress, Alibaba, AW Dropship and SaleHoo. Looking through directories of suppliers will give you a better idea of which is best suited to your offering, but another option is to contact the manufacturer of products that you like directly.

Ask the supplier if they offer dropshipping, can add your logo to the product, what their shipping times are, and what their refund policy is before trading with them.

One dropshipping supplier is Teemill. They make eco-friendly, customisable t-shirts while taking care of the legal side like GDPR.

“We have a Shopify integration that means those with an existing Shopify store can sell products made using our circular supply chain,” Teemill’s Jon Wells says.

“We have also just launched an API, which means a simple line of code controls a production line, factories and supply chain, and anyone with an internet connection can get involved.

“Teemill’s public API, sample code and demos mean people can copy-paste to connect their online store or app directly to the factory.”

#4 Build customer trust and start marketing

Build your customer profile, find out the online communities they reside and who they’re inspired by (which could be valuable if going down the influencer marketing route).

Paid advertising will be essential, as in the beginning as you’ll have zero visibility and no trust yet. This will be your biggest expense, and it is quite possible to spend between £1,000 and £2,000 a month on it at the beginning.

Encourage reviews, gather customer feedback (make the good ones testimonials) and deliver good customer service.

After that, it’s about flexing your marketing muscles with strategies such as sales, discounts and scarcity strategies.

> See also: E-marketing made easy

What are the advantages of dropshipping?

• Low start-up costs making it a low-risk introduction into e-commerce – all you need is a laptop, broadband, an online store and a domain name
• Potentially high profit margins if a niche is found with high demand
• No need to store products
• Possibility of making passive income in time – it is quite possible for a lone dropshipper to make around £40,000 a year
• Can work from anywhere
• Easy to scale

What are the disadvantages of dropshipping?

• Fulfilment costs – you don’t have to store or deliver the product, but you do typically have to pay for the fulfilment and delivery costs yourself. This cost should be covered by your profit margin
• No eyes on quality before shipment – you must answer for supplier error
• There can be high competition
• Typically, there aren’t abilities to customise the product
• Potentially long shipping times/li>

More on starting a business

6 best small business ideas for 2023 – With the pandemic behind us, climate goals to reach ahead of us and a recession staring us in the face, here are six small business ideas to consider in 2023

How to start a dog walking business – For those who love pooches and want to set up a dog walking business, check out this guide to learn more about how to do it

How to start a taxi business – Driving a minicab or a taxi has many benefits. You can work the hours you want to and supplement another career, whether you are a creative, a tradesman or even a teacher. But the biggest benefit could be the sense of performing a service for the vulnerable

The post How to start a dropshipping business appeared first on Small Business UK.

If you are setting up a business for the first time, there are many legal matters to contend with. Some might be obvious, like learning business tax regulations. Others you may not have considered, such as registering your logo as a trademark.

Thankfully, there are many resources available that can make the process simpler. Take things step by step, and make sure you get everything right before you start.

Small Business Pro has a 24/7 legal and tax line that you can call if you need dedicated expert support. It will also help with the heavy lifting of managing customers, taking payments, insurance, finance and HR, plus you’ll get a host of personal wellbeing benefits.

You can find out more about Small Business Pro here.

#1 – Choose your structure

One of the first steps from a legal perspective will be to register your business. You must decide whether you want to do so as a sole trader, a limited company or a partnership. Each of these structures will have different advantages, disadvantages and considerations which you will need to take into account.

How you structure your business will determine how you pay taxes and secure funding, and the options which are available to you will depend on the type of work you do, so it is important to research which option is best for you.

Where you register will also depend on this structure. You may need to register with Companies House if you are setting up a limited company or limited liability partnership (LLP) or only with HMRC if you are setting up a business partnership.

>See also: How to become a sole trader

#2 – Identify who has control

If you are registering a limited company, you will need to appoint a director or directors, and identify the people with significant control over the business, as details of such persons must be included as part of the registration. You can find guidance on the UK government website about registering with Companies House, and about how your legal responsibilities differ depending on the type of business you are setting up.

#3 – Trademark your logos

You will also need to choose a name and ensure this is not already in use or infringe on any existing trademarks. You can search existing UK trademarks on the Intellectual Property Office website, but this can be a labour-intensive process and without expertise in this area, it can be hard to decide whether a similar name represents trademark infringement. It is useful to obtain the views of an experienced solicitor, who can help you to create and, if necessary, register your unique business name.

An important consideration in the early stage is the scale of your business and whether you intend for your business to trade overseas. You may not be ready for that at this early stage, but if it’s part of your planning for the future, you should research trademarks in those countries to make sure your business name is not already registered there.

Finally, you may wish to register any logos, slogans, jingles or other branding as trademarks or service marks. A solicitor can also help you determine the cost of protecting your intellectual property assets in this way. It may not be cost-effective to seek registration, because copyright may provide you with adequate protection.

>See also: Small business logos we really love

#4 – Keep accurate records

One aspect that applies to all businesses is you must keep accurate financial records of your transactions, income and expenses.

As a sole trader, you can usually decide whether to record income and expenses on the day they are invoiced or billed or record them on the day the money is transferred. As well as all income and expenses, you will need to keep VAT records and PAYE records where relevant, and records about your personal income, to enable you to calculate your tax return at the end of the financial year.

You will need to keep more records when operating a limited company. Like a sole trader, you must record all income and expenses (keeping receipts, invoices, bank statements and a cash book if necessary). You must also record all assets owned and debts owed by the company and keep records that will enable you to calculate the value of stocks owned by the company at the end of each financial year.

Beyond financial records, a limited company must keep details of its directors, shareholders, company secretaries, results of any shareholder votes and resolutions and information about people with significant control; that is, anyone with more than a 25 per cent share or voting rights in the business, or who can influence or control the company in another way. If your records are kept elsewhere than your registered office, you must make Companies House aware of this.

#5 – Get a members’ agreement (for LLPs)

If you intend to establish an LLP, you will need a members’ agreement that will determine how the LLP will operate. You can prepare one yourself, but it is better to have a solicitor do this for you to ensure that it is legally binding and covers the most important details. This is also the case for many business contracts, which should be reviewed by a solicitor before you begin hiring employees or conducting business with other companies.

#6 – Know your data obligations

You should also be aware of your data protection obligations. While you have a responsibility to keep information on businesses and people whom you buy and sell from, this is only lawful under current data protection regulations if the person has consented to the collection of their personal data, the collection of the data is necessary for the fulfilment of a contract, or compliance with a legal obligation. While many businesses like to collect data on customers for purposes such as market research or targeted advertising, you must approach this carefully to ensure your data collection and processing comply with the law. You must also be confident that the data you are collecting about customers and suppliers is only as much as you need to meet the purpose for which it is being collected.

#7 – Get employers’ liability insurance

If you are employing members of staff, you will need employers’ liability insurance that covers your business for at least £5m. You can face significant fines if you do not comply. While this is the only type of business insurance that is compulsory, there are other types of insurance that may help to protect your business and it is worthwhile to discuss the available options with an insurance broker to see what might be relevant for the type of business you want to start.

#8 – Get a solicitor on board

Ultimately, while many of the processes described above can now be done online without assistance, you should consider taking professional advice when setting up your business. Even if you are an experienced entrepreneur, regulations constantly change, and it can be hard to keep up with your legal responsibilities unless you have professional support to help you get it right.

Stephen Newman is head of corporate at Ramsdens Solicitors

More on setting up a business

6 best small business ideas for 2022

The post 8 legal considerations when setting up a business appeared first on Small Business UK.

Do I need to register a company name if I am a sole trader?

You don’t need to register a company name if you are a sole trader. However, you should register with HMRC to let them know they should expect an annual self-assessment tax return from you.

7 benefits of registering a company name vs. sole trader

#1 – Pay lower tax

One of the biggest advantages of registering a company name is that running your business as a limited company can help you to legitimately pay less personal tax than being a sole trader.

Limited company profits are subject to UK corporation tax, which is currently set at 19 per cent compared to personal tax rates of 20pc-45%.

If you are the director and shareholder of a limited company, you may choose to take a small salary and draw most of your income from the business in the form of dividends. This reduces the amount of national insurance contributions (NICs) you pay, because company dividends are not subject to NICs.

#2 – Limited liability

Because a limited company is a separate entity to you, the owner, you have “limited liability”. What this means is that you are not responsible for any financial loss made by your business.

#3 – More professional image

If you supply large companies, some prioritise limited companies over dealing with sole traders.

#4 – Easier to raise finance

It is easier to borrow money as a limited company than if you running a business as a sole trader.

#5 – You can sell equity

A limited company is divided up into shares, which means you sell stakes in your business in exchange for funding.

#6 – Tax-free pension contributions

Pension contributions can be made before tax is deducted. Employee pensions qualify as a legitimate business expense.

#7 – Succession planning

It is easier to pass on ownership of a limited company if you retire or on your demise than an unregistered business.

>See also: Registering your business: sole trader or limited company? 

How do I register my company name?

If you’d like to set up a limited company, you need to register with Companies House, the UK’s registrar of companies.

Before you get started you should check that:

• Companies House can reject your proposed company name if it is offensive, includes sensitive words or expressions, or if it implies a connection to government. A government allusion could range from anything inferring official status (such as the words “British” or “Institute”) or implies any connection with official bodies, either national or regional, or any regulated activity such as banking, charity work and even the word Windsor. If in doubt, check with Companies House sensitive word annex here.
• Your business name is consistent in your supporting documentation.

Do I need to a trademark?

It makes sense to trademark your brand or business name. A competitor could start using the same or a similar brand name and erode all the goodwill you’ve built up. Yes, you could bring a legal action accusing your competitor of “passing off” but this is a much sterner test than proving infringement of a registered trademark.

Plus, if you sell your business, you can assure your buyer that they can carry on trading with your business name. A registered trademark is an asset that holds its value and can be sold to a buyer.

You can apply for a trademark here at the Intellectual Property Office.

It makes sense to register your trademark first before you apply to Companies House, rather than the other way around.

See also: How to wind up your personal service company ahead of IR35 legislation

3 things you need to do to register a company name

#1 – Check that the name you want isn’t already taken

You will need to register the business name with Companies House, checking first that no other company has already registered the same or has a similar one. Begin by using the Company Name Availability Checker to do a company name search make sure your ideal name isn’t taken or too similar to an existing company’s name. Then click the link to register a “private limited company online”.

#2 – Make sure you have supporting evidence

Before you receive your “certificate of incorporation”, you need to supply at least three pieces of personal information about yourself and your shareholders.

• Town of birth
• Mother’s maiden name
• Father’s first name
• Telephone number
• National Insurance number
• Passport number

#3 – Complete the online questionnaire

Having cleared that your company name is available, you will then fill out an online questionnaire.

Tasks you will be asked to complete include:

• State whether this is a new company or taking over another business.
• Confirm whether any directors or “persons with significant control” are on the Companies House secure register
• Create a Government Gateway user ID
• State whether the company will be a “Community Interest Company”
  A CIC is a special type of limited company which exists to benefit the community rather than private shareholders. You can find out more here.
• Give the company’s registered office address
  You will need to register your company name to a UK postal address in order to have somewhere for official letters to be sent. Your company address will be publicly available, so if you want to keep your home address private/separate you may want to register your firm with your accountant.
• Say when the company will start trading
• Choose an SIC code for your business activity
  You’ll need to state what your business actually does by assigning a standard industrial classification of economic activities (SIC) code. You can see the range of SIC codes here and you are allowed up to four per company.
• Appoint a company director or directors
  You’ll need to appoint at least one director. The director is the person legally responsible for running the business and ensuring that reports and company accounts are prepared. The director must be over 16 and can’t be disqualified from being a director. You will also need to provide a publicly available official address and a private home address for each director.
• State whether your company has a “Person with Significant Control”
  A Person with Significant Control (PSC) is an individual or company that has at least one of the following:
  – More than 25% of the company’s shares and voting rights
  – The right to appoint or remove directors
  – The right to make decisions or influence decisions that affect the company
• Decide on your share structure
  Most limited companies are owned by shareholders. As a shareholder, you receive a portion of company profits in relation to the number and value of shares you own in the company. However, your shareholding also decides the amount you are liable to pay toward business debts. A company limited by shares must have at least one shareholder, who can also be a director. If you’re the only shareholder, you’ll own 100 per cent of the company. This is most common in small businesses and startups, where just one person assumes the role of sole shareholder and sole director.
• Sign a statement of compliance
  You need to confirm the requirements of the Companies Act as to registration have been adhered to, and that you have viewed and accepted the Memorandum of Association relating to the rules of running a business.

Can I reserve a company name?

No, you cannot reserve a proposed name.

How much does it cost to register at Companies House?

Cost of registering a company name at Companies House

Registering a company name costs £12 online at Companies House and can be paid by debit or credit card or PayPal account. A company is usually registered within 24 hours.

If you need to register immediately, you must apply online at Companies House before 3pm and pay an additional £100 fee.

Postal applications take 8-10 days and cost £40.

Can I register without trading?

Yes, you can. This is known as setting up a “dormant company” and can be useful, even if you plan to carry on as a sole trader. Registering a company even though it won’t trade protects you against predators trading on your goodwill. Nobody else can register a company with the same name, safeguarding the interests of your business.

However, if you decide to activate your dormant company, you must:

• Tell HMRC within three months of the company starting trading
• Send your accounts to Companies House within nine months of your company’s year end
• Pay any corporation tax within nine months and one day of your company’s year end
• Submit a tax return within 12 months of the company’s year-end.

Can I use a company name without registering it?

Yes, you can although this is called a “trading name” and must be linked to your limited company. First, you need to check if your trading name is not trademarked. Assuming that “Coco’s Cuddle Club” is not trademarked, you can then start using it, providing you display your correct company name on all paperwork such as invoices (“Coco’s Cuddle Club is the trading name of Coco Chihuahua Ltd).

Is there a difference between a trading name and company name?

Yes, see above.

Can I use a company name that already exists?

If the company name you want is already registered at Companies House, the short answer is no.

However, if you suspect that another company with the same name only registered your trading company name to make trouble, you could make a claim to the Company Names Tribunal. Remember though that the burden is proof is high, and you have to prove the company which has registered your chosen name is “cybersquatting” and wanted you to pay a ransom.

And be careful of trying to sidle around it by registering a company name that’s similar to other more famous brands. So don’t try launching a handbag business called “Plada” – the Italian designer brand has already shut down that copycat competitor.

Remember to get a matching website name

When registering a company name, make sure you can get the matching website domain name for it as well. You can find out which ones are still available by searching through an internet domain seller such as Nominet or GoDaddy.

If the website address you want has already been taken, but is not yet being used, you may be still able to acquire it through Sedo, an online domain marketplace.

Ideally, you should choose a name for which you can get both the dot.com and dot.co.uk version.

What happens once my company name is approved?

Once the name has been approved, Companies House will issue a certificate to confirm the registration and add the name to its registered list of companies, which is available to the public.

Further resources

• How to choose a great name for your new business – a step-by-step guide to choosing and registering the name of your new business
• Buying a company name before starting up – If I want to buy my company name so no one else can take it, but I’m not ready to start trading, how do I do that?
• Companies House Welsh service – a service for Welsh companies (and LLPs) who prefer to use the Welsh language in their company formation.
• Does registering my company name give me trade mark protection? – Advice on some of the legal ramifications when naming your brand as a business

The post Registering a company name – a Small Business guide appeared first on Small Business UK.

Choosing to go self-employed is a career goal for many working people in the UK. More money, better hours, and a flexible work-life balance are just some of the reasons many people aspire to work for themselves. But should you become a sole trader, form a limited company or even a partnership? Choosing the right trading type is a crucial early decision.

Although the pandemic has caused issues for all types of businesses, it failed to dampen the nation’s entrepreneurial spirits, with the latest ONS data recording more than 4.3m people still registered as being self-employed as of March 2021.

As vaccinations speed up and lockdown restrictions ease, now could be the time to form the business you’ve been planning to set up over the past year.

However, before you start, it’s important to consider the right company trading type for you.

The way in which you register your business can impact your tax, take-home pay, legal responsibilities, and even personal finances, so it’s vital to look at all the options before you make your choice.

Sole trader

Being a sole trader is the single most popular way of trading as business, with almost 60 per cent of UK businesses operating as one.

It’s an easy process to set up, with a simple online registration with HMRC to get started. However, make sure you register before the end of the relevant tax year, as there can be penalties for late registration.

This is the most straightforward means of running a business as it binds you and your company together as one legal entity. You’ll pay tax based on the profits of your business, not on what you’ve drawn from it as payment.

When paying tax, you will need to file a Self-Assessment Tax Return (SATR), where you’ll declare your income and expenses, and be taxed accordingly on your trading profits.

As well as income tax, for the 2021/22 tax year, you’ll also pay £3.05 a week towards Class 2 National Insurance if your profits are above £6,515 and Class 4 National Insurance worked out at 9 per cent on your profits above £9,569 up to £50,270 (and 2 per cent thereafter).

You must register for VAT if your VAT taxable turnover goes over the threshold, currently £85,000.

There is some financial risk involved with operating as a sole trader, as you will be held personally liable for any business debts, meaning if things didn’t go smoothly, you could run up debts, threatening your finances and even your possessions.

Limited company

As sole trader businesses grow, there may come a point where it’s no longer in your best interests – commercially or financially – to remain a sole trader.

By taking on employees, committing to bigger contracts and applying for business loans – or simply seeing a significant increase in earnings – business productivity can increase, along with personal liability if you’re registered as a sole trader.

Any of the above scenarios often act as a stimulus for a transition to becoming a limited company, as this is usually the next logical step, establishing your business as a distinct legal entity. This means in the event of debt, your liability is limited to assets owned only by the company, leaving personal assets such as your house and car protected.

This isn’t the only reason many sole traders move on to go limited, as you can also enjoy the prospect of an established business as well as better opportunities for tax planning.

Making this transition to incorporating your business and becoming a limited company director is relatively straightforward. You’ll need to choose a name, register with Companies House, and register for tax payments like VAT and PAYE with HMRC.

This can all be done online, and there’s plenty of how-to guides out there as well as accountants on hand to take away a lot of this burden for you.

In addition to directors’ responsibilities like keeping records up to date, going limited means you’ll have more flexibility as to how you run your business. For example, you could pay yourself a lower salary and choose to leave money in the business to reinvest or take on additional employees.

As well as paying corporation tax – 19 per cent of any profits made in a financial year – you may need to register for VAT if your turnover is above £85,000. If your salary sits above the threshold of £12,500 per annum, you may also have PAYE income tax as well as National Insurance contributions.

Any dividends paid out of company profits will be taxed at 7.5 per cent at the basic rate, 32.5 per cent at the higher rate and 38.1 per cent at the additional rate, but there is no National Insurance to pay on dividends. It’s worth noting that an accountant will be able to provide advice on how to structure your remuneration in a tax efficient way.

Going limited is a big decision that requires careful and considered planning, but as long as it’s the right decision for you and your business, it can provide a solid foundation from which to grow your business while maintaining a simple approach to tax affairs.

>See also: What is a sole trader? A small business guide

Partnerships

A partnership business is formed when two or more self-employed people work together as owners of a business, sharing the profits and losses. This trading status is close to that of sole traders, as there is unlimited liability, binding the partners’ personal assets with the those of the partnership.

A key part of establishing this type of business is drawing a deed of partnership, which states the amount of capital each partner has contributed, how profits and losses are shared, and who is responsible for bookkeeping. In a partnership, tax rules state that each partner pays tax and National Insurance on their own individual share of the profits.

This means you won’t be going it alone in self-employment and will be able to share responsibility duties between yourself and your business partner while combining capital to create more funds for growth. However, as the business grows, tough decisions may need to be made, which means staying on the same page as your partner is key.

Limited Liability Partnerships

A Limited Liability Partnership (LLP) is a trading status commonly used by solicitors and accountants but can be adopted by businesses from any sector.

An LLP is formed as a separate legal entity from its partners, who will only be held liable for the capital they’ve invested themselves, and any personal guarantees made. An LLP must also be registered with HMRC and can only become a limited liability when the business is making a profit.

To set one up, you’ll need to provide a registered business address and maintain a register of partners, with at least two people taking on responsibility for statutory filing and other legal requirements. LLPs are formed based on an agreement which sets out how the business will work, profit-sharing, how disputes will be resolved and each partner’s individual responsibilities.

Formulating an LLP agreement can be a complex process, with solicitors and accountants often engaged to review documents and ensure they’re satisfactory and within the law. It’s a typical step for established businesspeople looking to form a new company in a market they’re already an expert in.

The advantages include protection of personal assets, a flexible management process and different levels of membership and responsibility, allowing you to increase or slow down your involvement in the business as required. Be aware of the high costs often associated with setting up an LLP.

>See also: 5 best ideas to start a small business post coronavirus

Consider all options before taking the plunge

Going self-employed is a significant milestone in anyone’s life, and one you must consider carefully. The right choice for you depends on the type of business you want to start, your forecasted finances, and goals for the future of the company.

Choosing wisely will be crucial in setting your business up for a successful start, building a solid foundation from which to grow on for years to come.

If you’re close to committing, consider visiting the Companies House website for further information, or speak to a qualified accountant for initial, expert, often free advice on what structure will work best for you to ensure your affairs are in order before your self-employed journey starts.

Joanne Harris is technical commercial manager at specialist contractor, freelancer and sole trader accountancy firm Nixon Williams

Further reading

Five successful business ideas for 2021

The post Forming a company: Choose your trading type appeared first on Small Business UK.

A business plan is an essential tool for start-ups and established organisations alike. It helps you make sense of your offering, the market in which you operate and other essential factors such as costs, revenue and projected profit.

But most businesses have no formal plan, perhaps because most entrepreneurs see little value in creating a rigid strategy that becomes obsolete within a few weeks of its completion.

They have a point, but those who reject the idea of planning wholesale risk missing out on a golden opportunity to isolate needless spending, spot opportunities and expand into new markets.

Jonathan Dowden, Product Marketing Manager at Sage, argues for a new approach to business plans, one in which bulky, static documents are eschewed in favour of practical information that changes as fast as the markets they describe.

“For start-ups it can actually be quite dangerous to write a business plan,” he says. “Unless you have data then you can’t know what will happen. If you go down the route of traditional business planning methodology then the template becomes, not an objective document that helps your business, but something that falsely convinces you that the idea is going to work.

“It’s also intimidating to fill out a template articulately in words, with everything you know, especially if you are not used to writing long-form documents – and many business owners will not have done that since they left school or university.”

The alternative, according to Dowden, is something the business strategist Steve Blank calls ‘customer development’. Instead of writing down your prospects for fast growth, wide profit margins and evangelical followers, answer a few basic questions, including:

– Who are your customers, what do they like?

– How will you reach them – for example, online, face-to-face or a mixture?

– Why would anyone buy from you?

– What activities will generate revenue for the business?

– What resources do you need?

– Who will help you, for example a bank manager, accountant and suppliers?

– Will you make a profit once costs are deducted from sales?

“Get the basic ideas out of your head and onto a piece of paper. You can do that in a matter of hours with Post-It notes. Then test your hypothesis with real customers and learn whether your idea is viable in a repeatable way over a long period of time.

“None of that is answered by filling out a huge template. By starting simple, testing and building evidence you can start filling out the blank canvass of what is achievable and what is not,” says Dowden.

The beauty of this ‘sandbox’ approach to business building is that it’s just as relevant to FTSE 100 companies as it is to sole traders on their first day behind a computer. Tech behemoths Google,

Amazon and Facebook have dozens of live experiments, most of which are mothballed. But the cost of each failed idea is low, while the successes often attract millions of pounds in revenue.

Think of a business plan less as a document that predicts the future and more as a set of principles that will help you discover it, or a science experiment with a hypothesis, methodology, practical and, only once evidence is collected, conclusions.

The approach comes in particularly useful in times of great disruption, according to Dowden.

“Imagine you were running a small business when the pandemic hit. The first thing to do is put your business back up on the wall, look at what sales channels you have and consider which you can adapt to the new environment.

“A yoga studio is hugely exposed, but could you take it online and, if so, what investments do you need to retain customers? Maybe a professional Zoom account and better audio-visual equipment to take the business online. Every time you have an idea, you should go back through this process, mash concepts together and innovate.”

When it comes to the format of your plan, it’s important to pick something that suits your personal approach to business. Are you data-driven or creative? Would you rather an accountant built one for you, or would that represent a loss of control?

You might want to use a simple pen and paper, or word processing document, but software will help you take full advantage of the agile approach, because it’s easy to record data and adapt plans quickly as circumstances change. By running reports, you can also measure the accuracy of your predictions versus what is really happening.

It’s where Sage can really help, according to Dowden: “It’s easy to run reports that show how your business is performing. By storing data digitally, you can do interesting things with it, whether that’s business planning, generating tax returns or creating P&L reports to understand your cashflow better.

“If you can visualise sales and costs, it’s easier to focus on profit centres and manage overheads, all of which information goes back into planning for the future.”

The bottom line? Don’t think of a business plan as a huge, unchanging document. Start small, map out your business and establish goals. If something doesn’t work, change it and go in a new direction.

Get more support on business planning in the Sage Advice hub.

This article was sponsored by Sage, the global market leader for technology that helps small and medium businesses perform at their best

The post How to get more from your business plan appeared first on Small Business UK.

This year should see record number of companies created, with an extra 84,758 businesses setting up in 2020 compared with 2019.

This is equivalent to a 12.3 per cent increase year on year, which is the highest percentage growth since 2011 and the highest actual growth on record.

Between June and August, an additional 59,358 new companies were created at Companies House, according to research.

>See also: How to become a sole trader

Sectors seeing the highest growth included e-commerce (up 88 per cent with 12,490 new businesses registered), clothing (up 55 per cent) and, unsurprisingly, retailers of medical goods (up 176 per cent).

Although on the face of it the SHL research is good news, the reality is that many new companies are created by those who have lost their jobs because of Covid-19.

Rather than create employment, 77 per cent of the UK’s 6m small businesses are sole traders offering little chance of employment to others.

>See also: Registering a company name – a Small Business guide

And there is also a question mark as to how many of the 59,538 companies created between June and August are even legitimate, given the widespread fraud which has gone on with criminals targeting the Bounce Back Loan scheme, which offers limited companies up to £50,000 interest-free for one year.

Business sectors that saw the biggest drop-off in company creation included vets (down 48 per cent year on year), IT consultancy (down 25 per cent), opticians (down 33 per cent) and, again unsurprisingly, aircraft repair/maintenance (down 44 per cent).

Recruitment and training business SHL analysed data for 6.1m businesses created in the UK over the last decade.

However, Iain Wright, director of business and industrial strategy at the Institute of Chartered Accountants in England and Wales, told the Times: “Every downturn in economic history is accompanied by a rise of entrepreneurship. This could be the start of new, innovative businesses.”

Further reading

5 best ideas to start a small business post coronavirus

The post 2020 set to be record year for new companies created appeared first on Small Business UK.

Buying a great company name isn’t everything but when it comes to the success of your business make no mistake, it counts for a lot

It will be the way customers find and identify you, so if you have a great name in mind it’s worth protecting it – even if you aren’t ready to start trading yet.

You might think of buying a company name, but really what you’ll be doing is creating a dormant company – that is a company which is legally registered with Companies House, but doesn’t trade or have any business transactions. As long as you maintain it, no one else can set up a company in your space or sector with the same name.

This is a well-established and accepted practice, but it does come with certain annual responsibilities, and there are definitely a few pitfalls to avoid when buying a company name. So here’s a handy guide to steer you through and make sure the process is smooth sailing.

>See also: How to choose the perfect name for your business

Creating a dormant company

In short, what you need to do to keep a company name for yourself is to incorporate a limited company at Companies House. Buying a company name is actually a really easy process. It used to be that you’d pay a formation agent up to £300 to take this on, but you can complete the process yourself online in well under an hour, even if you’re a first-timer. It can all be processed in as little as 24 hours and all it will cost is the £12 fee.

You could also set up a Limited Liability Partnership, but in all honesty, this is far from the easiest way of doing things and is only something you’d take on in extremely limited circumstances when you’re not actually allowed to set up a limited company – for example, if you want to establish a firm of solicitors.

To set up a limited company will need to name at least one director and one shareholder – but that can be the same person. And you will need to identify any persons of significant control. The company will be marked active for the first year. You’ll need to remember that from the 12-month anniversary of the day the company was formed you will then have two weeks to submit a confirmation statement – this is when you will be able to confirm that the company is dormant.

Where do you want to register your company?

Take a minute to think about whether or not you want to use a home address for your company’s registered office – this information will be in the public domain and will stay there indefinitely. You may prefer to opt for a virtual office address or your accountant’s address. Some accountants offer a “dormant only” service for a small annual fee, which allows you to register the dormant company at their address and they will handle the annual filing too.

Confirmation statements and annual accounts

You will have two key documents you’ll need to submit to Companies House going forwards.

►An annual confirmation statement

This will need to be submitted on the annual incorporation date, confirming all the details of the company such as the registered office, names of directors, shareholders, and so on. It is a straightforward online form, with a filing fee of £13 each year.

►Annual accounts

These are due for the first time 22 months after the date of incorporation, then nine months after the “year-end” every year after that. The year-end for your company will automatically default to the end of the month in which the company was first incorporated. For your annual accounts, you will need to submit a full accounts balance sheet, even if it’s just to detail £1 in the bank or one £1 share.

It’s all too easy to lose track of dates or let a dormant company slip to the back of your mind, so be aware that you fail to submit your accounts on time you will get fined to the tune of £150, even if you’re just a day late, to £750 if you’re more than three months late.

>See also: How to choose a great name for your new business

Do I need to file a corporate tax return with HMRC?

A new limited company that hasn’t started trading is considered dormant for corporation tax. While Companies House and HMRC are totally separate bodies, they are supposed to communicate – but that doesn’t always happen as it should, so take action to make sure HMRC is on the same page.

After registering with Companies House, make sure you lookout for the CT41(G) Form which will be sent by HMRC to your registered office, and follow its instructions to notify HMRC that your company is dormant. The same form will be issued every three to four years by HMRC to obtain up to date details of the company, but if the company does begin to trade in the future it will be necessary to notify HMRC within three months of the start of trading.

Even after notifying HMRC, it is still possible to come unstuck if you mistakenly submit abbreviated accounts rather than dormant accounts to Companies House. Abbreviated accounts signify that your company is active and trading – and if you file these HMRC will come knocking asking for corporation tax, and you could get slapped with a £100 fine for failing to submit your corporation tax return, even if you’re not actually trading.

If the company does begin to trade in the future it will be necessary to notify HMRC within three months of the commencement of trading.

Don’t forget the domain name

If you want to protect a company name at the same time as incorporating a dormant company, it makes sense to also purchase the domain name to go with it. The last thing you want is to get to the point when you want to start trading – and find that the URL you wanted is taken, or worse still, being use by a competitor. These days a company and its website are virtually synonymous, so get both sorted at the same time.

Sean Toomer is managing director and founder of Diverso Accountants

Further reading

Everything you need to know to start a new business

The post Buying a company name before starting up appeared first on Small Business UK.

Working as a beautician was once synonymous with doing business from a salon, but in an age where convenience is king, many entrepreneurs have found it more rewarding to set up their own mobile beauty businesses instead.

This involves pampering customers from the comfort of their own homes. Although, as Salon Gold notes, being a mobile beautician isn’t the same as going freelance. Freelancing simply means being self-employed, but not necessarily on a mobile basis. For example, a freelance hairdresser may choose to rent a seat in someone else’s salon rather than travelling from place to place.

Opening a salon and starting a mobile business are two exciting ways to start making money from your passion, but both are very different. Explore the pros and cons of each option to see which is the best path for your beauty venture.

Going mobile

Setting up

As you’re not required to find premises to start a mobile beauty business, all you’ll need is your equipment and a mode of transport. Public transport may be an option if your business specialises in smaller-scale services like nail art and make-up artistry, but if you need a full arsenal of tools to do your job, it’s time to invest in a set of wheels.

Working hours

One of the best things about going mobile is the ability to set your own working hours, which is ideal if you want to run your beauty business while employed elsewhere. This flexibility also means you may be able to attract customers who want early morning or late evening treatments, as many salons will be closed during these hours. The downside is that if a customer asks you to call in at an inconvenient time, the instability of your income means you might not be in a financial position to decline.

Profits

With no rent, bills or employees to pay, it costs very little to run a mobile beauty business and you can keep all the profits yourself. A portion will probably need to be reinvested back into your business, but you can spend the rest however you like.

Bear in mind you may need to spend a bit more on marketing your beauty business than you would if you owned a salon. Potential customers could walk past a salon by chance, but as your business requires coming to them, you will need to do everything in your power to make sure they know you exist. Remember you’ll also have to pay for public transport fares or for running your vehicle – which costs roughly £160 a month for cars in the UK – and petrol expenses could mount if you’re frequently driving long distances.

Other pros

• Working in your customers’ homes means you’ll never have to deal with time-wasters who don’t turn up to appointments.
• Home visits bring a personal touch to your service, providing an opportunity to build especially close relationships with your customers and gain their trust. This could help you to better win their loyalty, and offer a greater chance of them giving you recommendations to friends and family.

Other cons

• Travel may eat into your working hours, and reduce the number of jobs you could be able to do in a day.
• Being self-employed means you won’t receive sick or holiday pay, and as you don’t have any employees when working on a mobile basis, there’ll be nobody to cover you.

Opening a salon

Setting up

It can be very expensive to buy or rent a space to set up, especially in prime locations.

Beauty business owners Leah Durrant and Mica Nicole say the cost of starting a salon can range from roughly £10,000 to £25,000. Choosing a space is a huge decision to make, as the area must be well-situated, and be able to attract lots of clients without facing competition from other salons. Figures show that the number of beauty salons and barbershops grew faster than any other high street business in 2018, so if there are any rivals nearby, you need to ensure your own premises stand out enough to be successful.

Remember it will also take a while to build a customer base, so you must have enough money put aside to cover rent, insurance and employee wages before you start making an income. And as the salon is the face of your brand, you’ll also have to invest in showstopping decor.

Working hours

Running a salon involves fixed working hours, which will probably include evenings and weekends. This routine allows you to easily plan your personal life around these set periods, unlike mobile beauticians who may need to work at sporadic times of the day if their financial situation isn’t great at that point in time.

If a customer does want you to work outside of your stated opening hours, you could charge them extra for the privilege.

Profits

Being responsible for a property and for your employees means you have plenty of outgoings when you own a salon, so you won’t get to keep as many of your profits.

However, having a large space and a dedicated team allows you to cater to multiple customers at once and make far more money than if you were working alone as a mobile beautician. Plus, with a physical high street store, you’re much more likely to attract spontaneous walk-in appointments and your bottom line could really be boosted by this passing trade.

Other pros

• Overseeing a team of staff means there’s always someone to cover you, so sales won’t suffer if you go on holiday or take a sick day.
• Opening a salon secures your place on the high street and makes you part of the community. Locals will be sure to recognise and get to know your business as they go about their day-to-day lives, so it’s likely you’ll be a contender the next time they need a beauty treatment.

Other cons

• Salon life isn’t ideal if you’re keen on varied work schedules and environments. Regularity is key to this vocation, so you’ll be working in the same place, at the same time, every day.
• You are liable for all the actions of your employees, so it’s your responsibility if any mistakes are made. As a mobile beautician, you only need to consider your own behaviour.

Salon Gold are experts in insurance for hair, beauty, holistics, health and fitness with policies designed for salons, clinics, gyms, spas and freelance or mobile professionals.

Read more

What insurance do I need for my beautician business?

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The number of companies formed in Britain in 2019 rose by nearly three per cent, hitting 681,704 according to research.

Over 45,000 tech start-ups were launched across the UK in 2019, representing 6.6 per cent of all company formations – the equivalent of more than five new tech start-ups launched every hour.

>See also: Reading has potential to be UK’s top entrepreneur hotspot

Unsurprisingly, London had the highest number of new company formations with 221,373 companies registered, followed by second city Birmingham (14,509) and Manchester (9,064). However, Bournemouth and Poole – acknowledged to be the wealthiest places in England – were in sixth place trumping Liverpool and Edinburgh as entrepreneurial hotspots.

Top 10 cities for UK startups 2019

Indeed, tech start-ups comprised 28 per cent of all new businesses launched in Bournemouth and Poole. Tech start-ups were also highly represented in Brighton and Hove (15 per cent), Winchester (12.8 per cent) and Cambridge (12.5 per cent).

The Centre of Entrepreneurs, which conducted the research based on Companies House data, also found some quirky businesses: 10 of the new businesses founded last year were raising llamas and alpacas, while 10 new wine producers were also registered.

>See also: If you want your start-up to succeed, move to Bristol

“It is encouraging that despite a politically turbulent year in which business confidence hit new lows, business formations continued to set records,” said Matt Smith, director of policy and research at the Centre for Entrepreneurs. “It suggests that entrepreneurial spirit is well and truly embedded across the UK with entrepreneurs continuing to turn their ideas into action.”

The North West was far more entrepreneurial than the rest of the Northern Powerhouse region, with strong company formation figures relative to company size in Cheshire East, Salford, Trafford and Stockport. Wales, Scotland, the North East, Yorkshire and the South West were the five least entrepreneurial nations and regions of the country.

Friederike Andres, lead researcher at the Centre for Entrepreneurs, added: “While the Northern Powerhouse has the opportunity to significantly boost entrepreneur-led growth across northern regions, the government must not forget the South West.”

Further reading

Registering a company name – a Small Business guide

The post Company formations rise by 3% in 2019 hitting 681,704 appeared first on Small Business UK.

Bristol is proving itself to be a popular place for entrepreneurs who are starting up a business.

Out of the British core cities, Bristol has the fourth highest number of business start-ups at 93.7 per 10,000 of the working age population in 2017.

The city is well-known for the Clifton Suspension Bridge, being the biggest manufacturer of hot air balloons and, of course, being the birthplace of Ribena. Cary Grant and Banksy also hail from the city.

It has two universities, University of Bristol and University of West of England, so you’ve got the possibility of hiring fresh talent.

Is it right for you? Let’s take a look at some of the key lifestyle factors.

Population

Bristol is the 10th-largest city in Britain, with an estimated population of 459,300, according to the local council.

The age make-up is fairly young, with a median age of 32.7 years compared to 39.9 in England and Wales. Over half (54.2pc) of Bristol’s working age residents are qualified to degree level or above.

It has more children aged 0-15 than those aged over 65 – kids make up almost 19pc of the population. Older people make up a smaller 13pc.

Crime rate

Crime in Bristol is at about the same rate as similar cities, as stated by police figures. In the year ending December 2018, the rate was 115.4 per 1,000 population. That’s lower than Salford (123.55) and higher than Cardiff (106.37).

House prices

The average house price in Bristol is £311,425, according to Rightmove.

Tourism

Council figures show that 13.6m day visitors came to Bristol in 2018, along with 21.m domestic staying trips and over 570,000 staying trips. The visitor economy in Bristol and South Gloucester is valued at £1.3bn. Total tourism supported business turnover is estimated at £1.77bn.

Transport links

Of course, there are plenty of buses travelling around the city. However, if you fancy a more relaxed trip, there’s a floating ferry harbour service.

Bristol trains are mostly serviced by Great Western Railway, heading to various destinations around the UK including Cardiff Central, London Paddington and Glasgow Central. Stations are Bristol Temple Meads and Bristol Parkway.

Like many other major UK airports, you can grab a domestic or an international flight from Bristol. European destinations are popular, such as Paris and Rome, as well as Hurghada (Egypt) Orlando and Santorini.

Heading down to the capital is easy by car, taking around two and a half hours.

Funding

You can find out about various business finance opportunities through Bristol City Council.

What the businesses made of starting up in Bristol

Stats are one thing, but it’s often more helpful to hear from someone who’s been there before. That’s why we’ve asked three businesses what their experience of Bristol is like.

India Langley, science communicator at LettUs Grow, explains why the innovative business scene in Bristol was perfect for their business.

Bristol is a brilliant place to be a start-up. It has a long-standing connection with aerospace firms and expertise in robotics, so it’s the perfect place for a company like ours. Because of its history of innovation, there is a well-trodden path and heaps of support for new businesses.

We were lucky enough to cut our teeth in the SETsquared Centre in Bristol. The hub was set up by the University of Bristol and is based at Engine Shed in the heart of the Enterprise Zone.

We joined them to access its experienced mentorship, world-class training and extensive founder and investor networks. As first-time entrepreneurs, this was an invaluable resource in our early years and continues to be a fantastically effective way to provide training to all our staff, while exposing the whole company to the thriving Bristol tech ecosystem. SETsquared are a core part of this.

Anyone well-acquainted with Bristol will recognise the sign at the entrance to Stokes Croft. It’s an alarmingly apocalyptic countdown to the last harvest – and we don’t seem to have many years left on the clock. Street art like this is just the beginning. There is a real spirit of community and grassroots activism in Bristol which helps spur on projects like ours. Because of this, Bristol has a thriving ecosystem of start-ups, SMEs and talented mentors to draw upon. If you’re in a bind, you know you can always find someone who’s been through something similar to talk to.

We’re lucky enough to have world-leading universities like Bristol, Bath and Cardiff on our doorstep. A Sunday Times poll found that Bristol offers a ‘glamorous, creative, hi-tech and professional variety of jobs, with an above average UK wage of £23,000 a year. Because of this, graduates are increasingly likely to stay and find work in the region.

These factors fuel the thriving hub of start-ups, scale-ups, SMEs and corporate brands, many of which are building tech and digital teams out at pace.

A growing sector

The indoor farming space is very exciting right now, driven by a growing awareness of the impending climate emergency and urgent need for more sustainable solutions in agriculture. There are a handful of other aeroponic companies. But as it’s such a new industry, there are many opportunities for innovation so each has their own niche, from grow towers to high or low pressure aeroponics.

We specialise in a two-pronged approach of intelligent software and hardware. Unlike other companies we use ‘no pressure’ aeroponics, which means we can completely remove any nozzles making the system wipe clean and really easy to use.

‘Idyllic natural landscapes’

Year after year, Bristol is voted ‘best city to live in’ or ‘kindest city in the UK’ and it’s easy to see why. From idyllic natural landscapes to bright streets covered in public art, the views are as diverse as the residents.

It’s impossible to be bored in Bristol; it doesn’t matter if you’re seeking a quiet stroll around one of Bristol’s many museums and art galleries or you’re itching to throw yourself into its bustling nightlife of secret gigs, ‘speakeasies’ and festivals. There’s always something new to discover.

Getting funding

As graduates from the University of Bristol, LettUs Grow benefited from its Enterprise Fund: a collaboration between Parkwalk and The University of Bristol Research and Enterprise Development Division. The fund offers investment into scientific and technological spinouts emerging from the university.

Like us, many of these enterprises are nurtured through the university’s partner, SETsquared Bristol, a business incubator and world leader in developing emerging UK tech entrepreneurs.

We’ve had the support of some incredible mentors over the years, so our top piece of advice is ‘don’t be afraid to reach out’. Mentors help you get an experienced outside perspective in order to elevate your game.

You’d be surprised how many people are willing, even enthusiastic, about sharing their hard-earned knowledge. We’re now looking to pay back the favour and are working with Babbasa, a Bristol-based social enterprise that empowers young people (up to the age of 25). They work with less advantaged communities to help young people move into work, education, or business – so they feel inspired, supported and ready to fulfil their ambitions.

Mike Harvey from Amalgam, a model making company, likes the supportive and encouraging environment in Bristol – even between competitors. 

The boot’s on the other foot – we’ve been very fortuitous as everything started in Bristol and the creative industries have more or less developed in the city around us. It’s been very useful for us.

We find that the creative sector is a magnet – it kind of draws people this way. We’ve got people who are happy to relocate to become part of the south west creative scene. There are many design and the creative companies in the area, and we find that people who want a bit of a change in scenery will move between us. So people that have worked for, for instance, Dyson, will work for us.

The people who have worked at design houses locally will have been with us at some point and it all comes and goes. For that reason, we’re never difficult with people who want to change, move on. We let them go with a smile and they’ll spread the word and hopefully come back, as many have done.

Why employees like Bristol

Speaking personally, I think, you’ve got an ideal blend. It’s a big enough city to have everything you want in it but it’s close enough to the countryside and close to the coast. We have a lot of people who are surfers and those who really appreciate getting out into the countryside.

Myself and several others live out in the countryside with easy access to the middle of the city. Bristol’s got the best of both and increasingly, we’re hearing about people coming down from London for the lifestyle. It’s got that kind of feel.

The vast majority these days are degree-level people wanting to raise their families in a nice, slightly less stressful environment, I guess. You’ve also got a huge range of events like the Harbour Festival and the Balloon Fiesta. It’s a really good place for people aspiring to bring up a family. It’s that kind of a welcoming and encouraging environment.

A collaborative market

Competition is a healthy thing to have. We find that some people want to spring off and go down a particular avenue and set up a business. Being the longest established and the biggest amongst them we hire them, quite often as sub-contractors. They remember us and that all helps to feed a very collaborative circle in a way.

It’s not at all cut-throat. In general, we are on good terms with people that might be seen as competitors. Maybe the ones from a bit further away are more inclined to regard us as rivals but there are several quite big design houses locally who have in-house design facilities but use us. There’s overspill and some of the smaller people that we use in turn. It’s all quite a friendly and collaborative network, really.

It’s an interesting thing – we’ve done some work with the local college where we’ve taken on apprentices from a GCSE/A level course and developed them ourselves. We take on an intern every year for a six-to- eight-month placement. Some of those would come back to work for us after they’ve finished their course. But

There’s also a big pool of freelancers in the area. We did the Wallace and Gromit sculpture trail last year. It was possible to bring in three or four good freelancers to deal with that kind of volume in the short term. People put the word out that they’re available and we keep a database. When their name comes up, it’s easy to bring them in for a specific job.

Encouraging entrepreneurialism

If you know where to look, there’s a lot of support. The funding is a bit up in the air with the Brexit situation, though.

SETsquared runs between Bristol, Bath, Southampton and Exeter universities which offers a business incubator type thing. You’ve now got Engine Shed down the road and the science park too. All these things have been set up with a lot of collaboration from the universities, local businesses and, in some cases, European money. It’s all been dragged together to make a very useful start-up friendly environment. People can get going quite cheaply.

Bristol and Bath are in a creative cluster which is one of several identified for Government support. This will hopefully keep funding coming in and support businesses like ourselves developing in the area.

It’s mostly the creative sector for us here, but that’s a very broad church. We’ve got an aerospace background up the road. Concorde was built here and they make airbus wings just a few miles up the road. BBC Natural History is based here so you’ve got all the live action and TV stuff, plus lots of small and medium-sized design practices. Curiously, we’ve got the finance and insurance industries coming in like Lloyds and Aviva.

The M5 and the M4 intersect just outside of Bristol – so you can get just about anywhere in the country quite easily.

Dan Scholey, COO of fintech software developer Moneyhub, says Bristol is becoming known as Silicon Gorge, drawing on the tech talent from local universities

Nowhere compares to Bristol as a place to live and work

When I moved to Bristol for a job in 2000 I was adamant I would be here for six months and then move to London. I’ve been fortunate to work for companies requiring me to travel to all the major cities in Europe and none compare to Bristol as a place to live and work, which compelled me to stay.

Even living in Bristol it would have been tempting to base our core business elsewhere, but with access to top-notch talent from the local universities and a workforce which genuinely enjoys coming into work, it makes sense to stay in Bristol. Moneyhub is located in Bristol’s enterprise zone, giving fast internet access to support remote working and easy transport to other major cities and countries across Europe.

Bristol’s universities specialise in computer science and creative skills

Bristol is a great place for talent in the software space as there is a good mix of computer science and creative skills, and local universities specialise in these areas. Although, as a growing business, we would always say there is room for more talented people in the city!

Bristol has a growing tech hub

As organisations like Moneyhub have grown and had much success we’ve seen organisations like RBS setting up large development centres in the hope of capturing some of the Bristol magic. The big benefits of this is that it promotes an ever-growing tech hub in the city and there is plenty of space for us to all differentiate ourselves. A bit of competition is always healthy!

Bristol’s transport system needs modernising

Bristol is a relatively small city, but it is large enough to always have exciting events and things to do across the year. Be it the International Balloon Fiesta, the Harbour Festival, St Paul’s Carnival or any of the other hundreds of activities that are going on, and the high-quality food scene.

The only criticism is the transportation. As it remains cheaper, faster and more comfortable to drive even into the city centre than to get the train, we would love to see a TfL-type scheme allowing our staff to mix and match bus and train transport seamlessly and dynamically applying the best fare. This would discourage driving and reduce congestion.

Silicon Gorge goes from strength to strength

We work in the financial technology sector and it is really growing at a pace. The Silicon Gorge continues to go from strength to strength, and it is great to see other industries growing alongside fintech. Companies like Extract Coffee, Friska, St Nicholas Market and all the local breweries are doing well and providing a good social scene for our teams.

Bristol will deliver great results for your business

Think about location carefully, considering factors like being in town vs out of town, public transport vs ease of driving, as these have a significant impact on the people you can attract. Come to Bristol, embrace the people and the way of life and it will deliver great results for your business.

The post The essential guide to starting a business in Bristol appeared first on Small Business UK.

If you’re thinking of alternatives to London for starting your business, you might be considering Birmingham.

In 2018, 18,590 businesses were created there and it’s the most popular destination for those moving out of the capital last year.

In this year’s Birmingham City Council update, businesses are reported to have a three-year survival rate of 51.9pc. What’s more, despite economic uncertainty, companies felt generally positive about conditions in Birmingham.

Is it really a prime spot for business, though? First, let’s take a look at some vital stats.

Population

Mid-year population figures estimate that 1,141,400 people live in Birmingham. A majority of 64.3pc are working age, 22.8pc are children and the remaining 13pc are pensioners. It has the highest percentage age of people under 20 of any core city at 28.6pc and with four universities, you’ve got plenty of access to young talent.

Crime rate

There are conflicting studies around whether Birmingham is a safe or an unsafe city. Police statistics say that in the year ending December 2018, the crime rate in Birmingham was lower than average (95.69 per 1,000 population) compared with similar areas like Manchester (172.77), Leicester (121.45) and Liverpool (120.38).

House prices

According to Rightmove, the average house price is £202,481, 5pc cheaper than last year.

Tourism

Figures from the West Midlands Growth Company show that Birmingham had a record 41.8m tourists in 2017, forking out an impressive £7.1bn in spending. It’s grown by over 50pc in the last five years, more than any other part of the UK.

Transport links

Birmingham is well-connected by bus. You can pay using Swift Pay As You Go which you can use as a cashless card for single, return or day travel on the bus or tram.

Snow Hill Station has rail services to Solihull and Worcester and a metro towards Wolverhampton. The tram runs to Bull Street in the City Centre, Corporation Street and New Street Station.

Speaking of trains, Birmingham New Street Station is the main port for UK-wide train journeys, travelling to cities including Plymouth, Dundee, Leeds, Cardiff and London.

Birmingham Airport is based seven nautical miles east southeast of the city. Flights cover over 150 domestic and international destinations including Aberdeen, Frankfurt, New York and Istanbul.

Funding

There are a huge number of funding opportunities. West Midland combined authorities provides apprenticeships (check) and support locally. Plus, we’ve got training and the Government-funded Solihull Enterprise. GBSLEP growth hub provides funding opportunities and grants too.

Read: 150 small business grants you can apply for right now

What the businesses have to say about starting a business in Birmingham

It’s one thing taking a tip from the figures, but what do the people who have actually set up the businesses think? We find out more.

Melissa Snover, founder and CEO of Nourish3d, a firm which 3D prints vitamins, tells us why Birmingham is the hotspot for starting a new business.

I chose Birmingham as our base for Nourish3d because there are three fantastic universities within 10 miles (Aston, UoB and Birmingham City University) which all have 3D-printing programmes and we wanted to be close to the experts so we could create the best, most innovative product possible.

Also, I’m originally from the US, and the vibe of Birmingham reminds me of Brooklyn before it exploded. You can feel it in the air that this is the perfect time for a business to get established here! There is an awesome energy, particularly in Digbeth where we are located, and there are tons of other start-ups based here. This makes it the ideal environment for new and growing businesses.

The consumer market in Birmingham is extremely diverse too. It is a melting pot of cultures and demographics, which makes it an awesome place to test new ideas.

As we are growing at such as fast rate, we are constantly recruiting at the moment. We have been extremely pleased with the level of talent that we have coming through and we have built a great team.

‘Dragon’s Den was a great learning experience’

While the episode of Dragon’s Den that I participated in was aired this year, it was actually filmed in May of 2018. As all entrepreneurs know, everything moves extremely quickly when you’re building your own business. The filming seems like a long time ago now and at the time we were still very much still operating as my previous business, Katjes Magic Candy Factory, which custom 3D-printed sweets for the likes of Nickelodeon. Now we have evolved to become Nourish3d.

We were approached by the Dragon’s Den team to go on the show and at the time we were extremely flattered. It was a huge undertaking from both a time and commitment perspective for myself and my team, but it was a great learning experience. It helped us understand that we needed to look at the structure of our business if we wanted to branch out to become a global disruptor in health and nutrition – and for that I am grateful.

Thinking of setting up in Birmingham?

Do it! Birmingham is better value than London, it has a great talent pool and will soon be home to the HS2, meaning it will first become a commuter city for London then maybe even one day a bigger hub for business than the capital – you never know!

Eman Al-Hallawi tells us why she decided to re-launch her business, Entec Si, in Birmingham.

We were originally based in St Albans, but we decided to relocate to Birmingham as our first contract was there. More and more of our clients are in the Birmingham area so it made sense to us to move here. Even though we work nationally, a lot of our work is based here, too.

It’s a central location which is provisioned for clients. You can see by the number of cranes that there’s a lot of growth and investment in the area. HSBC is based here, HS2 is going to be here and we’ve got an important library in Birmingham.

The city is tied to business growth – launching here is the best decision we’ve made in years.

A city of transformation

I came to university here in 1987 and never left. Since then it has seen a massive transformation. It’s a lifestyle and career city, a great place for socialising. We’ve got an amazing choice of theatre and restaurants in a relatively small area.

A big contingent of people are based around Birmingham and the region. It’s ideal for social networking (and Michelin-starred restaurants) while still being able to get to the countryside quickly. The community is great – everyone knows everyone. You’ve got a real balance between city and personal life.

Sourcing talent is a big challenge across the country. The recruitment of senior people has been steady. We recruit for cultural and value-based fit first and skills and experience second. We’re addressing recruitment needs by developing our own staff, really more of a grassroots approach.

Birmingham has got universities so there is talent available, the best option is getting them early. We tap in through apprenticeships, placements and access to universities and colleges. We’re making the most of what’s available and benefiting from the outflux from other cities.

What we’ve found is that the networking opportunities are more useful than the financial ones. It’s how we were introduced to our accountant and to HSBC.

Popular and growing sectors

The professional services sector (particularly legal and financial) is big. Production is growing hugely as are the marketing and media industries. It goes hand-in-hand with rail and passenger growth.

If you want to start-up in Birmingham, get out there and meet as many people as you can – they’ll point you in the right direction.

Amanjot Johal, founder of 40 St Paul’s, on the struggle faced by competition from corporate chains.

I’d been working in the hospitality industry in Birmingham for 12 years when, in 2015, I decided it was time to take the leap and start my own bar that provided the drinks expertise and intimate table service I’ve always personally loved.

I was able to finance initial start-up costs with the help of a £25,000 fixed-interest loan from Start Up Loans and decided to base the business in Birmingham to keep relocation costs to a minimum by staying in an area where I already knew the industry. I also felt Birmingham was lacking the premium bars with creative drinks menus and intelligent staff I’ve experienced in other cities and wanted to take advantage of this gap in the market.

40 St Paul’s has now been running for three and a half years and has won numerous awards, including being voted “Best gin bar in the world’ at the Gin Awards” in February 2019. It’s great to witness our continued growth month-on-month, showing there really was a demand for an experience like this in Birmingham.

‘Quality of life has improved massively over the past few years’

For the most part, I’d say the quality of life in Birmingham has improved massively over the past few years for most people. Of course, the disparate spread of wealth is a huge issue, but Birmingham has nevertheless become a thriving, forward-thinking city with an increasing variety of options for music, arts, food and drink.

There is undeniably an entrepreneurial drive in the city, with new businesses constantly popping up, but often you need to dig deep to discover these incredible opportunities. Birmingham’s multicultural status also makes it a place where people feel safe and is often the reason people from all walks of life move here to start a business, including myself.

At 40 St Paul’s, we’ve never had staffing issues and have found that Birmingham has a huge pool of incredibly talented people in the hospitality industry. However, turnover can be an issue because Birmingham’s drinks industry isn’t high profile enough to retain those who want to make a name for themselves. There simply isn’t the same recognition of the talent behind mixology and hospitality as there is in London, which sadly often means people leave the industry all together.

Despite this, we’ve never struggled with attracting customers to our bar, even with it being so specialised, which we put down to it still being the only bar of its kind in Birmingham.

Competition from corporates

I’ve found the biggest competition in Birmingham comes from the rise of national chains and their ability to buy prime real estate, making it tough for small independent businesses to compete in the main shopping district.

We’re lucky to be based in the increasingly popular Jewellery Quarter, which is full of independent boutique businesses and has an incredible community of entrepreneurs. We all support each other, and I truly believe the sense of camaraderie that this creates is what provides real value for consumers.

Small businesses participate in and support the local economy in a way that these corporate chains simply don’t. The business owners in the Jewellery Quarter also support each other and regularly meet up to discuss business plans, often building on the mentoring we’ve received.

Birmingham not for you? Try:

• The essential guide to starting a business in Belfast
• The essential guide to starting a business in Cardiff
• The essential guide to starting a business in Glasgow
• The essential guide to starting a business in Leeds
• The essential guide to starting a business in Newcastle

The post The essential guide to starting a business in Birmingham appeared first on Small Business UK.

It’s 10pm in New Zealand and Peter Hillary, son of Sir Edmund Hillary, is chatting to me from a remote location where the WiFi can just about withstand an interview.

He explains how he and his grandchildren set up clothing line, Edmund Hillary, recreating the wares of the world-famous mountaineer.

How did the business come about?

Well, it was one of those chance meetings with a man called Mike (EH’s co-founder and CEO). He got in touch with me when we were in London attending the thanksgiving service for my father’s life at Windsor Castle.

We discussed the possibility of trying to do something like this which would also benefit the work and the legacy of my father, particularly in Nepal, but also in outdoor activities for young people.

It’s been in the making since 2008. We’ve been working on various versions of the range and in the past few years, we’ve got investment and come up with some wonderful designs and so we launched towards the end of 2018.

The thing is that the clothing really isn’t made for mountaineers, it’s more for people who like the idea of mountaineering or who are mountaineers but are off-duty, so to speak.

Why did you decide to focus on ‘off-duty’ clothing rather than hiking or activewear?

We decided not to focus on clothes that people would wear to head off to Mount Everest but that they would wear in more of a leisure situation and tell the story of the person wearing it, what their priorities are and the kind of the adventure they’d like to go on.

The thing is that we live in an era where people are heading out and they want the latest technology, but it doesn’t mean they want to wear it all the time. You might wear some Goretex gear to ski in, but you won’t necessarily want to go to a restaurant après ski wearing it. We identified this as a great niche for the type of clothing we were producing.

It’s a high-quality brand but it’s not a luxury brand – it costs a lot more to produce goods of this order. You know, it’s the type of clothing that is smart and retro, more like heritage items. They are the sort of clothes you’re going to wear on a cold evening in London or Berlin.

It’s not a Louis Vuitton brand at all and it really stands for something special in that regard.

The clothing that mountaineers were wearing in 1953 was the very best that could be procured back then. It was magnificent clothing. I think that people see tremendous value in that today – it’s made of wool, cotton and natural fibres and it’s very comfortable to wear.

How has it been expanding into womenswear?

We never really thought that would happen. Men were our focus in a lot our outlets, but women were also interested in them and we realised we needed to produce some different sizes. We have had quite a few sales to women who were buying the smaller men’s sizes, so we’re going to produce a limited range for women and we’re very excited about it.

How did you approach the market research?

Mike and Clare (the company’s marketing director) have done a lot of work in their past careers in market research and that was an important part of guiding us to where we felt we should target our products, what level we should sell them, who would want them and for what reasons.

We’re happy with the position that we’re in and with the clothing we’ve produced so far.

What were the challenges in recreating Edmund and Tenzing’s clothing?

We had a wonderful couple of designers who went through thousands of photographs and movie film to mimic the clothing. They looked at them and modified them in various ways, making them applicable to today with pockets and similar features.

We’ve used prototypes on a lot of mountaineering expeditions and they were very good, just as they were in 1953.

How do you deal with the off-season lull?

Off-season is certainly one reason we’re looking to develop markets in New Zealand and Australia so that we’ve got both seasons happening across the globe.

Geographically, where is your primary market?

The primary market really is in Europe. The 1953 expedition was out of the UK but some members were from other parts of the world, such as my father from New Zealand and Tenzing from Nepal. It was really those three countries that combined to make the success of the Mount Everest expedition.

All the products are made in the UK and northern Europe with the Merino wool made in New Zealand and other items made in other destinations. Eventually we’re going to have scarves and caps coming from places like Nepal.

Consumers are becoming more ethically minded. How has that shaped your ethical policy?

It’s important with a name like Edmund Hillary – the man who supported environmental issues, who supported education and health, communities in remote villages in Nepal and encouraged young people to go out and have healthy lifestyles.

We want to produce high-quality goods that people will get years and years of pleasure and enjoyment out of, that last well and use a lot of natural fibres. We hope we continue to make the majority of our garments which are using mostly natural fibres. I think it’s consistent with the legacy of the man.

As for the industry, we all see that the problem is bigger than clothing. We’re living in a time of rampant consumerism and of course we are selling clothing, but we want people to choose products which are of really high quality and that you’ll be able to enjoy for a long time. Really, that is not only consistent with Edmund Hillary, but it’s consistent with trying to reach higher ethical standards.

Businesses are part of communities; they have to have ethical standards. They need to be seen to stand for something. It helps to be able to see what the company itself is doing. We all need to post on various sites to publicise what we’ve been doing and investing in. It’s the only way people can be sure they’re carrying out what they say they have been.

For example, Patagonia put in a percentage of their sales to environmental schemes like buying land to get rehabilitated. They post regularly with how they are doing. I think that’s something we as a business will have to follow.

Why did you decide to opt for a private crowdfunding campaign which is only open to select Crowdcube members?

That’s what was recommended to us. Crowdcube has a huge following and it was open to all of those people. We were advised that these were people who had shown a significant interest in these types of ventures.

Crowdcube has a wide variety of investors and it’s been a huge learning curve in our funding rounds. It’s possible for someone to come in and make quite a large investment of thousands of dollars or more. On the other hand, they can make an investment of £20 or £30.

What are your business goals over the next five years?

Like any start-up, we’re trading, we’ve got products, we’re pleased with how things are going. But we need more investment now to take it to the next level. We aim to have other stores and outlets available in various areas within Europe and other major cities.

In order to do that, you need money for stock and to produce items for other places. We’re looking for investment that will carry the brand through for the next two to three years.

We’re also in talks with outlets around China. We’re all aware that China is no longer an emerging economy – it is a vast economy and a wealthy nation in many areas. The next Winter Olympics will be held there and that’s a distinct opportunity for us.

Are you seeking finance exclusively through crowdfunding or with other avenues?

For the first launch we had angel investors, but crowdfunding is our primary source for this expansion.

I’m hoping to go back to Everest with my younger son next April or May wearing the 1953-style heritage gear. We’ll be up on the mountain and the Edmund Hillary range will be up there too.

Read more

How to start a successful clothing boutique

The post Entrepreneur Q&A: Peter Hillary, co-founder of Edmund Hillary clothing appeared first on Small Business UK.

Fewer than one in 10 small businesses set up shop because they actually see a gap in the market.

And only 3pc of SMEs go into business to “create the next big thing”, according to new research from business lender Iwoca.

The findings of the Iwoca survey are bound to dismay venture capitalists, who look for start-ups who have identified a gap in the market and present themselves as the solution.

Working for oneself is the number one reason SMEs give for having started a business (69pc), with “so that I can love what I do” being the second most powerful motivator (31pc). Spending more time with family is in third place (23pc). (Given the sheer sweat and always-on nature of running a small business, the idea that one gets to spend more time with loved ones will surely raise eyebrows.)

Worryingly, 6pc of respondents say they only launched their SME because “they weren’t sure what else they could do” with 4pc of respondents saying they started a business because they “got fired”. One business owner’s gnomic reply was, “It’s better to be the head of a chicken than the tail of an ox.”

Business obstacles

Lack of finance is seen as the biggest obstacle to running a business (21pc), followed by late payments (19pc) and “red tape” (18pc). Brexit only concerns 15pc of small business owners.

The speed with which finance can be raised is important to business owners (58pc).

And when it comes to late payments, almost 40pc of SME owners say they hate the Stess which comes with not being paid on time, with one in five saying they’ve been “ghosted” by debtors who ignore them when they press for payment.

Iwoca interviewed 1,000 SME owners in May for its small business survey.

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Further reading

The seven-point checklist for setting up a business

The post Fewer than 1 in 10 small businesses set up because they spot market gap appeared first on Small Business UK.

As a contractor, freelancer or small business, you may consider operating through a limited company.

In order to establish your limited company, it must first be registered with Companies House, the UK registrar of companies which is accessible to the public. As part of the process, you will be required to name your limited company in accordance with legal guidelines set out by HMRC.

When naming your limited company, you should consider the connection this establishes with your sector, trade, and service offering.

The long-term viability of the name should also be considered, as if you expand or begin trading overseas, the name should remain appropriate and relevant to your company and customers.

By futureproofing your company name, it guarantees cost efficiency as you will be able to commit to marketing collateral and a dedicated domain, saving you time and money in the future.

Similar or ‘same as’ names

You are unable to use a name which is already in use, so before committing to your chosen company name, check that it is available.

Names that are similar or “same as” are those which appear only slightly different due to adding a punctuation mark or a special character.

Names that are similar in meaning can also be rejected if this bears similarity to an existing name, for example, Computers4U or Computers4you.

It’s worth noting that when the registrar compares your company name to others, punctuation, ‘www’ and connecting words such as “or” and “and” will be ignored.

If your company is able to obtain written confirmation of no objection from the business you may be in conflict with, you will be able to use a similar name.

And if the company is part of the same group, you will be able to use a similar name.

Existing trademarks

Your proposed company name should not breach any existing registered trademarks. If you are a contractor specialising in a particular platform, such as Java or WordPress, be vigilant in your official use of these trademarked names.

Limited or Ltd

You are able to pick between “limited” or “ltd”, which will sit at the end of your company name. If you pick “limited”, you are able to shorten this to “ltd”, whereas if you pick “ltd”, you will not have the ability to lengthen this.

Becoming a limited company can help add credibility to your brand, a degree of professionalism and function as a selling point. Other businesses may be more likely to do business with you if you are a registered limited company.

Specialist terms

You cannot use names that are of an offensive or sensitive nature as this could offend, confuse or mislead a customer. If you feel that the use of such a word is warranted, you will be required to attach additional documentation, as without this, your request will be rejected.

You are unable to use terms that denote a connection to a professional regulatory body or governmental departments. In order to do so, you will require permission from the end party responsible for the regulation of the term. For example:

• Dentistry: General Dental Council
• Insurance: Financial Conduct Authority
• Parliamentary: The Corporate Officer of the House of Lords and House of Commons
• Accredited: Department for Business, Innovation & Skills
• Fund: Financial Conduct Authority

The full list of sensitive terms and the responsible party can be found here.

Professional bodies also govern the use of terms, such as architect and nurse. This is to protect the reputation of the profession and to ensure that accreditation is not falsely claimed.

How can I pick a suitable company name?

Naming your limited company can feel like a drawn-out process without the appropriate guidance and inspiration.

Here are our top tips when naming your company:

• Futureproof – If you are intending to cross into different areas in the future, decide on a name which won’t shoehorn you into one sector.
• Tone – If you are in a sector which relies on credibility and reputation, use a professional tone to show that the customer is in trusted and knowledgeable hands. If your industry demands creativity and imagination, use a personable and light-hearted tone. Use wording which denotes the intended emotion and impression. For example, the names of challenger banks in comparison to high-street banks are instantly more vibrant, unique and informal. When comparing Tide, Monzo and Revolut against HSBC, NatWest & Royal Bank of Scotland, the challenger banks are easily distinguishable from the high street banks, as intended.
• Marketing – Many determine their company name after checking the availability of the domain name. Pick a name which is easy to insert into a search engine if you intend to establish an online presence. Ensure that the URL spelling is appropriate, as once separate words are put together, the URL can appear confusing.

What’s the difference between a company name and trading name?

A company name is a legal name which is used to register the business, ending with either “limited” or “ltd” which shows your tax entity.

The trading name is the name used to refer to your business when actively trading, this is without the “limited”, “ltd”, “limited liability partnership”, “LLP”, “public limited company” or “PLC” at the end.

How can I stop others from using my company name?

Register your company name as a trademark in order to prevent other businesses from using it. After obtaining a trademark, you will be able to take legal action against anyone who uses your company name. The trademark process takes around four months if there are no objections, and the trademark lasts 10 months.

Related: Another company is using our brand name, what can we do?

The trademark is only active in the UK, so if you decide to trade in the EU or internationally, you will be required to undertake a separate trademark registration procedure to protect your brand.

What does ‘passing off’ mean?

Passing off is when another business uses your company name to financially benefit from the goodwill associated with your brand in a fraudulent manner. This form of misrepresentation can damage the reputation of your business. The law of passing off protects your business from other businesses mimicking your company name to profit from association.

How can I change my company name at Companies House?

You can apply for a name change at Companies House following the registration of your company. An NM01 form is required to give notice of a name change. You’ll need the following details to complete the form:

• Company number
• Original company name
• New company name
• Special resolution
• Signature

You may decide to apply for a name change due to a rebrand or a change of services. You will be able to trade with your new company name once the Certificate of Incorporation on Change of Name has been received as confirmation.

Choosing the name of your limited company can be a challenging process for even the most creative of minds. By taking the guidelines set out by HMRC into consideration, you will be able to swiftly complete the process and officially begin trading through your limited company.

Keith Tully is a partner at RBR Advisory, an advisory platform for businesses seeking restructuring advice, turnaround support and commercial finance

Further reading

Britain’s favourite small business names revealed

The post How to choose a great name for your new business appeared first on Small Business UK.