Starting a home based business in the UK is an exciting venture but it’s not necessarily as simple as you may think. There are key considerations to think about in advance. Some of these considerations include taxes, business structure, legal issues, accounting, and more.
The entrepreneurs that are most likely to succeed with a home based business are the ones that are the most well-prepared.
In this blog post, we list 8 key considerations to make before starting a home based business in the UK so you can be well-prepared.
1. Create Your Company Name
A name can have a big impact on any business’ success as aptly demonstrated in this article by Adam Fridman writing for Inc.com. It is important that you give your company name some serious thought.
Once you’ve chosen a name you like, we recommend that you strongly consider trademarking it. Ideally, do some research in advance and find out whether or not the name you want to use has been trademarked. If it hasn’t been, then trademark it before you even launch your home based business in the UK, and protect your future brand and business.
Otherwise, you could end up like this guy and have your entire livelihood and brand name stolen by a big corporation.
2. Choosing Your Business Structure
This is arguably one of the most important legal decisions you will make in your business. There are four types of business structures and each have different advantages and disadvantages. Make sure you give your business structure some serious thought because it can impact different areas of your business like hiring employees, the amount of taxes you pay, and so much more.
If you choose a business structure that is not ideal for your specific circumstances, then you could find yourself facing legal problems. Be prudent and speak with a lawyer about this.
3. Do Your Target Market Research
Without a market of people who have a big problem and who are willing to spend money on solving that problem, you won’t be in business for very long. Make sure you conduct target market research so that you know you are creating a product or service that will actually make you money.
You could have a great idea for something. However, if the market isn’t big enough and filled with consumers hungry for your product or service, then you will be wasting your time and energy. Do your research in advance and make sure people want what you are selling.
There are many ways to conduct target market research. One of the easiest ways is to see if there are other businesses selling something similar to what you want to sell. If there is, then you know there is a demand for what you’re interested in selling.
Pricing is one of the most important things that will affect the overall profit of your business. You need to make sure you’re charging prices for your product or services that will net you a profit once all your expenses are paid. Every business, including a home based business, will have expenses such as taxes, paying employees or contractors, software, costs of equipment for running your business, and more.
If you don’t charge a high enough price for your product or services, then you will find that you’re not able to take home a decent profit after expenses to provide for yourself or possibly keep your business afloat.
5. Finding A Place To Work
This will have a big impact on your productivity each day so make sure you find somewhere to work that will set you up for an inspiring and productive day. Since this is all about starting a home based business in the UK, the best way to set one up is to create a home office where you won’t be distracted from typical house chores or family members during your working hours.
Another option is to rent out a co-working space for one or two days per week to break up your work routine a little. You could even break things up by going to a cafe with good internet, a few times per week if you find such an environment works well for you.
Regardless of what exactly your home based business is, you’re probably going to need to purchase equipment. You’ll need a laptop or desktop PC and any software needed to use these properly. You may even need to buy some home office equipment like a chair, desk, phone, and more.
Whatever equipment you need, just make sure to keep your receipts for these purchases so you can offset them against tax.
7. An Accountant
You may want to do all of your business accounting and tax returns yourself but we recommend you hire an accountant. You need to be in charge of all of your income, expenses, and taxes. The safest way to legally ensure all of this is by hiring an accountant. More often than not, an accountant will actually help you save money and even get more back in taxes than what you would if you did it by yourself.
8. A Marketing Budget
If you actually want to get customers and grow them, you will need a marketing budget. Word of mouth, family and friends, and even going to events will only get you so far. If you really want to be a profitable home based business in the UK then you need to invest money into marketing.
This can include such things as spending money on fliers, professional brochures developed, and getting a website setup. Then you also need to think about spending money on actual marketing strategies to bring in customers via direct mail, SEO, inbound marketing, social media, and much more.
Marketing is an area of your home based business you cannot afford to invest money into each month if you’re actually serious about long-term growth. Develop a marketing plan to go along with your marketing budget.
Final Words: What You Must Consider Before Starting A Home Based Business In The UK
Starting a home based business in the UK is a dream for many entrepreneurs and there is no doubt that there are many advantages to running a business from home. However, it doesn’t mean everything will be all rosy and without pitfalls to be aware of.
Using this blog post, you can at least be sure that you’re well prepared to begin your venture. If you have any legal questions you need answered, then book a free Startup Legal Session by clicking the image below.