Top Tips for Starting your own Limited Company
Starting your own limited Company can be a very exciting time for a new business owner. But there are also a lot of already established sole traders that have been in business for a while that can decide to change their business structure for the better and turn their successful enterprise into a fully registered Limited Company.
Registering as a limited company can add an extra level of professionalism to your business image. This can help your business become even more successful because customers, clients and B2B companies will be more inclined to trust you and buy your products or services if you are a limited company rather than a sole trader. In fact, a lot of B2B companies will only trade with another limited company as a general rule so it can pay you in the long run to register your business with Companies House and form a limited company, especially if you are working in the B2B sector.
If you are thinking of starting off a brand new business on the right foot by forming your own limited company, or if you are thinking of taking your existing business to the next level and turning it into a limited company, then we have some top advice and tips to assist your planning and procedures.
Think it through
This applies more to those looking to start a brand new business because not everyone has what it takes to launch a successful company. You may have a brilliant business idea but it takes more than a good idea to make a business a success.
Are you really ready to take on all the necessary everyday chores that it takes to run a business? You may only want to focus on the part of your business that excites you and that you find interesting, but don’t forget that every single business no matter how large or small needs to have a sound structure in place that ensures all necessary tasks get done every single day.
If you are a solo-entrepreneur and want to take on everything by yourself, are you really prepared to handle everything from building your own website, marketing your goods or services, balancing your bookkeeping and accounts, looking after your customer queries, keeping up your social media contact, dealing with HMRC and Companies House deadlines, right down to answering your business calls and opening and handling your business post?
Do you have what it takes to launch, sustain and grow your business? You may need to take some time to plan a strategy and look at ways of outsourcing tasks and bringing in expert help with certain jobs.
Look at helpful options such as:
- Hiring the services of a business accountant
- Use a business call handling service
- Use a professional mail handling service
- Use a trusted Company Formations Company
- Hire a freelance web developer
The most important part of becoming a successful business owner is realising that you don’t have to do every single business task all by yourself. You can ask for help. It makes sense to take as much pressure off your shoulders as possible, especially if you know that you are not particularly good at a job.
You may hate the thought of sitting for hours each week performing your bookkeeping duties or groan at the realisation of how much time it can take to sort your business mail – time that you could better spend elsewhere that could be a more productive use of your efforts. This is why it makes good business sense to outsource tasks that you don’t relish or don’t feel that you can perform efficiently by yourself.
Thoroughly test out your business idea
You may have settled on your business idea, but you need to explore all avenues to make sure it can become a reality. Do some market research to ensure that whatever product or service you plan to offer will have an eager customer base.
- Is what you plan to offer something that people actively want or need?
- Is it something that you can make a decent profit from?
- Does your product or service actually work and deliver results?
- Will you have a large enough customer base to make it viable?
- Will your customers become repeat buyers?
Answer all of these questions to make absolutely sure that your business idea will be a success, or if you need to back to the drawing board to make improvements or develop your idea further.
Identify your customer market
Every single business product or service needs to have an end customer or consumer. That is a fact that sits at the core of every business – without an end customer, you don’t really have a business!
While you may think that you have a target audience in mind for your product or service idea, you need to do a good deal of homework to really narrow down, define and dissect your target market. You need to also look at your competition and where your target market may already be sourcing your product or service from.
Are your competitors running healthy and successful businesses? If so, this can be a good indication that there is also room in the marketplace for your product or service. Don’t worry about over-saturation of the market because what you plan to offer should be better than what your direct competitors are already offering.
Write up a comprehensive business plan
Every successful business needs a solid and comprehensive business plan in place. You can use your business plan to help your company move forward and provide you with small milestones to reach or targets to achieve as you build your successful business.
Even if you are planning to start out as a solo-entrepreneur or sole trader, you can benefit from writing up a business plan. Don’t forget that your business plan isn’t set in stone. It is a plan that is actually quite fluid and can be changed or updated as your company evolves into the future.
You should look at including plenty of details so that should you want to encourage investors into your business or you want to seek out business credit from banks or other financial lenders you will have a solid plan to show them that includes a mission statement, detailed customer market, and financial projections including costs for producing and delivering your product or service.
You can get free advice for writing your business plan from the UK Government website. You can even download a free business plan template and find examples of good business plans to help guide you.
Form your Limited Company and register your Business Name
You may already have your heart set on a perfect business name for your new company, but you need to make sure that your chosen name isn’t already being used by another registered company. To do this you can check the availability of your chosen name using our online company name checker. You can do this from our home page on our website. Simply type in your chosen company name into the search bar and we will be able to tell you instantly if your chosen name has already been taken.
Should your chosen business name be available, you can register it instantly with us at Your Company Formations so that no other business will be allowed to take your chosen name to trade under. We will handle the company formations process on your behalf and register your new Limited Company officially with Companies House. This will give your new company a full legal structure allowing your company to exist in its own right and protecting your company name.
Forming your own Limited Company not only shows your commitment and dedication towards making your business a success but also demonstrates to your customers, clients and B2B partners that you are a professional business that can be taken seriously.
You will also greatly benefit from forming your own company on a personal level. Because your registered company is considered to be a separate entity that stands alone, it effectively separates your business from yourself and your own personal assets. This means that once your company has been formed, your own personal assets such as your home and finances are no longer at risk of being lost should your businesses go under.
Establish a working budget
You should look into the financial side of your business idea to determine how much money you will need to get your product or service developed and off the ground. If money and finance isn’t your strong point, then it would pay you to hire the services of a business accountant to help you figure out your costs and a working budget that would deliver you a profit.
Plan for the costs associated with hiring in help or outsourcing tasks as well as for creating a marketing plan to put into action, if you are not going to do this yourself.
Whether you plan to start your business from your kitchen table or you plan to hire some business premises and launch from there, you will still need to seek some form of business financing to get you started. This could be as small as a business start-up loan from a local Credit Union office in your town to asset funding for heavy machinery and production tools, or a major bank loan from a high street bank or business finance agency.
What you need to do is to find an investor that understands your business and be someone that you will be happy to work with going forward into the future.
Many lenders will provide you with a business advisor to work with. It really pays to listen to their advice as they are experts in the business field and can often help to steer you clear of common pitfalls and avoid mistakes that many new business owners make.
Take advantage of free business resources
There are plenty of free resources to be found online and in your local area where you can source advice, training and general guidance to help you in your enterprise. Many local colleges offer free or low-cost business courses, especially in bookkeeping and finance, IT and business marketing.
The internet is a fantastic free resource to look up plenty of business tips and advice. You can follow business blogs that are within your business sector or industry, follow major business influencers on social media who often release regular podcasts and do live Q&A sessions and have a large back library of useful topics on YouTube that you can watch for free.
Network, network and network some more
Networking has been proven to be a fantastic way to not only raise your profile and company awareness both online and locally in your own region, but it can also prove to be very useful for attracting potential new customers too!
Online networking through sites like LinkedIn is a really effective way to introduce yourself and your products and services to the business community. LinkedIn is a great place to pick up new B2C customers or clients or to attract B2B contacts if you are targeting your products or services to the business community.
You can also do a search for business pages on Facebook and Twitter and choose to follow and interact with them on social media. This is a great way to connect with potential new B2B customers and your prospective new contacts will be eager to check out your Facebook profile, so make sure that your profile is up to date and very professional looking.
Finally – be patient
Rome wasn’t built in a day – and neither was any successful company. Success doesn’t happen overnight so don’t expect instant results from your hard work. It may be some time before you start making a healthy profit, but if you can see that your business is going in the right direction, is picking up speed and becoming recognised, you can be rest assured that you are doing the right thing.