There’s no denying the appeal of being your own boss. Spending every day doing something you love. Choosing a living that suits your lifestyle.

It isn't always easy. But with the right planning and support, we know you can do it. The first step is to understand yourself and your business idea a little better.

Explore the practical, financial and personal considerations

Practical

• Have you got a great idea for a business? How do you know?

• What do you want your dream business to look like and deliver?

• Do you want to stay small or scale up fast?

Financial

• What will your startup costs be and how will you finance them? Can you afford to start a business? Maybe you need a business you can start with no money?

• Do you know how much money you need to make to meet your minimum monthly outgoings? Can you afford to give up your day job yet?

• What sources of business funding are available to you?

Personal

• Thinking of making your hobby into a business? Will you still enjoy it when it is your work?

• Do you have the personal qualities – like drive and determination – to see things through?

• If you have a family, are they onboard with your big dream?

Use market research to test your concept

If you’ve considered your options from all angles, and still think that starting a business is right for you, the next step is market research.

Market research helps you to:

• discover the size of the market for your product

• understand the needs and feelings of your target market / ideal customer

• find out what, where and why they buy

• identify what your competitors offer compared to you

• consider the opportunities and threats in your marketing environment

You can use surveys and focus groups, original and existing research, and good old brain power to work out whether your business has strong potential.

Once you’ve explored your appetite for the entrepreneurial life - and the public’s appetite for what you offer – it’s time to start business planning.

Why write a business plan?

Writing a business plan lays the foundations of future business success. It doesn’t need to be over-complicated but it does need to be done. A business plan is your opportunity to work out the details of your business and make sure you’ve thought about all the ins and outs.

It is extremely beneficial to your business to write one because:

• it helps you pin down the details of your business and prove it’s viable

• funders will expect to see a business plan if you are applying for a business loan

What does a business plan include?

A business plan generally contains the following information:

• Executive summary

• Description of the business

• Market research and sales strategy

• Business structure and staffing

• Description of your operations

• Financial forecast

Download a business plan template

There’s no need to reinvent the wheel. Download a business plan template to help guide you through the business planning process. You’ll need to think through a lot of details, which may take time and additional research.

Do your sums

You might find it relatively easy to describe your business plans and structure. It is the financial forecast that’s going to take the most of your time. It is worth spending time getting this right because, without good potential for profit, you may be barking up the wrong business tree.

Why make a financial plan?

Money makes the world go round. Whilst a fat bank balance isn’t essential for starting a business (as our 35+ businesses you can start with no money prove), you’re more likely to succeed if you get to grips with finance fast.

Unfortunately, cash flow problems can cause startup businesses to go bust within the first 12 months. You're likely to be spending money to get things started, before bringing any money into the business. So it's important to be realistic, honest and upfront about cash flow.

So get ready to unleash your inner accountant and sharpen up your spreadsheet skills, because it is business finance planning time!

Take a look at our guide to getting started with budgets, cash flow and pricing. Then think about how you are going to finance your new business.

How can I finance my new business?

Whilst you can start a business on a shoestring budget, many startups will require a cash injection to get started or to grow. There are lots of business finance options out there – from bootstrapping your business with your own savings, to taking out a start up loan.

If you’re considering business finance, you need to find an option that provides the capital you need and provides affordable repayment options. Some common sources of business finance include:

• Personal investment – putting your own money into your business to help it grow

• Loans – whether from a bank or other provider, loans can boost your business finances - find out what to expect when you apply for a business loan

• Grants and government support – increasingly hard to find but available in some sectors

• Private equity – financial support from an investor, in exchange for a share of your profits or business

• Peer-to-peer lending – borrow money from an investor, or group of investors, via an intermediary

• Crowdfunding – raising money from supporters online - find out more about crowdfunding and what makes a successful crowdfunding campaign

Our Guide to Funding a New Business provides more detail on each of these options.

What is a Start Up Loan?

A Start Up Loan is an unsecured personal loan that you use to start a business. Despite the name, you can apply before your business starts, or at any point in your first two years of trading.

Start Up Loans are provided by the UK Government to make sure you can access funds to get your business off the ground. This fund is managed by specially appointed delivery partners around the country. Find out more in our Guide to Start Up Loans.

Check out our guide if you're wondering if you'll be eligible for a business loan. You can also find out more in our article: Your business loan questions answered

What business structures are there in the UK?

Until you start a business, you may not realise the number of different business structures available and the differences between them.

There are different legal requirements and tax structures depending on which you opt for.

The two main structures that startups need to choose between are sole trader or limited company status.

Most small businesses in the UK are sole traders. If you want to follow in their illustrious footsteps, here's five things to know about setting up as a sole trader.

However, the are also advantages to registering as a limited company instead. Our Guide to UK Business Structures tells you everything you need to know.

Once you’ve decided on the right business structure for you, you need to register your business with the relevant authorities. This enables you to pay tax, National Insurance, and employees (if you have them).

Who do new businesses need to register with in the UK?

• Sole traders: you need to register with HMRC

• Partnerships: as above, you need to register with HMRC

• Limited companies: you need to register with HMRC and Companies House

Our Guide to Company Formats and Business Structures includes information about how to register your business with HMRC. And check out our essential guide to HR for startups to understand about your responsibilities if you do have staff.

What other laws does my business need to comply with?

Your legal requirements don’t end with registering your business. Depending on your business sector you may need to register with other agencies as well. For example, food businesses need to register with their local authority to enable food hygiene inspections to take place.

To protect you, your staff and the public, there are a wide range of legal requirements you need to adhere to. These include but aren’t limited to:

• Health and Safety

• Fire safety

• Compulsory insurances (depending on your operations, such as public liability and employer’s liability insurance)

• Licensing laws (such as alcohol and music)

• Food safety (if applicable)

• Employment law (check out our essential guide to HR for info)

Can I work out my own tax bill?

Yes, many businesses calculate their own tax.

The tax you’ll pay can depend on a number of different factors, like your business structure, personal income, business profits, where you work from and what other sources of income you have.

For limited companies especially, tax can be an extremely complicated topic, so many prefer to hire an accountant to help you work out their liability. Accountants have a detailed understanding of the UK’s tax system and can sometimes pay for themselves with the money they’ll save you.

If you're really keen to DIY, check out our article on calculating the tax for a limited company.

What taxes do businesses have to pay in the UK?

Some of the key taxes that you may be liable for are:

• Income tax – If you’re a sole trader, you pay income tax on your earnings. You have a personal tax-free allowance before you have to start paying (assuming you have no other sources of income)

• Corporation tax – Limited companies pay 19% corporation tax on their profits. There is no personal allowance on corporation tax. It starts from your first pennies of profit! Read more in our article on corporation tax in the UK

• National Insurance – NI is due to HMRC to pay towards certain benefits and the state pension. Your liability depends on your business status and income. If you’re an employer, you’ll need to take this from your employees’ salaries using PAYE

• VAT – If your business earns more than £85,000, you have to charge VAT. Whilst this isn’t a tax on you or your profits, it is money that you need to account for and pass on to HMRC

• Business rates – this is council tax for business premises

What tax returns do businesses have to complete?

Regardless of whether you hire an accountant or do it yourself, you need to keep detailed financial records and fill in the relevant tax returns on an annual basis.

• Sole traders – a self-assessment tax return only

• Partnerships – a self-assessment tax return for each partner, as well as a partnership tax return

• Limited companies – a company tax return, plus full annual accounts

Read our articles on how to complete a self-assessment tax return and how to calculate the tax for a Limited Company.

Most of us hate talking about money. But it’s an embarrassment you need to overcome when you set up a business. From deciding what to charge, to chasing overdue invoices, money makes your business go round.

Sort out your strategy

It’s important to set out your strategy and systems early on: how you manage money in your business can lead to it flourishing…or failing.

• What will you charge?

• How much can you realistically expect to earn in your first year…and future years? Prepare some financial forecasts

• Is your cash flow going to be problem-free or problematic? Cash flow forecasting is essential

• How will you receive and make payments?

• How will you keep on top of your finances?

Set up the right systems and support

• Understand the importance of budgeting, cash flow and pricing

• Get to grips with the three key financial statements – balance sheet, income statements and cash flow statements

• Decide whether you’ll need to hire an accountant, bookkeeper or manage things yourself

• Explore accounting software that can make your life easier

• Get comfortable with selling – if you aren’t making sales, you don’t have a business

Can't decide whether to sell online or from a high street shop? Wondering whether to work from your home office or a rented space? When you choose where to work, make sure it works for you...and your customers.

How do I choose business premises?

If working from home doesn’t appeal to you – or if your business simply can’t be run from home – then you’ll need to find business premises. Your local authority is a great place to begin your search. They can advise on available locations as well as any legal requirements your premises need to meet.

Here are some things you need to consider:

• Overheads – Rent, utilities and business rates can all add up. Try not to overstretch yourself by taking on a premise that is bigger than you need. Shop around for somewhere affordable

• Location – Think about where your customers are likely to be and choose a location that’s right for them. Ideally you need high footfall and easy access for your ideal customer

• Competition – Try to avoid locating your business beside the competition, unless you have a really strong differentiating factor that’ll make you stand out and attract customers

• Legal compliances – Don’t forget your premises need to meet all relevant legal compliances. Your local authority will be able to advise you

Where can I sell my product or services?

Considering the best way to reach your customers can make or break your business. Think about the easiest way for customers to access your products and how you can use place to enhance their experience of your brand.

• Physical premises: high street shop, corner café, cinema or soft play…some businesses need physical premises

• Mobile premises: can you take your trade to your customer with mobile premises? Think dog grooming, cleaners, street food and coffee carts…

• Online shop: maybe you can make sales online and save the expense of a physical shop? Check out our guide to online marketplaces

• Entirely online: some products are sold and experienced entirely online, such as software-as-a-service or online counselling

• In person: face-to-face selling can happen in people’s homes, for example, cosmetics parties

• Distributors/affiliates/franchisees: other people can sell your product in exchange for a share of the profit

Marketing is an essential function of your business. People often use the word ‘marketing’ to mean ‘promotion’ or ‘advertising’. But marketing is so much more. Your marketing efforts actually need to start before you’ve put a single item into production!

Get to grips with the marketing mix

Marketing is the process of understanding customers’ needs and meeting those needs to make a profit. It has the power to make or break your business. So it makes sense to invest time in writing a marketing strategy for your startup.

A helpful way to think about marketing is as a mix. The marketing mix is made up of different elements which, when you combine them, create a competitive advantage for your business. There are lots of variations but traditionally there are four key elements: the 4Ps.

• Product – what you offer, features, benefits, future developments

• Place – where you offer your product or service, where customers experience it

• Price  – how much you charge for a product or service, and how that affects perception of your brand

• Promotion – how and where you spread the word about what you offer, any incentives to encourage purchases

You can see how the 4Ps provide a great framework for thinking about your business and refining your offer to customers. Once you’ve thought things through, it’s time to commit it all to paper.

Write your marketing strategy

Like any strategy, this isn’t nearly as intimidating as it sounds. A marketing strategy is just a roadmap that says where you’re starting from, where you’re going, and how you’ll get there. It includes:

• Your mission and vision statement

• Market research (you might already have done this: bonus!)

• Description of your product and pricing

• Marketing goals and tactics

• Your marketing budget

• How you’ll assess your success

We’ve got a marketing strategy template you can download and use on our website.

Branding is a much-misunderstood part of the marketing process. Whilst it is true that the most recognisable part of a brand is its logo, the brand actually covers a whole lot more.

What is branding?

From your tone of voice and visual style, to the music you play in your shop or the charities you choose to support, brand is the distinctive DNA of your business identity.

Get it right and you’ll find it easier to attract customers and charge higher prices. But it isn’t as easy as it sounds… Much as you might try to shape public perception of your business, it is somewhat out of your hands. To improve your chances, think about how you want to be perceived and who you want to appeal to.

Work out your business brand

The world is your oyster. You're creating a brand new business from scratch. You can be anything you want to be!

• Sophisticated or silly

• Affordable or exclusive

• Family friendly or adults only

• Traditional or cutting edge

• Dependable or disruptive

To start focusing on your branding, think of three words you want to be associated with and think about how you can communicate these through your business activity.

Check out our detailed guide on How to Create a Brand for a step-by-step guide and examples of branding in practice. Why not take our fun Guess the Logo quiz for inspo.

Promote your business

Once you’ve got your brand pinned down, it’s time to think about promoting your business. How are people going to find out about you and what you offer?

Your market research will help at this stage. You’ll have identified your ideal customers and worked out where they research and make purchases. You’ll know what they read, watch and want.

When you’re ready to launch your business, prepare a business launch communications plan to make sure you’ve coordinated things to maximise their impact and create a positive customer experience.

Make the most of social media

Once your business is up-and-running, factor some time for promoting your business each week. Advances in tech mean customers expect regular content and contact with businesses. One way to achieve this is through social media. Perhaps Facebook and Instagram if you're selling directly to customers, or LinkedIn if you're selling to other businesses.

• Keep communication in mind – take photos to share on social media, think about what your customers might like to see or hear from you

• Schedule things to save time - use a social media scheduling programme to post regular content...but don't forget you need to be around to reply to customers if they engage

• Plan and publish regular content – think about content that adds value to your customer; this might be B2B articles that share your expertise and build your brand authority; or fun things in B2C like hair tutorials, drool-worthy cake photos or funny memes

• Don’t forget to measure engagement – this will help you work out the most effective options for your business; if people aren't engaging, you need to think about why

Take a look at our article on how to plan a social media calendar for your small business.

And there you have it...

And there you have it... Our ultimate ten-step guide to planning and starting your business. Not everything has to be done in this order. But if you make sure you cover all of these bases, you’ll be on track to take on the challenge of successfully starting a business.

Our top takeaway is to read widely and research thoroughly before you start your business. Armed with the right knowledge and realistic expectations, you should be able to judge whether starting a business is right for you.