Almost 90% of all UK shoppers use Amazon, and as a result, Amazon is now the 5th largest retailer in the UK. This makes Amazon a popular choice for sole traders and limited companies as it provides enhanced exposure and access to millions of potential customers online.

This guide will cover the basics of starting an Amazon business in the UK, from choosing your products to registering your company. We’ll also give you some tips for growing your Amazon business. Let’s get started.

What is an Amazon business?

Amazon is a popular platform for both sellers and shoppers. The simplicity of setting up on Amazon has persuaded millions of people who would have never considered going into business to start for themselves.

Others run a business via Amazon as a second source of income from their own brand’s online store. All you need to do to start selling on Amazon is register a seller account.

The benefits of an Amazon seller account

Amazon sellers enjoy many great benefits, so it’s a good choice if you’re looking to start an online business venture. For one, having an Amazon seller account gives you access to a ready-made customer base of millions of people who use Amazon daily.

In addition, as an Amazon seller, you’ll benefit from the company’s world-class marketing and distribution infrastructure, which can help you reach a wide audience quickly and efficiently.

Finally, Amazon seller accounts come with Amazon Seller Central, which includes several helpful tools and resources that can make it easier to run your business. This includes customer support, order management and reporting features.

If you are serious about starting an online business, an Amazon seller account is a great option to consider.

Starting an Amazon business in 6 steps

Step 1: Choose the Products You Want to Sell on Amazon

When you’re ready to start selling on Amazon, the first step is to choose the products you want to sell. There are a few things to keep in mind as you make your selection.

First, consider the demand for the product. If there are already a lot of other sellers offering the same thing, you’ll need to stand out from the competition.

Second, think about the cost of the product. You’ll need to be able to price your items competitively while still making a profit. It’s important to remember that Amazon takes a commission on each sale, so you’ll need to consider this when you price your products. If you price too low, you won’t make a profit. Go too high, and your customers might find a different seller.

Finally, make sure you have a reliable source for the product. You don’t want to run into stock shortages or quality control issues. Research your suppliers carefully to compare prices and look at reviews to check their reliability.

Product you can sell on Amazon

You can sell almost anything on Amazon, from books and electronics to clothing and furniture. If you’re looking for a product to sell, you must consider both the demand for the item and the competition you’ll face from other sellers. Make sure you conduct product research before you start making or ordering any products to sell.

To help you get started, here are just some of the product categories that you can sell on Amazon:

• Home and kitchen
• Toys and games
• Electronics
• Clothing, shoes and jewellery
• Books
• Arts and crafts
• Beauty and personal care.

Prohibited and restricted products on Amazon

While you can sell almost anything on Amazon, there are some prohibited and restricted items. Although you might not plan to sell these products, it’s good to know of any restricted products before starting your Amazon business. The products include:

• Weapons
• Fireworks
• Medicines
• Tobacco products
• Any product that contains prohibited ingredients
• Any products that cannot be lawfully shipped in the UK.

Before starting your Amazon business, take the time to look into any restrictions on the type of product you plan to sell. Some require approval from Amazon, while others are banned entirely.

Step 2: Create a business plan

Before you set up your Amazon business, you must do your research. The vast number of sellers on Amazon means that the platform is highly competitive. You should consider the areas below when coming up with your business plan:

Identify your usp

To sell on Amazon, you need to find a profitable niche. To have a profitable business, you need to research and identify market trends and competitive products that align with your passion and interests. Try to find a compelling selling point or create a new trendy one to make it viral on the market. We strongly suggest you do not involve seasonal or fragile products as these can easily result in negative reviews.

Start market research

Before launching your business and deciding on a niche, you must take some time to do thorough market research. Look at what potential competitors are doing and think about how you can make your offering stand out from the crowd.

It’s often difficult for smaller businesses to compete on price (unless you’ve secured yourself an excellent supplier), so think about how you can demonstrate the superior qualities of your offering.

Identify funding

You also need to consider whether you need any funding to achieve your goal of starting an Amazon business. You may have associated costs with setting up, such as purchasing products, advertising and organising logistics.

There are a few options available for funding your Amazon business:

• Friends and family investments
• Bank business loan
• Crowdfunding.

Find product suppliers

When you have decided on what products to sell, you’ll need to find your product supplier. You can find suppliers on Alibaba and other B2B platforms like AliExpress. You’ll probably find a few potential suppliers. Get their contact and additional background information if possible, and take your time comparing them.

If possible, it’s a good idea to check the quality yourself. If this isn’t feasible, you can outsource this task to a professional quality inspector. Remember to order samples so that you can assess the product quality.

Putting together your business plan

Once you’ve done your research, it’s time to put a business plan together. Creating a business plan might seem daunting, but it’s easier than you think. A business plan is simply a document that shows how you plan to succeed. In your business plan, you’ll need to include:

• Marketing strategies
• Competitor research
• Services or products
• Finances
• Operational details.

Remember, your business plan is a living document, and you should regularly update it if your business changes. If you’d like to learn more, check out our expert guide to putting your business plan together.

Step 3: Set up your Amazon business account

Once you have a clear business plan and products to sell, you can set up your Amazon account.

If you don’t have an Amazon seller account already, you’ll need to register as an Amazon seller. There are two types of accounts available:

• Individual seller — This costs nothing per month, but you will be charged a seller’s commission fee for each item you sell on Amazon.
• Pro seller — This includes more features but charges a monthly subscription.

You can choose the account type based on your business budget.

To cope with the sellers’ rising demands, Amazon has rolled out its “Fulfilment by Amazon” (FBA) service. This service means Amazon will store your products in the Amazon inventory, fulfil your orders and offer customer service.

Thanks to FBA, sellers can leverage the platform’s robust distribution network and customer base to make their business dream come true. For retailers, it’s the most popular choice of platform.

Using the Amazon FBA service is relatively simple. Just create an Amazon seller account and add FBA. It’s essential to set your business up in compliance with the guidelines on the website, but setting up an Amazon FBA business is easy.

How to set up your Amazon seller account

Setting up your Amazon seller account is straightforward and won’t take long. Here’s what you need to do:

1. Go to https://services.amazon.com
2. Go to the “Pricing” tab and select “Compare Selling Plans”
3. Choose your selling plan
4. Enter your email address and hit “Create a New Account”
5. Enter your “Business Type” and “Business Location”
6. Enter your personal information
7. Enter your billing information
8. Verify your identity and address.

Once you’ve completed those steps, your Amazon seller account is good to go.

Step 4: Creating your product listings

Once your seller account is set up, you’ll need to create product listings to add your items to the platform. Include clear and high-resolution images to make your product listing appealing, ensure your products are “Prime eligible”, and enjoy the free shipping options for prime members.

If you don’t have many items, you can list them manually. However, If you have a lot of products, we recommend uploading a spreadsheet with all the relevant information. As soon as your products are listed, they’ll be available for customers to purchase, and your business can start making revenue.

What to include in an Amazon product listing

If you want to boost sales on Amazon, you’ll need to ensure that your product listings appear in search results.

If you’re selling a product on Amazon, one of the most important things you can do is write a good product listing. Your listing will convince people to buy your product, so it’s crucial to include all the relevant information and make it as engaging as possible. Here are some things to keep in mind when writing your product listing:

• Include a clear and concise description of the product.
• Use high-quality images that show off the product in its best light.
• Be sure to list all the critical features of the product.
• Use bullet points and other formatting techniques to make the listing easy to read.

By following these tips, you can create an Amazon product listing to boost your sales and succeed on the platform.

Step 5: Register your Amazon business as a company

Setting up an Amazon business in the UK is the same as starting any other company. If you make more than £1,000 a year on Amazon, you’ll need to register a self-employed business and pay taxes depending on your income.

Every country has different rules and regulations regarding the taxes you must pay on income made from an eCommerce enterprise, so please consult an accountant in your country of residence.

When you are ready to start your Amazon business in the UK, you need to register with HMRC. If you plan to make selling online a large enterprise, you might consider forming a limited company. This will prevent cost risks from falling on you if the business fails. You can go the sole-trader route if it’s more of a side hustle.

Whichever business model you choose, deciding and completing your company formation is crucial to your business success. We can help you get set up fast and easily.

Step 6: Start selling products on Amazon

With your Amazon seller account set up, product listings live and your business registered, you might think you can sit back and relax. But this is the point where the hard work really starts.

While Amazon gives you access to a huge existing audience, there’s a lot of competition from other sellers. You’ll need to do everything possible to stand out in search results. There are three main ways to do this:

Marketing your Amazon business

Marketing your Amazon business doesn’t have to be complicated or expensive. In fact, there are several simple, effective ways to get the word out about your products and attract new customers. One of the most effective tools is Amazon’s pay-per-click advertising program, which allows you to place ads on Amazon’s website and only pay when someone clicks on your ad.

You can also use Amazon’s search engine optimisation (SEO) features to ensure your products appear high in the search results when customers are looking for products like yours.

Additionally, participating in Amazon’s affiliate program can help you generate sales and grow your business. You can earn a commission on each sale you generate by promoting Amazon products on your website, blog and social media channels.

Branding your Amazon business

White labelling is a great option to set your business apart from the competition. Many manufacturers offer to brand their products with your logo or label, and some will even brand the packaging for you.

This is an excellent way to make your products more recognisable and distinguishable from others on the market. Plus, it’s often affordable, so it’s worth considering if you want to give your business that extra edge.

Sourcing reviews

As an Amazon seller, you’ll already know that reviews are essential as a customer trust signal. They provide social proof that your product is worth buying and help improve your ranking in search results.

Customers are more likely to buy from a seller with a high rating, even if the price is slightly higher. So if you’re looking to boost your sales on Amazon, focus on getting more reviews. It’s an investment that will pay off in the long run.

Other options for starting your online business

Becoming an Amazon seller isn’t your only option if you want to start selling online. Depending on the products you sell, marketplaces may exist with a more suitable audience.

For example, Etsy might be better if you sell handcrafted goods. At Mint Formations, we help thousands of people start their own businesses every year. If you’re looking to start yours today, check out our guides to starting different types of online businesses:

• How to Start an eCommerce Business
• Starting an online business
• Starting an eBay business
• Starting an Etsy shop
• Starting an affiliate marketing business

Are you ready to start an Amazon business? We’ll secure your business name and get your company registered fast so that you can start doing what you love – compare our company formation packages we offer. If you have any questions about starting a business, get in touch with the Mint Formations team.

The post How to start an Amazon business appeared first on Mint Formations Blog.

Starting your own tour operating business is not easy, but there are plenty of benefits. As with all businesses, there are plenty of aspects that need to come together to ensure success — and it is sometimes difficult to know where to begin. Owning a tour company takes hard work, passion and dedication, but the rewards are worth it.

Wondering how to start a tour guide business? Find out what skills you need, the different paths you can take, important considerations to keep in mind and how to legally establish your business.

Let’s dive in.

What is a tour guide?

Tour guides show groups around attractions such as historical points of interest and areas of natural beauty while giving them the relevant history and information needed to make their visit the best it can be. Tour guides have a range of skills and jobs to do, from acting as an interpreter to chauffeuring groups of tourists on day trips, walking tours and even overnight stays to remote destinations.

What qualifications do you need to be a tour guide?

Though no professional qualifications are required to start a tour company, there is a range of vital skills that are important for anyone looking to set up a tour business:

• The ability to handle uncertainty
• Good at handling pressure
• Awareness of current and new trends

There are also other aspects of the tour business that you should be familiar with as an entrepreneur. These include a knowledge of local cultural information, transportation and accommodation, as well as places of interest, the current political situation and more. You should also be familiar with visa and immigration regulations and procedures,

How to gain experience as a tour guide

How to start

When starting as a tour guide, it might be good to get experience working as a guide for a park or museum. These jobs can give you experience handling large groups, developing leadership skills and confidence as a guide.

Many organisations and societies often employ and train guides, while tour companies, parks and travel agencies often need additional guides during the peak summer months. If you are interested, apply directly to the managing directors and directors of personnel and see if you can gain experience for one of these groups.

How to advance

With more experience and knowledge, some workers may prefer to specialise in multiple destinations or specific countries. They may want to open a travel agency of their own or sell trip packages while working for wholesale tour companies.

This type of work can often lead to other lines of work, such as travel writing. Or, you could move into the corporate world and plan holidays and travel arrangements for corporate executives. The global economy has meant that many more jobs are available for people who know about foreign cultures and languages.

How to start a tour guide business

1. Find your niche

The first step you need to take in starting your tour guide business is clearly defining your proposition. Ask yourself: why would guests book through my company? Today’s travellers are not just looking for traditional tours but “experiences”. There is a huge demand for authentic activities, which means that locals can make the most of the demand. From yoga sessions to themed food nights, there is no end to the wonderful experiences you can offer travellers. All you need is to understand your target market.

2. Come up with a business plan

A good business plan will make it easier to present to investors and also help you progress. As well as a company summary and mission statement, your plan should contain a target market description, financial projections, the service or product offerings and an executive summary.

3. Set your prices

It is difficult to get the pricing right, but it is vital to do so since your revenue will be dependent on your pricing. How much the customer sees the tour as worth and what sort of customers wish to use you are important. Never underprice because you have just started your business since you need to make a reasonable profit to develop and give even better service.

Good value for your customers is tightly linked to a higher price. You may develop a range of prices to suit the demands of varying customers who would like different sorts of experiences. You do need, however, to be aware of competitor pricing to ascertain pricing averages.

4. Be insured

Being insured is an absolute necessity. You need public liability insurance and the ABTA bond. If you include flights with your bookings, you must also have the Air Travel Organisers’ Licensing (ATOL) licence. Professional indemnity and product liability are also worth thinking about, depending on the type of tour you arrange. For more information, AITO may be of help. You must also comply with the consumer protection and liabilities listed in the 1992 package travel regulations.

5. Marketing

One of the main things that lead to the success of a business is good marketing. You can market your business in numerous ways, such as creating a website crammed with beautiful tour photographs of tempting destinations. You may even think about writing your very own blog. Don’t forget to get happy customers to leave you their reviews and remember social media can be your friend when you make connections with tourist boards and travel writers. Even travel influencers may be happy and willing to help promote your business.

Ready to form your tour guide company?

If you are ready to start a tour guide business, you need to create your company. You can form a limited company or go the sole-trader route. Deciding and completing your company formation can be the most challenging part of starting a business, but it’s crucial to your success.

The post How to start a tour guide business appeared first on Mint Formations Blog.

There are 168,000 registered charities in the UK, but despite this, setting up a non-profit organisation is not for the faint-hearted. Not only is it a heavily regulated area but it’s also competitive. Find out what actions you need to take, the important considerations you need to bear in mind and how to legally establish your non-profit business.

What is a non-profit business?

Non-profit organisations are not driven by profit but by dedication to a given cause, which is the target of all income beyond what it takes to run the organisation. Essentially, a non-profit company works just like a regular business. Money comes in, money goes out, employees are paid and day-to-day operations are carried out. However, unlike a conventional business, a non-profit company’s main aim isn’t to make lots of money.

Not all businesses are suitable to be set up as a non-profit organisation. Non-profits are often used for trusts, cooperatives, advocacy, charity, environmental and religious groups. Before embarking on the set-up of your business, you need to know what the motive of your business is, where will the revenue of your business come from and how you will structure your organisation.

Conduct your research

The first step in starting your non-profit business is to do thorough research to help form the basis of your business plan.

Define your mission

One of the hardest parts of starting a new charity is getting funding. To do this you need to convince funders and individuals that you are different and that the mission of your non-profit business is worth supporting. Funders are overwhelmed by funding applications and individuals are constantly bombarded by requests for money. How will you stand out? We recommend considering targeting geographical and demographic niches when defining your mission. This will give your non-profit the best chance of attracting attention.

Understand your audience

Understanding your audience is easier if you have a distinctive mission. Having a very broad audience is a good indicator that you haven’t defined a distinctive mission.

It is a common misconception that a broad audience makes it easier for you to attract people to your new cause. Many people are understandably reluctant to exclude anyone from engaging with their exciting new project. But the reality is the opposite. The broader you define your mission and the wider you cast your net for supporters, the less likely you are to succeed — since you will not stand out from other options. If you define your mission narrowly and derive from that mission a narrow audience, your communications are likely to be much more effective.

Find an appropriate name

When choosing a name for your non-profit organisation, you should consider these aspects:

• It should be relatively easy to say over the phone and easy to spell.
• If it is descriptive of your mission, then opt for something general rather than specific. While it’s crucial to have a clearly defined distinctive mission, this may legitimately change over time and you may not want to change your name as a result.
• Avoid long names that are likely to get shortened to meaningless or unfriendly acronyms.
• Take lessons from the business world where many successful companies have abstract names that, as they succeed, gather their own significance.

Choose a legal structure

To set up a new charity, you must decide what sort of legal structure it will have. The type of structure you choose affects how your charity will operate. For example, who will run it and whether it will have a wider membership, whether it can enter into contracts or employ staff in its own name, and whether the trustees will be personally liable for what the charity does.

There are four main types of charity structure:

• charitable incorporated organisation (CIO)
• charitable company (limited by guarantee)
• unincorporated association
• trust

You need to choose the right structure for your charity, depending on whether you need it to have a corporate structure and whether you want to have a wider membership.

How to start a non-profit business

Once you have completed all your research and formed a business plan, you can start the practical steps to setting up your non-profit company. These steps include:

• Form your team — decide who will work in the charity with you
• Start building a list of interested people — they will be the audience for your initial funding and communications
• Get a website and start communications — write about what you do and share it by email and through social media. At this stage, don’t agonise over social media and choose a small number of marketing channels
• Register with the Charity Commission — you don’t have to register until you have an annual income of £5,000. You may also wish to consider working as a social enterprise

Ready to form your non-profit business?

Once the research and business plan is created, it’s time to form your company legally. This can be the hardest part of starting a non-profit business, but it’s crucial to your success. Using the services of Mint Formations to register your non-profit company can take away all the stress that comes from the legalities of starting a business. We’ll secure your business name and get your charity registered fast so that you can start doing what you love.

Are you ready to start a non-profit business? Register a charitable company online with our professional service.

The post How to start a non-profit business appeared first on Mint Formations Blog.

Whether you’re looking to start a dropshipping venture or are wondering how it all works, we’ve got you covered. Keep reading to learn about a dropshipping business, the key benefits and how to find a reliable supplier.

What is dropshipping?

Dropshipping is a retail fulfilment method where you list products on your site or storefront but don’t actually have them in your possession. You act as a middleman between the buyer and the supplier, avoiding the complexities of finding storage space and staying on top of inventory management.

How does dropshipping work?

It’s a relatively straightforward process; probably why it’s such a popular small business to set up. This is how dropshipping works:

1. The customer makes a purchase
2. You process the order and transfer it to a third-party supplier (wholesaler or manufacturer)
3. Third-party supplier prepares and ships the order on your behalf
4. The customer receives their order.

Generally, you’ll only pay for the item from the supplier once it’s been purchased by the buyer, giving you little overhead. Additionally, since you don’t own the inventory, you don’t need to store it or handle the shipping responsibilities, which have considerable costs.

Benefits of dropshipping

From low costs overall to excellent scalability prospects, there are numerous benefits to the dropshipping model. Here are some top perks to bear in mind:

Low start-up costs

You can start an online store with little investment money, unlike a physical shop where you will spend thousands on inventory before you even begin trading. In most cases, you’ll only be required to buy the product once the sale is in hand, so there’s much less risk involved.

Easy to run

One of the key perks of dropshipping is ease. Since you don’t have physical products in hand, you won’t need to manage inventory, pack and ship orders, process returns or manage stock orders. Likely, you will manage customer service but the rest falls on the shoulders of your supplier.

Low overhead

The ongoing costs of running your business stay relatively low as there isn’t a need to keep inventories stocked or rent warehouse space to store products. You’ll need to pay for marketing and upkeep costs of your online store, but fees are minimal compared to the alternatives.

Flexible working location

Most dropshipping businesses are run from home, allowing you to run your company from anywhere in the world. All you’ll need is a laptop and internet connection to communicate with suppliers and offer speedy customer service.

Multi-channel selling opportunities

With dropshipping, you can take advantage of various platforms. You can set up a domain to sell from there and open a storefront on places like Amazon and Etsy. Selling on multiple channels will offer your business more visibility and further sales opportunities.

Highly scalable

There are fantastic opportunities for scalability as you can grow your business and accept more orders without ever needing to increase your warehouse space, packaging requirements or shipping operations.

Flexibility

Dropshipping offers the possibility to sell certain products with little risk. You won’t need to invest lots of money into goods you’re unsure will sell. Instead, you can carry out a trial period; if they don’t sell, there’s little loss to you.

Limitations of dropshipping

Dropshipping may sound like a get-rich-quick scheme, but it’s not easy money. Here are some drawbacks you should consider before getting started:

Highly competitive

The low start-up fees and lack of investment are certainly benefits, but this also makes it a highly competitive market. If you’re selling a more generic product, be prepared for a lot of competition. More established businesses will have better deals with suppliers, which allows them to undercut you on prices you simply can’t match.

Low profit margins

Your overhead may be low, but the returns are too. With less money coming in, there’s less money going out, and you’ll need to do a lot of business to stay afloat. When you make a sale, be aware that most of the profit will go to the supplier. Experts suggest that an absolute maximum profit margin of 15 -20% is achievable with dropshipping.

Limited control

While not having to deal with inventory may sound like a perk, it can come with a downside too. You can’t guarantee the quality if you don’t encounter the product regularly. Additionally, you won’t have any control over the fulfilment timeline as it’s up to your suppliers to select, pack and ship.

Be aware that you’ll still need to deal with customer service and handle any repercussions that come with mediocre products or long shipping times.

Hard to stand out

If you want to make a brand, you should know that it’s becoming increasingly difficult to stand out with the dropshipping method. Your products won’t be unique or distinguishable from other sellers, so it’s challenging for customers to differentiate and have a reason to buy from you instead.

How to start dropshipping

Even though it has become more difficult to be successful with dropshipping, it’s certainly not impossible. Here are our top tips to get you started on the right foot with dropshipping:

• Find a niche: Instead of choosing a wide range of generic products, find a few specific ones from an industry you know. Position yourself as an expert in a speciality area and build your brand from here. This will set you apart from competitors and provide you with a target audience to market to.
• Do market research: Take time to familiarise yourself with the search landscape of the products you’re hoping to sell. Is there a lot of competition? This may indicate a saturated market. Are there lots of brands present? Be aware that bigger companies can sell for much lower prices.
• Find a quality supplier: This is the most important thing to consider with dropshipping. Your chosen supplier should have a good reputation in the industry, and there should be many positive reviews to reflect this.
• Build your store(s): Find out where your target audience is and choose a selling platform to reflect this. Or maybe you could benefit from two stores. Are most similar products sold on Amazon or through the business’s website?
• Spend time on a marketing plan: Think about how you will get your products in front of your customers. Build a thorough marketing plan that includes a mix of paid ads, social and organic.
• Measure and optimise results: Be prepared to evolve and adapt your sales approach. Monitor your conversions and overall traffic to your site or store and analyse what’s working. Don’t be afraid to change products that aren’t selling and try new angles.

How do I find a good supplier?

There are two main pipelines to finding a dropshipping supplier. You can use a supplier database and find a wholesaler or an app to connect you to suppliers. Shopify has its own called Dsers — you can browse through products and order directly through Shopify, offering you a bit of peace of mind.

Tips for choosing a dropshipping supplier

The quality of your supplier is the be-all and end-all in the world of dropshipping. As you won’t be hands-on with the product, you must choose a trustworthy supplier to ensure your customers get the best possible product and reduce the negative splashback on your business.

When carrying out your search, keep the following checklist in mind:

• Does it have a policy for returns or damaged goods?
• Are timeframes for order fulfilment reasonable?
• Does it have customer support?
• Are orders insured?
• Does it have fraud protection?
• Does it have reviews? If yes, how positive are they?

If they have in-house customer support, try it out yourself and see how quick response times are and how they deal with their customers.

As a new business, it’s a good idea to stick to more well-known suppliers with good reviews to help get your dropshipping venture off to a good start. A lousy supplier means a bad customer experience, and if you quickly rack up negative reviews from the offset, it may mean that your business fails before it even gets off the ground.

Ready to launch your new dropshipping business? Register your company with Mint Formations today. If you have any questions about starting your new venture, get in touch, and our friendly team will be happy to help.

The post What is dropshipping? A guide to starting a successful online business appeared first on Mint Formations Blog.

But SME is one of those acronyms you often hear and might not know what it stands for. And even if you know its definition, it can be tricky to determine what constitutes a small and medium-sized enterprise or why they’re important.

Luckily we’re here to help. We’ve compiled everything you need to know about small and medium-sized enterprises, from unpacking the meaning of SMEs and their importance to the UK economy to a step-by-step guide to starting your own UK business. Plus, we’ve thrown in some tips and resources for good measure.

Ready to become an SME expert?

What is an SME?

SMEs are small and medium-sized enterprises that exist across many sectors. It’s an umbrella term that covers a wide range of businesses that differ fairly vastly in scale. An SME can be a single-person business up to companies that employ hundreds of staff.

SMEs are sometimes referred to as SMBs (Small and Medium-sized Businesses), but the preferred and more commonly used acronym is SME.

There are a couple of official definitions from different governing bodies and legislatures in the UK. The good news is that the definitions are pretty straightforward.

UK and EU official definition of an SME

The UK and EU SME definitions are broadly the same and only differ in the number of paid employees an SME can have (EU 250, UK 500). Beyond that, both bodies break SMEs down into three categories: micro-businesses, small businesses and medium businesses:

*The UK still uses euros to determine turnover.

Companies House act 2006 definition of an SME

While the EU/UK SME definition is generally accepted, it differs from the Companies House Act 2006. Knowing and understanding both definitions is important as your business definition dictates how you file your annual accounts with Companies House.

The 2006 act breaks SMEs down similarly to the EU definition: micro entity, small company and medium-sized company. Here are the parameters for the different types of businesses:

Why are small and medium-sized enterprises important?

SMEs are always in the news. Almost every day, there are stories about the number of SMEs starting or receiving funding. So why is there so much focus on SMEs? 

The simple answer is that they are integral to the UK’s financial fabric and economic development. SMEs account for 99% of the nation’s business population and are key economic growth drivers. 

Here are just some of the ways that SMEs drive the economy:

• Employment generation — SMEs create diverse job opportunities across various sectors.
• Spur innovation — SMEs often introduce novel products, services and business models.
• Regional development — Small and medium-sized businesses are often local businesses and contribute to local growth

The importance of SMEs goes beyond just their economic distribution. They are also crucial for boosting the variety of the UK’s business landscape and encouraging competition.

Examples of UK small and medium-sized businesses

Given the UK’s diversity and number of SMEs, it can be tricky to picture what an SME is. SMEs operate in various sectors, from tech and manufacturing to hospitality and retail. To illustrate, here are a couple of examples:

• Brewdog — Brewdog is a craft beer company that began as a small enterprise in Ellon, Scotland. With its unique and flavourful beer, Brewdog has transformed into a global brand and completely changed the UK beer market. Brewdog is a fantastic example of an SME that scaled quickly and competes with larger businesses.
• The Cambridge satchel company — This company was founded by Julie Dean and her mother, Freda Thomas, at their kitchen table with a tiny budget of £600. The company’s handcrafted leather satchels became a sensation with celebrities and influencers among their customers. It’s a brilliant example of the power of digital marketing and e-commerce for SMEs.

These are just two examples of the 5.5 million SMEs in the UK. They both show the massive potential for small and medium-sized businesses to break boundaries and succeed.

How to start a small or medium-sized business in 5 steps

Now that you’re up to speed with everything you need to know about SMEs, you might wonder how to start one. The good news is that starting an SME is no different to starting any other business. Most people who register a company are starting an SME even if they don’t realise it.

Starting your own small business is an exciting journey. You’ll find new opportunities and face challenges along the way, but it’s an incredibly rewarding experience. Here are the five key steps to starting an SME in the UK:

Step 1: Develop your business idea

Every business venture starts with a spark of an idea. It could be something you’ve been thinking about for a while or something that’s recently sprung to mind. Your business idea will form the backbone of your business, so it should address a need or gap in the market.

If you want to start an SME but don’t have an idea yet (or you’ve got loads), think about your passions and strengths. What makes you tick? Starting your own small business is exciting but not without its challenges, so passion is crucial. Think about how you can translate something you’re passionate about into a thriving business.

Once you’ve got your business idea, you need to ensure it’s a good one. Research your market and look at market trends to validate and gauge your idea’s potential.

Learn more about what makes a brilliant business idea.

Step 2: Create a business plan

Once you’ve got a solid business idea, you must start developing it and strategising for success. There are so many businesses that have an amazing concept but still fail, and often, it comes down to a lack of planning.

Unsurprisingly, this is where a business plan comes in. A well-constructed business plan is a blueprint for your success. It will cover the following:

• Your business concept
• Market analysis
• Organisational structure
• Marketing and sales strategies
• Financial projections.

Your business plan will serve as a roadmap for success. It will guide your business’s growth and help you to navigate potential challenges. It also comes in pretty handy if you’re looking to attract potential investors.

Discover how to put together the perfect business plan.

Step 3: Choose your business structure

Picking the right business structure is a vital decision that will impact how you run your business. The structure of your business will affect the following:

• Your tax obligations
• Personal liability
• Regulatory requirements.

There are lots of different business structures in the UK, but there are three primary structures:

• Sole traders — As a sole trader, you’ll have complete control of your business, but you’ll have total personal liability for any business debts.
• Partnerships — Partnerships give you the chance to start a business with someone else and share the responsibilities and rewards
• Limited companies — A limited company is a separate legal entity which provides you with legal protection against personal liability.

Each structure has its pros and cons, so it’s crucial to research each and determine which one aligns with your business goals.

Learn more about UK business structures.

Step 4: Register your company

Once you’ve picked your business structure, you must register your company. This registration process varies depending on your chosen structure, but generally, it involves registering with either Companies House or HMRC (or both).

For example, if you’re setting up a limited company, you’ll need to register your company with Companies House. This is a relatively straightforward process, and you’ll need to provide the following:

• Your company name
• Business address
• Details of directors and shareholders (this can just be you).

Once you’ve registered your company, you’ll need to personally register for Self-Assessment Tax returns.

Learn more about registering a company in the UK.

Step 5: Build your business

With a solid plan in place and the official paperwork all sorted, you’re now ready to start building your business. This is where the fun and the hard work begin. It involves a lot of activities, from building a strong team and developing a brand identity to implementing your marketing strategy and developing new products.

You’ll undoubtedly face challenges as you grow your business, but if your business idea is good and your plan is thought out, you’ll be well placed to face them head-on.

Tips and support for running your SME

Few experiences compare to being a business owner and running your own SME, but it can sometimes be challenging. There’s no way to prepare for absolutely everything, but there are some things you can do:

• Keep learning — The business world is ever-changing, so stay ahead by learning about industry trends and developing your skills. You can do this by attending workshops, reading industry publications and networking.
• Build a strong team — Initially, your team will be small, but as you grow, they’ll become your biggest asset. Hiring the right people, helping them to grow and developing a positive work culture can be a massive boost for your business.
• Seek support — When you’re running a business, it’s easy to feel like it’s you against the world. But it’s not. Don’t be afraid to seek help when you need it. There are tonnes of resources and support available for SMEs. Whether it’s advice on managing your finances, help navigating regulations or assistance securing finance, a huge amount of support is available.

Start your SME today with Mint Formations

Starting an SME is an exciting adventure, and here at Mint Formations, we can’t wait to help you get started. Alongside helpful guides like this one, we provide a huge range of business services perfect for SMEs, from VAT registration to virtual office addresses.

But our main focus is helping business owners register their companies. Registering with Companies House can be complicated if you’ve never done it before. 

Our company formation services make it simple. 

From just £12.99, we can register your company correctly and ensure you start your SME journey the right way.

Explore our company formation packages today and take the first step to starting your SME. If you have any questions along the way, feel free to get in touch with us. We’re always happy to help. 

The post What is an SME? Everything you need to know before starting a UK business appeared first on Mint Formations Blog.

Choosing the right business structure is an important decision for any business owner. The implications can be far-reaching, affecting everything from liability to taxation. Choosing the wrong business structure can result in legal issues, limited investment opportunities and higher taxes, so picking the right one is vital. 

This guide will help you understand the different business structures in the UK. We’ll go into detail about the pros and cons of each structure, so you can make an informed decision about what’s right for your business. Plus, we’ll give you some tips on how to register your business in the UK. So, whether you’re just starting out or looking to switch structures, this guide has everything you need.

Jump to what you’re looking for:

• An Overview of UK Business Structures
• Sole Traders
• Partnerships
• Limited Liability Partnerships
• Private Limited Company
• Public Limited Company
• How to Choose the Right Business Structure for Your Business
• Start Your Business with Mint Formations Today.

An overview of UK business structures

When you start a business in the United Kingdom, you have several options for business structures. The most common structures are:

• Sole proprietorships
• Partnerships
• Limited companies.

According to the latest figures from the UK Government, there are currently around 5.5 million private sector businesses in the United Kingdom. Of those, 3.2 million are sole traders, two million are active companies, and 384,000 are partnerships.

Alongside these structures, there are less common structures in the UK, such as unlimited companies and social enterprises, predominantly used by charities and non-profit organisations. Each type of business has its own legal and tax rules, so it’s important to choose the right structure for your business.

Sole trader or sole proprietorship

In the United Kingdom, a sole trader or sole proprietorship is a business owner who is not legally considered a separate entity from their business. This type of business structure is the simplest and most common way to start a business in the UK.

As a sole trader, you’re self-employed and responsible for all aspects of your business, including its debts and liabilities. The main advantage of being a sole trader is that you have complete control over your business. However, this also means you are personally liable for any losses incurred by your business. 

Another downside is that it can be challenging to raise capital, as potential investors may be reluctant to invest in a business with such high personal risk.

If you decide to become a sole trader in the UK, you must register with HMRC and keep accurate financial records. You must also file a self-assessment tax return annually to pay income tax and national insurance. 

While being a sole trader may not be suitable for everyone, it can be an excellent way to start your own business with relatively low startup costs and red tape.

Sole trader responsibilities

There are a few key things to remember if you’re operating as a sole trader in the UK:

• You’ll need to register with HMRC and file a self-assessment tax return each year. This is relatively straightforward — you can do it online or through the post.
• You need to keep accurate records of your income and expenses, which will make it easier to complete your tax return accurately.
• You need to pay any taxes that are due on time.

You may be liable for interest and penalties if you don’t meet your responsibilities as a sole trader. If you have any questions, HMRC’s website is a good place to start. They have a lot of helpful information and resources available. 

Alternatively, check out our blog, where there are resources on all aspects of being a sole trader, and our team are always happy to help.

How to register as a sole trader

In the UK, anyone who wants to start their own business as a sole trader can do so by registering with HMRC. This can be done online, by phone or by post. The first step is to provide HMRC with some basic personal information, such as your name, address and date of birth.

Once you have completed the registration process, you will be issued a Unique Taxpayer Reference (UTR). This will be used on all correspondence with HMRC regarding your tax affairs.

Registering as a sole trader is relatively straightforward and only takes a few minutes. HMRC provides clear and concise guidance on its website, and plenty of helpful information is available from other sources. 

One of the quickest ways to register as a sole trader is to use a company formation agent who will take care of the registration for you. So if you’re thinking of starting your own business in the simplest way, register as a sole trader today.

Register as a sole trader today.

Business partnership

Business partnerships are a popular way to set up and run a business in the UK. In a partnership, two or more people come together to share the risks and rewards of running a business. Business partnerships can take many different forms, from large companies with hundreds of partners to small firms with just a couple.

In many ways, being in a partnership is similar to being a sole trader, as you are personally responsible for the business’s debts and expenses. The big difference is that you share that responsibility.

The key advantage of a partnership is that it allows businesses to pool resources and expertise. This can help them access new markets, finance new products and tap into new pools of customers.

However, partnerships can also be complex and difficult to manage, especially if they involve different types of partners with different interests. For this reason, it’s crucial that partners clearly understand their roles and responsibilities before entering into a partnership agreement.

Business partnership responsibilities

If you’re a partner in a business partnership, you will need to:

• Register with HMRC and file an annual self-assessment tax return. Each partner pays tax individually and is responsible for their own self-assessment tax return and paying income tax.
• Pay any taxes that are due on time.
• Complete a Partnership Return, showing each partner’s share of profits and losses
• Keep accurate profit and loss records.

It’s important to ensure you meet your responsibilities as a partner. Failure to do so can result in fines from HMRC.

How to register a business partnership

Before you can register a business partnership in the UK, there are some important things you need to do. First, you need to choose a business name and ensure it’s available to use. You can do this by searching the Companies House website or our company name checker.

Once you’ve chosen your business name, you’ll need to choose a “nominated partner”. A nominated partner is responsible for maintaining company records and ensuring tax returns are filed.

The final step in registering your business partnership is to register it for self-assessment with HMRC. This will be done by the nominated partner, and they will be responsible for sending the annual company tax return. All other partners will need to personally register for self-assessment tax individually.

Limited liability partnership (LLP)

A limited liability partnership (LLP) is a specialised business structure that offers some of the benefits of both a traditional partnership and a limited company. An LLP is composed of two or more partners, each of which has limited liability for business debts and obligations. This means that if the LLP becomes insolvent, the partners’ personal finances and assets are protected from seizure.

In addition, an LLP provides a flexible framework for structuring business relations among the partners. For instance, partners can agree to share business profits and losses in any proportion they choose. As a result, an LLP can be an attractive choice for businesses that want to enjoy the benefits of both partnerships and corporations.

Limited liability partnership director responsibilities

If you are the director of an LLP, you will need to:

• Maintain accurate accounting records
• Prepare, sign and file accounts with Companies House
• Appoint an auditor (if required)
• Keep the statutory register up to date (e.g. Persons with Significant Control)
• Submit a confirmation statement to Companies House
• Inform Companies House of any company changes.

As a director, you must ensure that you comply with all your responsibilities to avoid fines and potential criminal charges from Companies House and HMRC.

How to register a limited liability partnership

The first step in registering an LLP is to choose a company name. Your chosen name cannot be too similar or the same as another registered company. You can check this through Companies House or by using our company name checker. Your company name must end in “Limited Liability Partnership” or “LLP” and cannot contain offensive terms.

The next step is to choose your registered office address. Your registered address will be where Companies House will send all official correspondence and needs to be:

• A physical address
• In the same country as your LLP is registered.

You can use your home address if you do not have an office address. Many directors prefer to use a virtual office address for their registration rather than their home address as it protects their privacy. 

Virtual office addresses provide companies with a physical address for correspondence that will be forwarded to your personal address. You can also use a director’s service address to avoid your personal details being available on the public register.

The final step is to register your LLP with Companies House. You can register the company electronically or by post, or use a company formation agent to handle the registration for you. Using a company formation agent takes the stress out of registering and gives you peace of mind that your registration will be successful.

Register your limited liability partnership today.

Private limited company (Ltd)

In the United Kingdom, a private limited company (Ltd) is a business that’s a separate legal entity from its shareholders. Limited companies are businesses that have shareholders, but the shares cannot be sold to or bought by the general public. Private limited companies must have at least one director and one shareholder, but there’s no limit to the number of shareholders they can have.

Limited companies can either be “limited by guarantee” or “limited by shares“. A private limited company has limited liability, which means the liability of the shareholders is limited to the amount of money they have invested in the company.

If you want to set up a private limited company in the UK, you need to register it with Companies House. You will also need to create a “memorandum of association” and “articles of association”. These documents state what kind of business you are setting up and how you will run it. You will also need to pay a registration fee. Once your company is registered, you will be able to start trading.

Private limited company director responsibilities

As the director of a private limited company, you are responsible for:

• Following your company’s rules as outlined in your articles of association
• Keeping accurate company records
• Reporting any significant changes to Companies House
• Filing your company accounts and annual tax return
• Informing shareholders of any potential personal benefits of business transactions
• Paying corporation tax.

How to register a private limited company

The first thing you need to do to register a private limited company is to pick a company name. As with LLPs and ordinary partnerships, the name cannot be in use by another company, too similar to an existing company or offensive.

Next, you’ll need to put together certain documents for Companies House. The first document to prepare is your “memorandum of association,” which outlines the basic information about your company. Next, you will need to draft your company’s “articles of association,” which set forth the rules and regulations governing your company’s internal affairs. 

Once you have these documents in order, you can submit them to Companies House and pay the registration fee. Once your company is registered, you will be required to file annual reports and accounts with Companies House. In addition, you will need to comply with all applicable laws and regulations. 

Registering a limited company is a relatively simple process, but it’s important to ensure you understand all the requirements before getting started. One of the easiest ways to register a limited company is to use a company formations expert. 

Register your private limited company today. 

Public limited company (PLC)

A public limited company (PLC) is a type of limited company listed on the stock exchange. This means that anyone can buy shares in the company. A PLC must have a minimum share capital of £50,000 and at least two directors.

One of the advantages of being a PLC is that it can raise money by selling shares to the public. This can be useful if the company needs to expand or if it wants to pay off any debts. Another advantage is that a PLC has limited liability. This means that the shareholders will not be held responsible if the company goes into debt.

However, there are also some disadvantages to being a PLC. For example, the company is required to disclose its financial information to the public. This can be a disadvantage if the company wants to keep its financial affairs private. In addition, a PLC is subject to more regulation than a private limited company.

Public limited company responsibilities

As a director of a public limited company, your responsibilities include: 

• Ensuring your company has at least two directors and a qualified company secretary
• Sending an annual return to Companies House
• Maintaining all company records 
• Filing accounts with Companies House every year
• Ensuring your company accounts are professionally audited (unless exempt)
• Paying corporation tax.

How to register a public limited company

Before you register your public limited company, you need to double-check that you meet the following requirements: 

• You have at least two shareholders
• You have at least two directors and a qualified secretary
• You have a minimum share capital of £50,000.

As with almost every business structure, the first thing you need to do to register a public limited company is to pick a name. You’ll need to ensure the name is available, not too similar or the same as an existing company and isn’t offensive. You can use our company name checker to see if your business name is available. 

Next, you’ll need to put together your memorandum and articles of association. These documents outline how your company will run. They include details on how decisions are made, director responsibilities and how you can appoint and remove directors. While you can put together your own incorporation documents, it’s always a good idea to consult a professional. 

With your documents ready, you can file them with Companies House and complete your application. This can be done online or by post. We’d always recommend applying online as the process is much faster.

The final stage in registering a public limited company is to apply for a trading certificate. Before you can start trading as a PLC, you must have a trading certificate from Companies House that confirms you meet the share capital requirements. 

How to choose the right business structure for your business

When starting a business, one of the first decisions you’ll need to make is what type of business entity to establish. This is a daunting decision as it will impact a number of factors, including your personal liability, your corporation and income tax obligations, and the amount of official paperwork required to keep your business up and running.

Hopefully, our guide has helped you to understand the different business structures in the UK, but if you’re not sure where to start, here are some things to consider that might help you make a decision: 

• Do you want to be personally liable for business debts? 
• Do you want shareholders or to run the business on your own? 
• Do you want to share responsibility and liability with a partner? 
• Do you want to start simply and change the structure later on? 

It’s important to remember that although your business structure is important, it’s not permanent. Many entrepreneurs in the UK start as a sole trader and become a limited company at a later date. The process of changing your business structure is usually straightforward, and if you’re unsure, you can hire a formation agent to handle everything for you. 

Start your business with Mint Formations today

Ready to start your own business? If so, Mint Formations can help. We specialise in helping people register their businesses. We’ve helped thousands of people get their businesses off the ground, and we can do the same for you. 

Company registrations are easy with Mint Formations. We can help you every step of the way, from choosing the right business structure to filing the necessary paperwork. We’re here to make starting your own business as easy as possible. 

Register your business with Mint Formations today and get free lifetime support from our lovely team. If you have any questions, get in touch with us today, and we’ll do everything we can to help.

The post The ultimate guide to UK business structures appeared first on Mint Formations Blog.

But if you’re looking to set up an online business in the UK, it can be daunting working out everything you need to do. How do you register your business? What do you include in a business plan? And what are the best ways to market your new company?

This guide will walk you through every step involved in setting up an online business in the UK. So whether you’re just starting or you’ve been running a business for a while, this guide has something for you.

What Is an online business?

An online business is pretty much what it says on the tin. It’s a company that conducts business entirely online rather than in a physical location. While many companies have a shopfront or premises alongside an online store, online companies are purely internet-based.

Over the last decade or so, the number of online businesses has increased exponentially. This is due to increased consumer demand. In 2020, the number of digital shoppers reached two billion, roughly a quarter of the world’s population. Despite support for local businesses, Nasdaq predicts that by 2040 consumers will make over 90% of their purchases online.

Benefits of an online business

Access to market

Creating an online business gives you unrivalled access to the market. Whether you use your own website or online marketplaces like eBay and Amazon, you can set up a business quickly and access potential customers around the world.

Lower overheads

By only selling online, you remove the need for retail premises and do away with the need for customer-facing staff altogether. Eliminating these costs allows you to invest in better products and marketing and improve your small business.

Rapid growth

While a traditional business relies on foot traffic and word of mouth, an online business doesn’t have these constraints. With good products and a well-researched digital marketing strategy, you can grow your business quickly.

Potential downsides of running a business online

Security and Fraud

As online businesses are rapidly growing, cybercriminals are looking to target these businesses. If you sell online, you’ll need to ensure that you have the latest security systems in place to deter criminals. Failing to protect your online business can be fatal for your finances and customer trust.

Legal issues

As a business owner, you’ll be responsible for ensuring that your online business is legally up to date. Online sales have different laws that you’ll need to be aware of and compliant with. Failing to keep up with things like General Data Protection Regulation (GDPR) can result in hefty fines and loss of income.

Trust

Consumers are naturally wary of anybody online who isn’t a trusted brand. With no physical location, your potential customers will need convincing your business is genuine and not a scam. This is less of a problem once you’ve established your business but can be challenging at the start.

Types of online business

Millions of people worldwide are making money online. E-commerce is undoubtedly the most popular form of online business, and the UK has the most advanced e-commerce market in Europe. But while e-commerce makes up a large proportion of the market, there are many different companies you can start with just a computer and an internet connection. If you’re eager to start making money online and e-commerce isn’t quite right for you, here are just a few of the other routes you can take:

• Writing and blogging — If you’re a skilled wordsmith, tons of businesses out there need your help. You can sell your writing skills as a service or find a blogging niche and make money through advertising, sponsored posts and affiliate marketing.
• App development — Got a great idea for a new app? Designing apps is not easy, but developing apps is a great way to make money online if you’ve got the skills (or the time to learn the skills). Plus, apps are getting easier to design with easy-to-use software.
• Graphic design — If you’re a dab hand at design, there are endless possibilities to make money online. You can sell your services to businesses, or you can design art prints, t-shirts and all sorts of other products that you can sell through marketplaces like Redbubble.

One of the reasons that so many people are starting an online store or business is that there are very few passions, hobbies and skills you can’t turn into successful business ideas. The only thing that stops a lot of people is a lack of know-how.

Seven steps to start an online business

Starting an online business isn’t all that different from creating a traditional brick and mortar business, but it involves a few different steps. At Mint Formations, we’ve helped thousands of people get their entrepreneurial dreams off the ground and here are our seven steps to success:

Step 1: Business idea

As the saying goes, one great idea can change the world. At this stage on your entrepreneurial journey, you’re just searching for an idea that will change your world; the rest can come later. If you’re already thinking about starting your own online business, then it’s pretty likely that you’ve got an idea — or a couple of business ideas in mind.

If you haven’t, it’s good to keep things simple. Focus on what you’re passionate about or particularly good at. With that in mind, assess whether you think there’s a demand for it or a gap in the market or how you can adapt your skills to the demand. Try to think about growing trends and how you could capitalise on them. In-depth market research will come later; you are just looking for potential business ideas at this stage.

Try to put together multiple potential ideas so that you’re not back to square one if any of them don’t pan out. Look at different angles for each concept, as this can help you find your niche and target audience.

Once you’ve got your ideas, ask your family and close friends for their opinion. Sometimes being too close to the situation can blind you from potentially huge opportunities or flaws in your business idea. Ensure that whoever you ask will give you honest feedback and not sugarcoat any criticism.

Struggling for ideas? Read our article on small business ideas that are perfect for everyone.

Step 2: Market research

After finding your potential business ideas, you need to deep dive into market research. Market research is essential for finding potential customers and your target audience. This is a crucial step as it will show you whether or not your business idea is feasible and give you an idea of your scope for success.

When you start to conduct market research, it can be a bit daunting, and it’s easy not to have a clue where to start. One of the best ways to do this is to look at statistics and reports about similar products or services to those you plan to sell. Many organisations and companies publish documents and information about market trends which you can analyse.

Alongside this, you can carry out competitor research. Start by making a list of companies that sell the same services or products you plan to and look into each of them individually. Study how well their companies are doing by checking their financials on Companies House and by checking their web and social media presence. From this research, you should see what your competitors are doing well and find ways to improve it. You’ll also spot areas they’re failing in and find ways to beat your competitors.

Another way to find your target customers and potential audience is to conduct online surveys. These are relatively easy to set up with a survey service provider or Google Forms. If you choose to carry out a survey, get as many responses as possible. The more answers you get, the more you know about your audience. Interviews and focus groups are also worth considering.

Step 3: Business name

Choosing a business name may seem like one of the easiest steps in getting your business off the ground — it’s not. But luckily it’s one of the most enjoyable steps. Choosing the right business name can be massively rewarding for your branding and marketing. But choosing a bad name can doom your business from the very start.

Before you get started thinking about names, you should be aware of the rules for naming a company in the UK. While the rules for naming a business are slightly different for a limited company and a sole trader, it’s a good idea to follow the limited company rules to avoid rebranding if you incorporate them later. The rules are as follows:

• You must choose a unique name
• It cannot be too similar to an existing business or trademark
• Do not use offensive or sensitive language or words
• Your name shouldn’t imply any government endorsement.

Beyond those rules, you have relatively free reign to choose any name. Use a company name checker to see if the name is available throughout the process. You should also check to see if the web address for the name is available. You can do this by looking at web hosting sites like GoDaddy. If your company name is available, but the domain isn’t, we’d recommend trying to find a new company name.

Just as you came up with a list of potential business ideas, it’s worth making a list of business names. You should have a good idea of what works for your target audience from your industry research: maybe your competitors all have short, snappy names or the opposite. It’s good to use that as a yardstick unless you think your competitor’s are missing a trick.

While you’re making your list of potential business names, bear the following in mind:

• Is the name easy to spell?
• Are you limiting your business by being too specific?
• Does a company with the same name already exist?
• Does it tell your customers what you do instantly?

Find the perfect name with our business name guide that’s full of handy tips, tricks and examples.

Step 4: Business plan

With your business idea, name and market research complete, it’s time to bring it all together in a business plan. With your fully-realised business concept, you can build your blueprint for success. Your business plan is essentially your rulebook and plan for success; it maps out how you will run your business and how you’ll overcome obstacles.

Putting a business plan together can be a daunting task, and it takes some time to do it correctly. But it’s well worth the time, and almost all successful businesses have a business plan. In your business plan, you’ll need to include:

• Business structure — This outlines who are involved in the company and what they do.
• Products — This is a complete description of the products or services you provide.
• Company description — A definition of what your business does. It’s an executive summary of your business.
• Competitors — Who are you trying to beat? This is your plan to not only compete but beat your competition.
• Finances— How are you financing your business? This outlines how you will afford to start and run the business. This could be bank loans, government grants or personal savings.
• Budgeting — Most new businesses that fail do so due to a lack of budgeting. Set out your planned expenses in thorough detail to avoid going out of business needlessly.

Your business plan will also include your development timeline, business goals and marketing (more on that shortly) and anything else you think is necessary. Often entrepreneurs will spend hours labouring over making a formal business plan, but to start with, it can be as informal as you like — just stick to it. If you’re going to take the plan to investors, though, you’ll need to ensure it’s professional.

Read our guide to putting together an effective business plan.

Step 5: Registering your business

Regardless of what type of business you want to start, you’ll need to register it with HMRC and Companies House. Before you can register, you’ll need to choose a business model. Most UK companies either register as sole traders or limited companies.

• A sole trader is usually best for anyone starting a smaller business. Legally, there is no separation between the business owner and the company itself. This means that any profits or losses will affect the owner’s finances.
• Limited companies are separate legal entities to their directors and shareholders. By registering as a limited company, you can protect your personal finances and have limited liability for any business debts.

Once you’ve chosen your business model, you’ll need to register your business. The sole trader registration is far more straightforward, and you only need to register with HMRC. For a sole trader registration, you’ll just need your national insurance number, business name and personal address.

Registering a limited company is a little more complicated as you’ll need to register your business with Companies House and HMRC for tax. To register as a limited company, you’ll need to provide the following:

• UK registered business address
• Information on your director(s), shareholders and company secretary
• Your company Standard Industrial Classification of Economic Activities (SIC) code
• Your business’s prescribed particulars
• Your memorandum and articles of association

Although Companies House and HMRC make registering a business as simple as possible, it’s still a lengthy and confusing process. That’s why many new companies opt to use a company formations agent like Mint Formations. Company formations agents take the hassle out of your registration and allow you to focus on running your business.

Find out more about registering a small business or picking a formations agent to help.

Step 6: Setting up your online store or business website

If you’re setting up your own online business, you’re probably going to need a website. You can choose to design your own website or use a third-party platform like eBay, Etsy, or Amazon if you’re planning to sell products. Both approaches have pros and cons, but ultimately, it will depend on your business goals. Third-party platforms give you access to millions of potential customers, but you pay for that privilege through fees on sales. Before deciding on which your business will use, review the needs of your business.

Many new businesses use a third-party platform when starting an online business to give them money and income to fund their own website. Whether you’re building an e-commerce store or selling services online, building a website takes time and having a revenue stream can help with startup costs.

The type of website you decide on will depend massively on your industry. An eCommerce website will be entirely different to a service-based business as internet users will have different intentions when visiting the site. Go back to your market research and look at competitors and other relevant websites to see the type of website you could design.

Once you have your vision of your website’s look, you can start to get it put in place. You can hire a web designer to do this or do it yourself. If you’ve not designed a website before, that’s no reason to be put off, as there are tonnes of easy-to-use web builders that have drag and drop tools. When you’re designing your website or putting together a brief for your web designer, consider:

• How your website will look — Your site needs to be appealing and match the brand image you want to convey.
• The logo and branding — Do the design elements of your site match up with what will appeal to your target audience?
• User experience — How can you ensure any site visitors have a smooth experience that leads to sales?

Check out our top seven web design tips for limited companies.

Step 7: Marketing

Marketing is one of the biggest challenges for new online businesses. Failing to have a solid digital marketing strategy is one of the reasons many new businesses don’t succeed. You may have the best products and a fantastic website, but you won’t reach your target market if your marketing efforts aren’t good enough. Here are just a few of the things you’ll need to consider for marketing:

• Search engine optimisation (SEO) — You need to keep search engines in mind when you’re building your website. Optimising your entire website for search engines is crucial for building web traffic as it affects your Google Rankings and drives customers to your site. After your site is built and optimised, you’ll need to continue your SEO efforts by creating content that drives traffic.
• Social media marketing — Your business’s social media pages can be a huge source of traffic and sales for your business. Before you start social media marketing, you’ll need to consider the best social media platforms for your business based on your target audience. Once you’ve decided on your platforms, you should develop a plan for the types of posts you’ll create, how they will stay on brand and where you’ll source imagery.
• Email marketing — Building an email list is one of the best ways to convert potential customers into clients. Email marketing is relatively straightforward to set up but difficult to do well. Often new businesses will overload their customers with business updates, news and offers that result in a low open rate, making your email efforts pointless. You’ll need to put together a plan and research online about best practices.
• Paid online advertising — Pay Per Click (PPC) advertising is one of the best ways to drive traffic and sales. You can create social media and Google Ads to appear in potential customers’ social media feeds and search results. It’s crucial to thoroughly research your market and customers before starting PPC advertising, as getting it wrong can be costly.

While marketing your business might seem like a lot of work, it can be a lot of fun too. You can experiment with different approaches until you find the perfect strategy. The majority of web hosts now have plugins that help with marketing too. For example, WordPress has Yoast, a free marketing tool for SEO. Plus, there are many articles, podcasts, and tutorials online about digital marketing that will help you get up to speed.

Ready to start your own online business?

Starting a new business can seem like a daunting prospect, but don’t be put off by the amount you need to do. Last year saw more new businesses than ever, which means you can do it too. Plus, there is plenty of help available.

At Mint Formations, we help thousands of people start their businesses every year. We take the hassle out of registering a new company so you can focus on what’s important — your business.

Register your business with Mint Formations today. Our company formations packages make registering your online business quick and easy. For more information, get in touch with us today.

The post The complete guide to setting up an online business UK appeared first on Mint Formations Blog.

There are several different types of partnerships, all with various features. We’ve listed them here so you can choose which one is best for you.

Deciding On a Type of Business

Deciding on your business type is an exciting and necessary step in your entrepreneurial plan. It is important to remember that your business structure will usually expand and evolve as your company grows. Whether your business is a partnership or you are a sole trader, your company type can still change, as eventually, circumstances may mean it becomes a sensible decision to incorporate your business or join forces with another business partner. 

How Does a Partnership Work?

A partnership is when a number of individuals each own part of a business. These individuals may be passive investors or active partners who play a role in the everyday running of the business. A partnership agreement outlines how the relationship between the partners will function. In 2020, the UK private sector business population consisted of 414,000 ordinary partnerships (which equates to 7% of all businesses).

To join the partnership, each partner must first invest or “buy-in”. Generally, the losses and profits made by each partner are based on the percentage of the company they own.  

How Do Partnerships Compare to Other Types of Businesses?

A partnership is financially and legally binding to its owners. For tax purposes, the money made and lost by the business may be passed through to the owner’s personal income.  Normally corporations are more difficult and more expensive to set up in comparison to a partnership. Partnerships also often get away with paying less tax in contrast to corporations due to pass-through taxation.

So what are the different types of business partnerships?

General Business Partnerships

The simplest partnership is a general business partnership, which is normally set up by a group of sole traders.

A business partnership is simply an agreement between people who plan to work together and does not have legal status. However, it is a legal requirement that each partner completes a separate tax return, registers for self-assessment and registers the partnership with HMRC.

Advantages:

Each partner pays tax on their share of the business’s profits. 

Disadvantages:

Each partner is liable for any business losses, meaning if one partner is unable to pay, the other partners will have to cover their share of the debt. This could put the other partners’ assets at risk.

Limited Partnership (LPs)

Limited partnerships consist of at least one limited partner and one or more general partner. The general partner is usually in charge of the limited partners and the business. Generally, a limited partner’s liability is limited to their level of investment and they have nothing to do with the daily management of the partnership.

Advantages:

A limited partner is an individual who typically has no desire to participate in the business other than to invest capital and receive their portion of the profits. If, for example, a friend or relative wants to invest in your business, then a limited partnership may be a good option.

Disadvantages:

As passive investors who do not take part in management, limited partners cannot sustain losses that are more than their annual income

Limited Liability Partnership (LLPs)

A limited liability partnership (LLP) is more similar to a limited liability company (LLC) than other types of partnerships. An LLP consists of partners with limited liability who pool their resources and share space to save money.  

Advantages:

General partners in an LLP have limited liability, which is different from a limited partnership.

Disadvantages:

Some businesses or individuals may avoid doing business with this type of partnership because the partners have limited liability. 

What Should You Consider Before Starting a Partnership?

The following points should be considered before starting a partnership:

• It is a good idea to have a partnership agreement — Having each partner’s solicitor outline a partnership agreement is a good way to begin your partnership. This agreement can help you clearly define who is responsible for what — and what happens if you decide to stop working together.
• Don’t forget about added expenses — Since it’s a good idea to have a solicitor give your partnership agreement a once-over, make sure you include any additional expenses.
• You must trust your partners — Only go into business with a partner you can trust, as all partners are responsible for any debt or poor business decisions incurred. 
• Consider who you will be employing — It might be a good idea to get some advice from a tax consultant. If you intend to employ people earning more than the owners, then a limited company might be the best choice for you. However, if your business has a few members who earn a similar amount, then an LLP could be the better option. 

How to Form a Business Partnership?

Partnership businesses are easy to set up, which makes them attractive to many business owners. A partnership could be a good option for you as long as you are okay with having unlimited liability. Some companies,  like a photography business, may not have as much need for liability protection as others, such as a doctor.

Our formation application process is entirely online and takes just minutes. We typically register your business partnership in under six hours, although these times will depend on Companies House and how busy it is on the day. Our experts will also help you register the business for self-assessment with HMRC and VAT if your yearly turnover will exceed £85,000. You must register separately as an individual.

Want to start a business partnership? Contact Mint Formations today to form your partnership now!

The post Business Partnerships: A Guide to the Different Types appeared first on Mint Formations Blog.

Finding funding can be the hardest part of getting your business off the ground but also the most rewarding. With over 600,000 new startups entering the market in 2019, a figure set to rise in the coming years, competition for new business funding has never been greater.

Having said that, it’s not all doom and gloom. There are a lot of options to get a startup funded in the UK, and the numbers are constantly growing. From personal investment and bank loans to angel investors and crowdfunding, the landscape of startup funding in the UK is diverse. Read on for our first-time founder’s guide to where to look for funding, and which type might be right for you. 

What’s the first step in funding a new business?

Before starting to raise funds, it’s crucial to work out how much you’re going to need. Don’t just think about your immediate start-up costs — consider all the operating costs you’re likely to have in the first year.

It’s a delicate balance. Not having enough money will stop you from operating effectively. But if you spend too much, you’ll pile pressure on yourself to generate more money than you would need otherwise. Burdening yourself with too much debt will increase the likelihood of your business failing.

Obviously, you’ll be looking to generate income as quickly as possible, and it’s important to estimate what this will be. Bear in mind that it can take time for a new business to begin making regular sales, let alone make a good profit. Consider this when estimating what funding you need to keep the business going in your hugely important first year.

Personal investment

Investing your own money to kickstart your business can be the natural first step to financing your dream as it can be quicker and easier than applying for finance.

Also, if you’re starting a new business, you need to be confident that it is going to succeed. Investing your own money is a great way to test your commitment to your concept by putting your money where your mouth is.

But is it right for you?

Before investing your own money into your business, you should consider the below:

• Keep your pots of money separate — make sure you have a separate bank account to keep track of personal vs. business funds.
• Keep things simple — transfer a lump sum over to your business account rather than moving dribs and drabs.
• Be careful — evaluate the risks of investing your own money before committing.
• Protect your assets — make sure you won’t lose vital assets such as your house or retirement savings if something goes wrong.
• Know your limits — know your personal survival budget to keep your head above water as you start your business.

Ask friends and family

If you don’t have enough money to fund your business, you might be thinking about asking friends or family for financial help. Consider inviting family and friends to invest in the company with the understanding that their money may not be returned.  In most cases, these friends and family are investing in you, not your business. Both parties should think of this investment as a grant with no strings attached. If the enterprise succeeds, a reward to these risk-takers would be a nice gesture.

Business loans

Many high street banks offer business loans to help companies invest and grow. However, banks can be risk-averse. This means they might not be as willing to back a new business as they would an established one because with older businesses they can look at past trading to assess future viability. They also sometimes favour limited companies over sole traders, as limited companies are sometimes perceived as more respectable and reliable due to being more open to public scrutiny.

When applying for a business loan, you’ll need to be able to show any lender that your business is ready for investment and you can afford the repayments. To do this you’ll need:

• A detailed business plan
• Clear sales projections
• A robust cash-flow forecast
• Accounts and tax returns (if applicable).

Crowdfunding

If you haven’t heard about crowdfunding, you must not be serious about funding your business — or you’ve been living under a rock over the past six months. Crowdfunding allows for a wider pool of small investors with fewer restrictions and is ideal in the early stages of a business, especially if you don’t qualify for a bank loan or don’t have the friends or family willing — or able — to provide the “no-strings-attached grant”.

Many sites have started crowdfunding already such as Kickstarter, Indiegogo and Crowdfunder. So if you don’t want to wait until next year to start asking for funding for your business or project, you can get started now.

Angel investors

As your business reaches the next level of growth and you see steady revenue on the horizon, begin to approach sophisticated “angel” investors if you need more funding. This affluent individual — or a group of individuals who pool their research and resources — provides capital for a business startup usually in exchange for convertible debt or ownership equity.

These angel groups can be found in most communities — and on the internet — with a description of their purpose and objectives. After doing their due diligence, these groups will determine if your business meets their requirements and if so, will schedule a meeting to gather more data. Investments can range from £50,000 to £500,000 or more. At this stage of the business, angels become real and serious investors and owners with high expectations looking for solid results.

Funding your startup 

Regardless of which path you take, chances are that you may use all of these funding options at some point as your business grows. At the end of the day, you have a business to run and none of this matters unless it has your full attention. So find a viable funding solution that also allows you to maintain operations and focus on profitability.

Mint Formations is an expert in company formation. Register your company with us today to take the first step in getting your startup up and running.

The post How to fund a startup in the UK: A beginner’s guide appeared first on Mint Formations Blog.

The biggest trend in the property market in recent years is the huge and sudden shift in people buying properties within companies. It used to be the case that only a tiny minority of property investors would buy a house through a limited company, but with changes to mortgage tax relief over the past few years, that number has grown substantially. 

The main reason to register a company to buy a property is tax efficiency. If you are a higher-rate taxpayer renting out a property as a private individual, you will pay up to 45% of your rental income in tax. As a limited company, you will only pay corporation tax at 19%. 

Put in simple terms, it sounds like a no-brainer. However, as with any big financial decision, it is important to look at your long-term goals as an individual and as a company to work out if registering a company to buy a property — or buying a property through an existing company — is the right move for you. 

Looking to register a company to buy a property? Find out if you’re trader or an investor

If you are buying property to renovate, rent out and then sell on at a profit, you are probably a trader rather than an investor. In this case, you should definitely consider setting up a property company. Otherwise, you will need to pay capital gains tax (CGT) on the profits from each property you sell. 

If this isn’t your plan, you are an investor and will need to weigh up all the pros and cons of buying through a limited company or operating as a private individual.

What does setting up a limited company involve?

To set up a limited company, you will need to register with Companies House. Your company must have at least one director and at least one shareholder, but these can be the same person.

You will need a name for your company and to decide whether you are the only shareholder or whether you wish to extend share ownership to someone else, such as your partner. You will also need a company address. You can use your own address, or if you have an accountant, you can use their office address. You must register your company as an employer with HMRC, even if you are only paying yourself as a director.

Alternatively, you could register your company with Mint Formations, and let us take all the hassle involved with forming a company off of your shoulders. 

Advantages of buying a property through a company

From a purely financial perspective, there are three key advantages of holding property as a company rather than as an individual:

Tax benefits on profits

If you own a property in your own name, the profits you make from renting it out will be added to your other earnings — your salary, for example — and taxed as income tax. However, if you hold it within a company, the profits will be liable for corporation tax instead. The rate of corporation tax tends to be around half of the higher rate of income tax, which is an enormous saving. You will still be taxed on the dividends if you take profits out of the company, but there’s flexibility here.

Tax benefits on mortgage interest

As of April 2020, mortgage interest is no longer an allowable expense for individual property investors, but it will continue to be allowable for companies that hold property. This will mean that, if you are a higher-rate taxpayer and use mortgages to buy property, your tax bill will be higher if you buy properties in your own name. Savings can be made by buying through a limited company.

Inheritance tax benefit

Buying a house as a limited company could be a way of minimising the inheritance tax paid by your family members. You may be able to do this by making them shareholders in your limited company, but it’s worth seeking further advice on this.

Disadvantages of buying a property through a company

While the tax advantages of setting up a limited company make it sound like a good idea, there are some things you should bear in mind first.

There are costs associated with running a limited company, and it may take up more of your time than managing a property as a private individual. You will be required to prepare detailed accounts, which may involve paying professional fees to accountants and lawyers. You may also struggle to get as favourable a buy-to-let mortgage rate as those available to personal borrowers.

Switching property to a company

The transfer of existing properties into a company would be treated as a sale by you to the company, and you would be liable to pay capital gains tax. You might also face a stamp-duty charge for any property over the sum of £125,000. This could make the switch very expensive. It is generally advised to retain existing properties in personal ownership and buy any future properties via a company.

Mint Formations is an expert in company formation. Register your company with us today to take the first step in buying your perfect property.

The post How to register a company to buy a property: An easy guide appeared first on Mint Formations Blog.