Tips for Starting your Own Limited Company
Many business owners decide at some point to start trading as a limited company. This can mean either going straight in as a company, or scaling up from their sole trader or partnership business.
There are many reasons that you may want to become a limited company, including appearing more professional, which can be a bonus in some industries; there are some businesses that will only work with limited companies and will refuse to work with sole traders. This can be because of the checks that are in place to make sure the company is legitimate.
This post will help you navigate what needs to happen in order to have a limited company, whether this is by starting fresh or scaling up.
Think it through
This may apply more to those who are starting their company from scratch rather than those who are scaling up. You may have a good idea, but it may take more than that in order to make your limited company a success.
It may be the case that you only want to run the part of your business that makes you excited, after all, that's your passion. But don't forget that your business will need to have a structure in place, no matter how small it is. You'll should have policies and procedures to adhere to.
If you are a solo company owner, all these things will have to be completed by you, that could be anything from a website and marketing to bookkeeping and accounts. You'll also need to keep on top of HMRC and Companies House deadlines. You may find that this could become too much for you and you need to have a little help in getting all of this sorted. These are some of the things that you'll have to think through and plan before running straight into company ownership.
You may not need to do every task yourself, you could look at:
- Hiring an accountant
- Using a business call handling service
- Using a mail handling service
- Hiring a freelance web developer
It makes sense taking the pressure off yourself so that you can focus on what you need to do in order to grow the company and make money.
Test your idea
You may have settled on your idea because it's something you're passionate about, but is it what your target market are looking for? Market research can help you ensure that you're offering the right things to the right people at the right time. You'll need to think through the following questions.
- Is what you plan to offer something that people actively need?
- Is it something that you can make a profit from?
- Does your product / service actually work and deliver results?
- Will your customer base be large enough to make it a viable company?
- Will your customers be repeat buyers?
If you're able to answer all of these questions then you'll be well on your way to understanding if your company will be a success. You may also find out that you need to go back to the drawing board and make some changes.
Identify your customer market
Companies of all shapes and sizes need to have an end customer, whether this is the general public or another business. If you don't have an end customer then you don't really have a business.
While you may have an idea of who your ideal customer is, you may need to do some research into who they actually are. This can help you to identify and dissect your target market and where you're currently getting your customers from.
When you've identified who your customers are and how they're interacting with your company you can have an idea in what they're interested in and how you can market to them.
Nail down your business plan
When you're just starting your company, or you're planning on expansion, you may have a few ideas written down on where you're heading and how you'll get there. However, formalising these into a solid business plan can provide you with all the information you need in order to grow your company.
Companies of all shapes and sizes can benefit from having a business plan in place, don't forget they can be fluid as no one knows what the future will bring.
Establish a working budget
When you're working on a business idea, you may find that you have no idea how much it will actually cost in order to set up. This could be planning how much you need to spend to develop your product, advertise it and make it for general release.
If budgeting isn't your strong point, it may be worth you hiring a business accountant to help you get set on the right path.
Success may not come overnight, so you may have to wait in order to see any results come in from your company. This could be weeks, months or even years of careful planning and waiting for the right clients at the right time. But so long as your company is heading in the right direction and is beginning to build momentum then you know you're onto something with your idea.
- 13 May 2021 - Should I Use a Formation Agent?
- 07 May 2021 - How Can I Resign as a Director?
- 29 Apr 2021 - Can Sole Traders Have Employees?
- 23 Apr 2021 - I've Lost My Incorporation Certificate - What Should I Do?
- 15 Apr 2021 - What's The Difference Between Contractors, Freelancers and Consultants?