Rose Buckler, Head of Starling’s Business Banking Operations, shares tips on starting your own business.

Do you dream of setting up your own business? If the answer is yes, you probably have lots of questions. Here, I share my top tips on what you need to think about, right from the beginning when you have your business idea.

Keep business records

The sooner you start noting down costs related to your business, the better. You may be able to recoup some set-up costs down the line, such as mileage on your car to meetings, provided you can justify costs as business related.

Other business expenses could include using a room in your home as an office, or buying stationery or office equipment. It’s worth spending a few minutes each week to note down these expenses.

Sole trader or limited company?

The next big decision is whether to set up as a sole trader or limited company. There are pros and cons to each of the structures and it also depends on the size and nature of your business.

Some business owners only register as a limited company once their business profits reach a certain amount, a decision usually made due to tax efficiency (you could speak with your accountant if you’re unsure). Until then, solo entrepreneurs often operate as sole traders, the benefits of which are lower accountancy fees and fewer business responsibilities.

That said, sole traders are personally responsible if something goes wrong, meaning that your personal assets could be liable, for example if you haven’t taken out sufficient insurance for your trade and someone files a claim against you.

You can find out more about setting up as a sole trader and setting up as a limited company in our free business guides.

Protect yourself with contracts

Once you start trading, always set out the terms of a project or service in a contract. Make sure you include details of what will be delivered, the timeframe and clear payment terms. If you’re receiving a service from someone else, you should also ask for a contract and make sure you’re happy with it.

Many template contracts can be found online, including through the Federation of Self-Employed and Small Businesses (FSB) legal hub, where you can also connect to legal experts who can offer advice on the legal documentation needed.

It’s worth protecting yourself with insurance. Some clients will require proof of adequate insurance before entering into a contract and if you employ someone or have someone doing work experience, or subcontractors, you’ll need Employer’s Liability Insurance. You may also need public liability insurance and professional indemnity insurance. Explore our guide on the different types of business insurance.

Separate business and personal funds

To help avoid tax return issues, keep your business funds separate from your personal funds, for example with a business bank account.

With Saving Spaces you can ring-fence money from your main balance

You can also set money aside for tax. If you go for a Starling business account, the Spaces feature could help with this. For example, when you receive money from a client, you could move a portion of that money into a Space you’ve named ‘Tax’. This will keep money for tax separate from your main balance.

Set deadlines for paying taxes and admin

Write down what the tax deadlines are for the year ahead.

To help you plan and pay on time it’s a good idea, immediately after finishing a project or delivering a service, to send invoices with clear payment terms. If you want some help with invoice management, you may want to have a look at the Starling Toolkit. It can help you create, send and keep track of invoices - paid and unpaid.

The Starling Toolkit can help save on business admin

Toolkit includes bookkeeping tools and a calculator to help you understand roughly how much tax or VAT you will owe. It costs £7 per month and is available with a Starling business account.

The above is intended as general information and does not constitute advice in any way. You should take independent advice if you have any questions about your specific circumstances.

Subscribeto blog updatesarrow-rightGrow your businessHelpful free business guidesarrow-right

Related stories

Latest posts