If you’re launching a business by yourself, setting up a sole proprietorship is your simplest option. It’s far less complicated than setting up a corporation.
However, there are still a number of essential steps to take. In this guide, you’ll learn what these essential tasks are and how to complete them.
Technically, you don’t need to write a business plan, unless you’re seeking outside investment. However, this remains a hugely beneficial task for sole traders either way.
A business plan helps you to understand why your business will be profitable. When written properly, it will help you identify and overcome potential hurdles before they pop up.f
Your sole trader business plan should include the following sections:
It’s recommended to review and tweak your business plan at least once every quarter.
Sole traders should register as self-employed with HMRC at the earliest possibility. You can do this by visiting the government’s online registration portal.
You’ll need to decide on a business name, although most sole traders choose to use their own name.
After filling out your details, HMRC will post you a 10-digit Unique Taxpayer Reference (UTR) and login details for your online account. Keep hold of these, as you’ll need them to fill out your self-assessment form online.
Most sole traders are able to work without having to rent office space. Still, if you need a dedicated place of work, there a few cut-price options. Investigate whether a virtual office, co-working space or a serviced office could meet your needs. These are typically all cheaper than renting traditional office space.
No matter what your business is, an online presence is crucial in 2023.
As such, you’ll need to set up:
A business bank account basically works like a personal one – the main difference is that it’s dedicated to your business’s finances. You should therefore expect the same features, such as a debit card, the ability to make and receive payments, an overdraft option, a banking app and so on. You can compare business bank accounts here.
It may cost you a fair amount to launch your business, especially if you have a lot of equipment to buy. Our guide on business financing can help you find the best way to fund this if you don’t have money saved up.
Perhaps you’ll choose to set up a business bank account with an overdraft, or a business credit card to help set yourself up.
Make sure to keep accurate accounts of your spending and your income ready to submit to HMRC for the end of the tax year. Remember that most business expenses are tax-deductible.
Here is a list of small business insurance products you may need as a sole trader.
Yes, sole traders can employ people. When doing so, you’ll have the same responsibilities to your employees as a corporation does.
These responsibilities include:
It will help to read up on various aspects of employment law, including the rules surrounding working hours, minimum wage, maternity leave, hiring and firing regulations, employee discrimination and so on.
With an effective marketing strategy outlined in your business plan, there should be no reason not to start marketing from the day you launch.
An effective marketing strategy should start attracting customers immediately.
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Danske Bank provides business banking and investment accounts for large businesses, charities and community organisations.
HSBC offers a range of business banking options, including current and savings accounts, business credit cards and overdrafts.
Bank of Scotland offers banking solutions for businesses of all sizes as well as extensive educational resources.
Bank of Ireland offers straightforward banking options for existing businesses, as well as specialised accounts for startup or new businesses.
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