Sponsored by

Mandy Errington,
DJV Boutique
FSB Member

How to
start a small
business
This guide was produced by the Federation of Small
Businesses with Dell Technologies in December 2022
2

Your business
journey starts here
Seeing your great ideas come to life and turning your passion
into a successful business can be exciting. But if you’re ready
to make your business dreams a reality, how do you know
where to start? At the Federation of Small Businesses, we’ve
put together this handy guide with Dell Technologies to help
you take the first steps towards becoming your own boss.

What’s inside?
Step 1: Do your research
Step 2: Decide on your structure
Step 3: Brand your business
Step 4: Write your business plan
Step 5: Figure out your finances
Step 6: Work out where you’re working from
Step 7: Set up your technology
Step 8: Market your business
3

Step 1:
Do your research
Whether you’ve spotted a gap in the market or you’re ready to
make your side hustle your day job, it’s important to understand the
industry you’ll be working in. Before you jump straight in, take the
time to step back and do some market research.
Which sector are you going into?
Who will your competitors be?
Who is your ideal customer?

5 ways to get started

Build a picture of your target audience by figuring out who your product or service is aimed at.
1
Think about who they are, as well as their interests, motivations and behaviour. This customer
persona will be invaluable when it comes to branding and marketing your business.

Create a survey to carry out customer research and learn more about how people interact with
2
products or services in your industry.

Imagine a typical customer journey and how someone would go from learning about your
3
business to becoming a paying customer. Put yourself in their shoes and think about how
someone may engage with your business.

Define your unique selling point (USP) and find your niche. What makes you stand out from the
4
crowd? Is your product new and innovative? Are you breaking the mould with your approach to
sustainability?

A ‘SWOT’ analysis sounds complicated, but it’s an easy way for you to get your strengths,
5
weaknesses, opportunities and threats down on paper. This way, you can plan how to maximise
your opportunities and prepare for any potential challenges.
 4

Use the SWOT analysis template below to get you started.

Strengths Opportunities
What do you do well? What opportunities are
available to you?

Weaknesses Threats
Where can you improve? What could negatively
affect your business?

Anne Lambelin and Gary McDonnell,

Empty Plates Catering Services
FSB Members
5

Step 2: Decide on
your structure
When it comes to setting up your business, you have a number
of options. The structure you choose will have an impact on how
much tax you pay, the level of risk to your personal assets, and
your access to business finance.

When do I need to register my business?

There isn’t a requirement to register a business to make it official, but you do have a responsibility to
notify HMRC.

Here are the six most common business structures.

1. Sole trader (Self-employed)

If you’re an individual and run your own business you can register as a sole trader. This means you can
keep all your business’ profits after you’ve paid tax on them. You’re personally responsible for any losses
your business makes.

HMRC offers a calculator to help you budget for your tax payments as a sole trader.

Find out how to set up as a sole trader

2. A limited company
A limited company can be classified as limited by shares or limited by guarantee. A limited by shares
company usually operates for the purposes of turning a profit, has shares and shareholders, and can
keep any profits it generates after paying tax. A limited by guarantee company has guarantors rather than
shareholders and invests profits back into the company. These organisations are commonly known as
‘not for profit’. Limited companies often operate under a trading name which is usually the name of the
business.

A limited company gives you plenty of options in the long-term when it comes to finance and specialist
schemes for small businesses, such as R&D tax credits for innovative businesses.

Find out how to set up a limited company

6

3. A business partnership
Teaming up with another entrepreneur? A business partnership is where one or more individuals
personally share responsibility for the business. This includes shared responsibility for losses the business
makes and costs related to the business, as well as profits the business makes.

Find out how to set up a business partnership

4. A Limited Liability Partnership (LLP)

A limited liability partnership (LLP) is a body corporate with a legal personality separate from that of its
members. Changes in the LLP’s membership do not affect its continued existence. LLPs combine the
flexible structure of a partnership with the benefits for its members of limited liability. An LLP owns the
assets of the business and is liable for its own debts; and the members act as its agents and only have
liability up to the amount they have contributed to the LLP.

Find out more about LLPs

5. A social enterprise
A social enterprise is a business which exists to help people or communities. Social enterprises can
operate as a limited company, a charity, a cooperative, a sole trader or business partnership, as well as
a community interest company (CIC). Each category has different rules about how your business can
operate, and you should think carefully about which is best for your business.

Find out more about social enterprises

6. An unincorporated association
An unincorporated association is a group of people who come together to operate for reasons other than
making a profit, like voluntary groups or sports clubs. Although not a business, members are responsible
for any debts and obligations and if the association does start to trade and turns a profit, it will have to pay
and file returns.

Find out more about unincorporated associations

7

Step 3: Brand your

business
Your name and brand identity say a lot about who you are
as a business, especially when you’re just starting out. First
impressions take just seconds, but they can influence a customer’s
relationship with your business in the long-term. Being instantly
recognisable helps to build your brand identity and establish trust
in your business.

Use the research you did about your industry, competitors and
market in step one to help you decide on a name, logo and
branding that fits your vision.

What’s in a name?

Keep it simple
Make sure people will be able to remember you when they need your
products or services! Avoid confusion with long or hard to spell names.

Check online
Is someone already using your name? Is it available for a website domain
or on social media? Do a quick search to make sure your name is available
across different platforms. Copying someone else’s name or using
something too similar could lead to an action against you for copyright
infringement, passing off and/or trademark infringement.
8

Growth mindset
Sure, you might be starting off small with one or two offerings, but don’t
box yourself in. Think about your plans for your business in the years to
come, and the brand you want to be in the future.

Need inspiration? Ask your friends for suggestions or use free name
generators online for ideas.

Design your logo

Your logo is the symbol for your business. It sets you apart from the
competition and defines who you are.

Who are you as a business?

Your logo will have an impact on everything you do - it’s the first thing
employees, connections and potential clients will see.

What is your messaging?

Think about how you want to position your business and how your logo
relates to your offering.

What are your brand colours?

Your colour scheme should tie in with the overall look and feel of your business. Choose a limited palette
for maximum impact.

Make sure it’s unique

Copying someone else’s logo or using something too similar could lead to an action against you for
copyright infringement, passing off and/or trademark infringement

What will it look like online?

You’ll need different variations of your logo for your social media profiles, across the web and in other
marketing materials.

Free and affordable tools

Don’t worry if you’re not a graphic design guru! There are plenty of free and easy-to-use tools online to
get you started, or you could enlist the help of creative friends or family.
9

Create your brand guidelines

Brand guidelines outline how your business should be represented to the outside world, from your visual
identity to how you communicate. It includes your mission statement, values, logo usage, colour palette,
tone of voice and more.

There are lots of creative examples of brand guidelines online, but a simple document can make a great
reference point, especially when you’re busy running your business. It’s a great way to get clear on your
branding from day one. This activity allows you to look at your brand as a whole and refine how you want
to portray your business.

What should you include?

Your brand story
How would you describe your business in a What is your elevator pitch?
few sentences?
What are your values?
What is your purpose or mission statement?
What is your tagline or strapline?
What are your goals?
What is your brand positioning?

Your visual style

What are your primary and secondary brand colours? (Don’t forget to include RGB colours for web
and CMYK for print)

What fonts will you use and how will you use them?

What imagery will your business use?

How will your branding apply to your online presence, such as your website
and any digital advertising?

Your logo
Are there any variations of your logo?

How should your logo be used?

Top tip!
Are there any rules for the sizing and spacing of your logo?
As your business grows, you’ll
want to check back in with your
Your tone of voice branding to make sure it’s still
aligned with where you are in
What does your brand sound like?
your business journey.
What words or phrases resonate with your business?

Do you have any overarching messaging?

How would you describe your tone of voice?

 10

How can you protect your branding?

Now that you’ve done the hard work coming up with an eye-catching logo and catchy product names,
what stops someone from stealing it?

Trademarking can help protect your intellectual property. It covers logos, colours and words. The
government website explains the process of registering a trademark in the UK, and what qualifies for
registration. You can also check if something has already been trademarked. Brush up on the basics of
intellectual property and how you can protect your small business with our guide.

Confuse
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the sma
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FSB Leg
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home to
legal do over 1,40
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including and tem
in-depth plates,
patents, guides o
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David Holliday,
Moon Gazer Ales
FSB Member
11

Step 4: Write your

business plan
What is a business plan?

A business plan is a written document that includes a brief

description of your business. It looks at the objectives, strategies,
sales, marketing and financial forecasts of your business. It’s
a useful summary of your business that sells your ideas and
ambitions to a potential customer, supplier or even staff.

Why do I need a business plan?

Your business plan will help you to:

Visualise your long and short-term goals and objectives

Measure your progress and performance

Clarify your business idea or proposal

Spot potential problems before they happen

Understand how your business can grow

A business plan should include seven key sections: Thinking of applying

1. Executive summary for a start-up loan?
2. Business description
Banks and finance
3. Details of market strategies
providers usually require
4. Competitor analysis
a business plan from
5. Design and development plan of your products and services

6. Information about your operations and management plan

start-ups as part of their
7. Financial information, planning and factors
loan assessment process.
12

First steps
Aside from the basic details about you and your business, the following questions can help you
to get started with your business plan.

1. Summary
What does your business offer?

What are your business aims?

2. Background
Why do you want to run a business?

What are your qualifications, education and work experience?

Are there any training courses that could help you run your business?

3. Products and services

What products or services will you be selling?

Who is your ideal customer?

How will you produce the product or service?

Who are your suppliers?

 13

How will your customers pay?

Do you have premises and/or equipment?

How will you market your business?

4. Finances
What are the costs for each product and service?

How much will you need to pay suppliers or manufacturers?

What are your outgoings for staff, premises, bills and suppliers?

What are your financial forecasts for the next 12 months?

Ready to start
your detailed plan?
FSB members have access to a
downloadable, in-depth template
and guide for writing a business plan
through the FSB Legal Hub.

Sarah Curtis,
Harry King & Sons Ltd
FSB Member
14

Step 5: Figure out

your finances
Running your own business means you’ll be responsible
for your new venture’s finances. It can be daunting but
balancing your books and making sure the numbers add
up is crucial.

Open your business bank account

Although it’s common to use a personal account for business purposes when you’re self-
employed, there are many benefits of having a business bank account.

• Save time and manage your money better by separating your personal finances and
business finances from day one.

• Make your accounting tasks easier by quickly identifying business-related transactions.

When tax deadlines roll around, you’ll be far more prepared.

• With some banks, using personal accounts for business is against their terms of service,
so you may have problems later down the line.

Read our guide to choosing a business bank account

to find out what to look for.

Don’t forget to plan for the future!

It might seem far away now, but when you’re self-employed,

you’ll need to think about saving for retirement. Check out
our handy guide to setting up a self-employed pension.
15

Do you need an accountant?

From bookkeeping to tax advice, having an accountant on board can take away the
stress of managing your business’ finances, and help you to stay compliant. However,
hiring an accountant when you’re getting your business off the ground can be costly.

As a start-up, it’s possible to manage your own finances and keep track of your
expenses with spreadsheets or online accounting software. Our free guide to small
business taxes includes everything you need to know about tax and VAT, including
tax deadlines and tips for filing your self-assessment.

Understanding terms and conditions

It’s absolutely vital for any business to have these. These need to be brought to your
client’s attention at the time the contract is entered into or earlier. Failure to do so
means they are not part of the contract. Amongst other things, you need to consider
the nature of your clients. Different types of customers have different rights and as
such you have different obligations.

Businesses clients

There’s much more emphasis on the contractual terms and conditions. The Unfair
Contract Terms Act 1977 only covers clauses which purport to exclude or limit
liability, but despite the name, there’s no general concept of fairness.

Legislation like the Sale of Goods Act 1979 and the Supply of Goods and Services
Act 1982 apply and imply certain terms, and give your customers legal rights, but
importantly these can be altered or removed by terms and conditions.

Consumer clients

A consumer is defined as an individual acting for purposes wholly or mainly outside

of a business – there much more statutory control. There is a general concept of
fairness, and unfair or imbalanced terms can be challenged.

Legislation like the Consumer Rights Act 2015 and the Unfair Terms in Consumer
Contracts Regulations 1999 apply and imply certain terms, and give your customers
legal rights, and importantly these cannot be altered or removed by terms and
conditions.
 16

Invoicing your customers

An invoice details what you’re charging and lays out the payment terms. However, your terms and
conditions should also have been set out right at the outset or before the time you enter into a
contract with any client. Clear invoices not only keep you legally compliant but are an important
part of your record-keeping. You’ll need them to do your bookkeeping, tax returns, and accounting.

If a customer doesn’t pay upfront for your product or service, you’ll need to work out a framework
for invoicing - and stick to it! From one-off freelance gigs to regular contracted work, knowing how
to write a professional invoice correctly means you’ll get paid sooner for all your hard work.

One of the biggest pitfalls as a new business is too much flexibility with invoicing. Inconsistent
payments can create cash flow problems for your business. This leaves you in an uncertain
position, unprepared if you’re hit with an unexpected expense and less able to plan for growth.

• Know what you will charge customers for

• Set limits on what you actually do for customers

• Be clear about what you expect to be paid and when

Avoid bad habits when dealing with late payments from the
beginning with FSB Debt Recovery. With an easy step-by-step
process and downloadable resources, we can help you to
control your cash flow from day one.

Kenneth McKenzie,
Highland Farm Cottages and Café
FSB Member
17

How to finance your business idea

A start-up loan is a government-backed personal loan available to individuals looking to start or
grow a business in the UK. It allows you to borrow up to £25,000 per company director.

Here are some key things you’ll need to consider as part of your start-up loan application journey.

Your business and objectives

Put your best foot forward when pitching your business

Be clear about your goals in the first year and beyond

Be realistic about how much you want to borrow

Align your expenses with your objectives and don’t overspend

Your skills and experience

Don’t be shy about your previous experience in business or a given sector

Training and formal qualifications are required in some industries, but real-life experience is a
plus for lenders

Be clear about your knowledge gaps and build training or mentoring into your plan

Back-up plan

Make sure you have a plan B that lets you keep a cool head when faced with unexpected
events

How would you meet your personal expenditure, loan repayments, as well as any long-term
liabilities in relation to the business, in the event your business were to fail?

Create a personal survival budget, plan for the worst, and set expectations, especially if
you’re going into business with others

Get help applying for your start-up loan

FSB members can access FSB Funding Platform for
free, where you’ll get a simple two-page template to
complete and have support every step of the way.
18

Step 6: Work out

where you’re
working from
You’ve done your research, ticked all the legal boxes, and now
you’re ready to find a home for your new business. Whether you
plan to rent an office space, open a shop, or run your business
from your kitchen table, you’ll have a few things to bear in mind.

Are you insured?

Regardless of where you’re working from, finding the right insurance for your business is crucial to
keeping it fully protected. Before starting, it’s important that you know or have access to key information
about your company. This allows you to know the types of policies you might need, what insurance you’re
entitled to, and what is best for your business.

When applying for insurance, providers will usually ask you to answer a series of questions to give you a
quote and find you a suitable insurance package, such as:

Do you want to insure your equipment or stock?

Do you want to protect your building in the event of a fire, flood or theft?

Do you own or rent the building where your business trades?

Do people visit your premises regularly?

Do you offer a professional service to paying clients?

Do you want other subsidiaries or associated businesses to be included Working

in the insurance? from home?
How many employees might work for you in the next 12 months? Check with your
home insurance that
Property insurance covers claims concerning your business premises,
you’re covered
but there are other types of insurance that you might need:

• Public liability: Covers claims involving people outside your company

• Employers’ liability: If you plan to employ people, this is a legal requirement

• Product liability: Covers claims concerning your products

• Professional indemnity: Covers claims involving your services

19

Planning permissions
Don’t forget this could still be an issue even if you are working from home. All premises have a designated
planning use and you need to ensure that what you intend to do from your premises is covered by the
appropriate use class. It might be that your neighbours will not be happy and may report you to the local
authority. If you do not have the correct use class to operate your business ultimately you could have
enforcement action taken against you by the local authority to prevent you from continuing.

Council tax vs. business rates

If you are working from home, then depending on the extent of your business use, you may well have
to pay business rates on any part of your home now used exclusively or predominantly for business
purposes. Things can be split so you pay council tax for part of your
home and business rates for the other. Obviously subject to certain reliefs
and exemptions premises used exclusively for business will be liable for
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a self-employed person working from home whose workspace is not
accessed by others would not be required to carry out a risk assessment by
law, although you would want to ensure, for your own health, safety and
wellbeing that your work was safe and didn’t put you at unnecessary risk.
You, or the person working from home, can carry out a risk assessment by making
a note of hazards in the areas where work will be carried out and by making
changes to lower these risks.

Ask yourself questions like:

Is there enough room to work?

Is there enough space for my equipment or storage?

Can I enter and exit all rooms without difficulty?

Is the lighting sufficient?

Is there anything obstructing the floor?

Is it comfortable to sit and work for long periods of time?

Can I access what I need in the room without difficulty?

Alasdair Hughson,
Keltic Seafare
FSB Member
20

Step 7: Set up
your technology
Whether it’s communicating with customers, working on client
briefs, or handling the behind-the-scenes admin, finding
the right tech set up for your new business is so important.
Get your start-up ready for take-off with these tech tips from
experts at Dell Technologies.

What will you be using your computer for?

Your small business is unique, so think about how you’ll be using your device day-to-day when
running your business. A decent processor for anyone running software is a must. The better the
processor, the faster your computer. If you’re running creative software, powerful graphics and a
fast processor will be a priority. Dealing with lots of data and information? A desktop may be more
suitable to ensure that you have the space and power to grow.

Where will you be working from?

Next, consider how much space you’ll have or will need for your tech in order to take your small
business where you want to go.

Small studio? On the go meeting clients and suppliers? The flexibility and freedom of a laptop
might be best for you.

Larger working space? Serving customers in a retail environment? A desktop could be better. It
can also support an EPOS system and offer you the ability to plug in your card machine.

Is it built for business?

Just like you separated your finances into a separate business account, it’s also wise to opt for a
commercial grade laptop or desktop that’s built for business. Business-class products are typically
more expensive, but the added security benefits and peace of mind can be worth the
premium. Dell’s commercial laptops have a variety of different security measures built
in, so as soon as you turn on your machine you can be happy in the knowledge that
there are multiple safeguards in place.
21

Do you have the right protection?

Launching your own business takes a lot of time and hard work, so you’ll want to protect your
bottom line against the threat of cyber-attacks. As well as data backups and using strong
passwords, Dell recommends keeping on top of your updates and antivirus protection.

How much storage will you need?

After spending hours working on a client project, the last thing you want is to realise you’ve
run out of space to save files! Storage is the place where all your digital data is saved. It’s
recommended that the average business user should have 16 gigabytes of memory so that
your computer can keep up with you. The best-case scenario is hybrid storage, where you
utilise both hard drives and the cloud.

What about the extras?

Whether it’s headphones to listen to music whilst you’re powering through emails, or a
dongle to ensure you’re always connected when you’re selling on the go, don’t forget about
the tech add-ons than can help you run your business smoothly.

My tech must-haves
Think about your business needs and make a note of what your tech set-up will need.
Use the space below to make notes.

Need help knowing

what the right tech set
up is for you?
Get in touch with a Dell
Technologies Advisor
on 0800 085 4878
Sandy Cowen,
Alexander Paper Supplies
FSB Member

Step 8: Market
your business
It’s time to find customers and secure those all-important sales!
The world of marketing and social media can seem overwhelming,
so these simple tips can help you start your online journey.

Create a marketing plan

Creating a marketing plan can seem like a drain on your precious time at first, but just like your
business plan, it’s helpful to get what you’re going to do and how you’re going to do it in black and
white. Without a plan, you won’t know how effective your marketing is and you might miss out on
valuable opportunities to grow your business.

Stay on track when life gets busy. You’ll know exactly what’s on the horizon and can schedule in
advance.

Grow your business strategically. A well-executed plan can help you to generate new leads, secure
sales and plan for increased demand.

Don’t miss out on opportunities. Switch from a reactive to a proactive approach and stay ahead of
the curve.

Make the most of your budget. Every penny counts as a small business. A plan can help you to
spend in the right places and get the best return on your investment.

Learn from your mistakes. Not everything goes to plan – but with a plan in place, you can quickly
spot the changes you need to make and where you can make improvements.

Make sure you comply with your data protection obligations. The Information Commissioner’s Office
(ICO), the UK’s independent body set up to uphold information rights, has published two new sets
of detailed guidance on how to comply with the requirements under the Privacy and Electronic
Communications Regulations 2003 (as amended) (PECR) for conducting direct marketing
by email and live calls. It’s vital you follow these rules or you could be fined and/or sued.
23

Launch your website

Think of your website as your virtual shop front. It’s where your potential customers can stay in
the know about new products and offers, as well as find out more about your business and read
testimonials.

Online website builders make it easy to set up and customise your online storefront. Be sure to do
your research about pricing and features to find the best fit for your business.

No e-commerce business is complete without a way of offering secure payment options to

customers. Your website should offer safe ways for customers to pay online. Visit our e-commerce
hub for resources designed to help you take your new business online.

Level up your social media

Building your following on social media will help you advertise your business
on a budget. With a well-planned social media strategy, you can grow your
audience, discover new customers and send them to your e-commerce
website.

Use your market research and the customer persona you created at the
beginning of this guide to work out which platforms are best for your business. Is
your audience fanatic about Facebook, or is Twitter more their cup of tea?

Before you begin developing a social media marketing campaign, you need to consider your
business goals. Do you want to reach a wider audience, generate more traffic to your website or
increase product sales?

Watch our free on-demand social media marketing webinar series to find out how you can turn
likes into leads and comments into conversions.

Get noticed online

Search engine optimisation (SEO) is the process of modifying or adding content to a website to
improve its performance on search engines. This includes practices such as keyword research, link
building and content optimisation.

In terms of e-commerce, it’s about continuously doing these things to drive

more traffic to your online store – whether that’s the retail side of your
website or your listings on online marketplaces. Consistency is key.
Having a plan and tackling your website little by little each week will go
a long way in helping it stay updated.

Learn more about how to optimise your online store and make the
most of your SEO efforts. Take a look at FSB’s in-depth guide to
e-commerce SEO.
We’re by your side in business
You’ve started your business journey and are one step closer to your first sale! With the right
expertise, advice and guidance, you’ll have all the tools you need for success. At the Federation of
Small Businesses, we’ve supported countless entrepreneurs on their journey – and we’re here to
help you too.

Since 1974, we’ve been backing small business owners and the self-employed like you, helping
them to start, run and grow successful businesses in every sector and corner of the UK. From legal
advice to local networking, discover the many ways FSB membership can help your business thrive.

Get it right from day one.

Join the Federation of Small
Businesses today.

fsb.org.uk/join