Starting a business is exciting and daunting. Launching a new venture with Brexit looming overhead is particularly challenging.
This is why Ready for Brexit has launched the new Ready for Business channel. Dedicated Business start up advice. Here we highlight the main points to cover when starting your own business and, as part of this process, we reveal how to minimise any downsides and exploit any opportunities that Brexit will bring.
Determine your business structure
When setting up a business, you need to decide on its formal structure. You can operate as a self-employed sole trader, which is often best suited to a ‘one-man’ band, a limited company or in partnership.
There are pros and cons to each of these and it is best to take the advice of an accountant to determine which will work best for you and your operation.
Name and register your business
Settling on a name for your new business is harder than it sounds. If you are registering your business as a company, you will need to use Company’s House name checker to check that there isn’t a company already with that name and the trademark checker to ascertain whether the name, and proposed logo, image or strap-line you plan to use alongside it are not already registered trademarks.
You will also need to check that the website domain name for your proposed name is available too; if you can’t get your business name on a website you instantly disadvantage your business. UK-based businesses are not advised to buy a domain with an .eu prefix as these could become unusable should the UK leave the EU without a deal that covers their use.
Open a bank account
Once you are ready to begin trading you’ll need a bank account to send and receive funds.
All of the banks compete heavily for business accounts, but don’t be taken in by the hard sell. First make a list of services that your business is likely to need from a bank account – an overdraft facility, business loan, credit cards, a business advice and support service, the ability to accept monies in a multitude of currencies with a reasonable exchange rate, etc – then assess which banks measure up and how their fees compare.
If you are going to be dealing in several currencies, you may also want to look at an electronic money account in addition to a bank account; this lets you send, receive and convert multiple currencies from a single account.
When just starting out, many businesses need little more than a phone, internet connection and a laptop and working from a kitchen table is feasible. If you have stock, staff, are producing goods and/or are planning to regularly meet clients, you will probably require a stand-alone office, retail or manufacturing location.
Consider a flexible workspace that you only need commit to for a short period of time, which can be quickly and easily scaled up or down to reflect the needs of your growing business. Look beyond the gimmicks often offered by the new ‘trendy’ shared-office spaces, such as ‘free’ daily breakfasts, and concentrate on assessing the availability of the vital services that could make or break your business – such as internet quality – before committing.
Grants and loans
Most businesses require some capital to get started. There are several ways that you can obtain funds. You can self-fund or make a personal loan to your business and banks and other accredited lenders offer business loans to qualifying applicants. Take advice from an accountant that comes highly recommended before committing to a loan, however, you don’t want to get caught in a cycle of debt.
There are also a series of grants available that tend to focus on specific types of businesses, tech companies may qualify for grants that fund innovation for example. Some grants are available through local and central Government and via the EU. If you do manage to secure an EU grant, check to see whether it will be impacted by Brexit before committing.
When you start-up a business, you quickly learn that you are responsible for paying several different taxes. Depending on the nature and legal structure of your business, you will have to pay corporation tax or income tax, National Insurance, and potentially capital gains tax, business rates and VAT.
While it is not essential, most SMEs benefit from the services of an accountant. The amount of money they save you should outweigh their costs. Choose carefully, however, go by personal recommendation, check references and, if possible, look for an accountant that specialises in your area of business.
If you’re going to be exporting and importing into Europe and perhaps further afield, it should prove invaluable to have an accountant that is familiar with international trade and aware of how possible tariffs and VAT on EU trade could impact.
From recruitment to pharmaceutical research, whatever industry you’re in, you can’t avoid regulations. To operate safely and professionally you will need to ensure that you comply with all the rules and regulations that govern a business’s general operations, such as workplace health, safety and welfare rules.
You will also need to follow the specific regulations for your industry, such as REACH (The Registration, Evaluation, Authorisation and Restriction of Chemicals) if you work with chemicals.
And, these regulations could become more time-consuming and convoluted following Brexit as the UK may have to create separate regulatory organisations that mirror the EU regulations. This means that to operate within the UK and the EU, a chemical producer, for example, would have to register their products with REACH, as well as the UK equivalent.
Some UK professional qualifications are recognised in other countries and currently most are recognised throughout the EU and the European Economic Area (EEA).
After Brexit, there may no longer be a system of reciprocal recognition of professional qualifications between the EEA states, Switzerland and the UK. The world is becoming an increasingly global community. If you’re operating as a professional, think about whether it will be worth you qualifying to operate in markets outside of the UK in order to expand your business footprint.
If you’re employing staff, you will need to see that you are conforming to employment legislation, this means paying at least the minimum wage, covering at least statutory maternity and paternity leave, offering paid holidays and providing a pension scheme.
Health and safety legislation must also be adhered to; this means all factory, retail and office equipment must be regularly serviced and deemed safe, protective clothing must be provided if required; and the working environment must be kept clean, which could mean the additional employment of a cleaner.
You will also need to check that any EU staff have Settled Status or are in the process of applying for it. You may need to assist them with the paperwork for this.
Importing and exporting
If you are selling goods overseas or bringing in goods or component parts from overseas, you will need to be familiar with the relevant tariffs, VAT and customs procedures for the different territories that you are working with. You may find it time and cost effective to use a customs agent to make your import and export declarations for you.
Trading with the EU will also become more involved following Brexit. In preparation for this, you must apply for a UK Economic Operator Registration and Identification (EORI) number and you could also benefit from becoming an Authorised Economic Operator.
And, as when trading with outside of the EU now, following Brexit you will have to comply with Rules of Origin, this means declaring where each of the items that you are sending in to the EU originated from. If you have a product, such as a coffee machine, that is made up of dozens of component parts that originate from several different countries, this becomes an intensive task.
Purchasing and supply chain
There is an art to perfecting the buying of the components and services that you require to run your business. Buy more than you need at anyone time and you could end up with cash flow and storage problems, don’t buy enough and you could disrupt the output of your goods and services, which could severely damage your business.
Harness different technologies to monitor your inputs and outputs and ensure that your suppliers offer the facility to scale up and down quickly. You will also need to audit the different providers in your supply chain to ensure that they consistently provide quality goods and services on time and on budget.
In most sectors of trade and industry it is necessary to comply with an ever changing list of rules and regulations and, as the UK leaves the EU, this list will quickly grow. This is why it is important to keep on top of required accreditations and, ideally, instigate a rolling professional development and training programme for yourself and your staff.
Most trade and industry bodies provide advice on required courses and training programmes.