The Department for Business and Trade has announced that a new Small Business Council is due to be launched in March 2024 to support SMEs across the UK. This council will provide a forum through which the interests of small businesses can be represented within government, ensuring that the government delivers on key business needs. Alongside the formation of the council, the Help to Grow campaign and website have been updated to provide practical advice on setting up a business, together with information on scaling up for existing small businesses.
Establishing and running a small business is complex, so we’ve highlighted seven tips to help you set up and manage your own small business.
1. Choose the right business entity
If you’re about to start your own business, you’ll need to choose the right business structure to use. Most businesses register as a sole trader, limited company or partnership.
Setting up as a sole trader means that you’ll be self-employed and can keep the profits of your business as income, subject of course to tax and national insurance. However, a significant disadvantage is that you’ll also be personally liable for any business debts, putting your personal assets at risk.
If personal liability is something you want to avoid, you can set up a limited company by registering with Companies House. You should, however, be aware of the more stringent checks and filing requirements for forming and operating a company. Our Starting a company toolkit contains all the documentation and guidance you need to set up a new company from scratch.
Alternatively, if you plan to set up a business with other people, you may opt to form a partnership. The most common type of partnership is a general partnership, which requires minimal formalities to set up and limited filing and governance obligations, making it a flexible way of operating a jointly owned business. For more information on setting up a partnership, see our Q&A.
2. Have a business plan
To attract funding for your business from investors and lenders, you’ll need a considered, well presented and persuasive business plan.
As a starting point, you can use our Business plan checklist for guidance on the structure and content of your business plan. Along with this checklist, you should consider:
- how to make your business plan stand out
- the length of your plan
- the importance of the executive summary
- obtaining financial advice
- protecting confidential information
- warranting your plan
- tax reliefs for share investors
For further information on preparing a business plan, see our Q&A.
3. Choose the right lease
If you opt to rent business premises, which will provide you with a reasonably secure alternative to buying, you’ll need to choose the most appropriate lease. There are three main types of tenancy:
- a fixed-term business tenancy;
- a periodic business tenancy; and
- a protected business tenancy, which can be for a fixed term or periodic.
A fixed-term tenancy runs for a set period of time before ending, whereas a periodic tenancy will continue unless steps are actively taken to terminate it. A periodic business tenancy provides more immediate flexibility, allowing you to leave the premises on notice, rather than taking out a long fixed-term tenancy, so may be a more suitable option if flexibility is a priority.
See Choosing between protected and unprotected tenancies for a comparison of your main rights and responsibilities under protected and unprotected tenancies.
4. Protect your IP
It is imperative that you have sufficient safeguards in place to protect your intellectual property. If you do not do so, you’re more vulnerable to having your designs, work or inventions stolen or copied. Safeguards can include trade marks, NDAs, copyright, design rights and patents.
You can register various types of trade marks, including names, logos, shapes, sounds and motions. It is a sensible idea to register your business’s name and any logo as trade marks to prevent competitors intentionally or inadvertently copying your brand.
For more information on protecting your IP, you can use our Protecting IP and confidential information toolkit.
5. Make sure your cookie banners are right
If you use cookies or similar technology on your website or app, you’re required to explain (in a user-friendly way) how you use them, and to request the consent of users for most types of cookie use the first time they use your website or app. This could be by having a banner or pop-up window in a clear and prominent place on your site,with some form of button to acknowledge the policy. The mechanism you use to obtain consent should contain clear information about your use of cookies, including their purpose and duration, and you must make it as easy to reject non-essential cookies as to accept them. You should also link to your cookie policy, where more detailed information can be set out.
For a template cookie policy that you can use on your website, see our Cookie policy.
6. Have the right employment contracts in place
You’re legally required to provide every employee and casual worker with a written statement of their basic terms of employment (eg pay, hours, holidays) on or before their first day of work.
These written terms do not have to be in the form of an employment contract, but an employment contract is usually used to provide all the required information and ensure that there is no confusion about what you have agreed. A good employment contract will go further than the basic written terms of employment required by law and should include terms to protect your business, such as a requirement to keep your confidential information secret or a term to prevent your employees from working for a competitor for a specified time after ending their employment with you.
For a template employment contract to customise to your business needs, see our Employment contract.
7. Look after home workers
As part of a flexible working request, you may agree for a staff member to work from home on a regular basis (either temporarily or permanently). If so, you’ll need to consider the following issues:
- whether you’ll provide equipment
- whether your insurance covers them
- whether you have addressed the necessary data protection issues and have procedures in place to protect your confidential information
- whether you have you addressed the necessary health and safety issues
- how you’ll manage your home workers
You may also consider implementing a working from home policy to provide clarity and transparency to your staff on these matters. To help you set up a policy, you can use our customisable Working from home policy.
The content in this article is up to date at the date of publishing. The information provided is intended only for information purposes, and is not for the purpose of providing legal advice. Sparqa Legal’s Terms of Use apply.
Marion joined Sparqa Legal as a Senior Legal Editor in 2018. She previously worked as a corporate/commercial lawyer for five years at one of New Zealand’s leading law firms, Kensington Swan (now Dentons Kensington Swan), and as an in-house legal consultant for a UK tech company. Marion regularly writes for Sparqa’s blog, contributing across its commercial, IP and health and safety law content.