The Complete Guide To Starting A Business

So you’ve got a great idea for a new small business venture. But what next? AXA takes you through the process of starting a business, start to finish.

You’ve had an idea for a business. It feels right, you’re excited to make it a reality, and everyone you’ve mentioned it to has been really supportive… but now what?  

How do you turn this exciting idea into a viable start-up small business?

Last year, small businesses accounted for 99.3% of all private sector businesses, with SMEs accounting for 99.9% of the total. There were an astonishing 5.7 million private sector businesses at the beginning of 2017, an increase of 197,000 since the previous year.

*Video data from The Startup Report | AXA UK

But how do you get ready to join this growing sector?

At AXA, we’ve helped thousands of British businesses get off to a good start. That’s why we’ve put together this guide to help you turn your idea into a real, living business.

Ready to turn your idea into a reality?

Getting started

Get started:

The first steps to starting your own business

If you’re feeling ready to take the business plunge, let’s test the water first.

Before taking your proposal forward, have a look at how you can test and refine your idea to make sure it’s financially viable.

Check for originality

So your new business venture seems perfect. However, if it's a really good idea, there could be a chance that someone else has already had it. It's usually a good idea to ensure that your concept is original; you also need to ensure you're not treading on anyone's toes in a legal sense.

If your business plan involves an invention, consider getting a patent. This is not always easy (or cheap) and can require expert legal support. Have a look at the government's guidelines before embarking on this route, and make sure you search patent databases to see if your idea truly is original (you can search for patents by number or type, or carry out a patent search on Google).

You should also check that your new business name and logo aren't infringing on any existing trademarks. In the UK, the Intellectual Property Office oversees trademarking, copyright and patents, so have a look at their website before naming your business or products. Again, an internet search can help establish whether your business name is already taken.

Research the market

Your friends and family all think your idea is marvellous - of course they do, they support you. But how do you conduct market research to get objective feedback on your idea?

Market research involves taking a close look at your location, area and the type of customers you want to attract. There are various types of market research, divided up into "primary" and "secondary".

Primary market research for new business ideas involves finding out about the market first-hand, usually through questionnaires or focus groups. A social media survey is an easy way of getting quick answers. For example: "If there was a bakery in Smalltown, would you use it?" From this simple beginning, you can start to delve deeper. Time for a coffee? You can put a shout-out on social media local pages for people who are willing to spend half an hour discussing your ideas. Work out in advance what you want to know, book a table in a local café, be generous with the biscuits, and simply listen.

Secondary research is more desk-based. A lot of DIY market research for small businesses starts off on Google, where you can easily find out about the competition. LinkedIn and Glassdoor can provide useful information as well. For demographic information, the Office for National Statistics website has every stat you could possibly need.

If your new venture involves a substantial investment, it can be worth paying a market research company to help you. Have a look at the Market Research Society's website to find approved researchers.



What is a SWOT analysis?

This time-honoured business tool lets you identify your business' Strengths, Weaknesses (internal influences), Opportunities and Threats (external influences). One of the real benefits of a SWOT analysis in business is that it really makes you think about things - and if you can get others to brainstorm it with you, even better.

You can find a SWOT analysis template online which will help you to order your thoughts. In brief, here are some areas that a new business SWOT analysis can cover:


Your unique, specialist knowledge and how this sets you apart from the competition. Don't be bashful: if you are the most qualified electrician in a ten-mile radius, say so.


Are you lacking resources, certification or experience in any area? How can you mitigate these weaknesses? If your location isn't ideal, can you make up for poor footfall with excellent marketing?


That holy grail of "a gap in the market": you could be the only shop in the village. Other local business developments may help, such as a new office park that needs sandwiches or window cleaners. Are there new IT developments that you can seize upon, for example platform-based technology?


Is your business dependent upon another organisation (think about the small businesses that struggled after the Carillion collapse)? Can the economy impact, for example, rising costs of food imports? What external forces is your business reliant on, that you can't control?

How to make a business plan


Your new venture needs a business plan for two main reasons: to secure funding, and to keep your business on track. Here are the main contents of a business plan - and remember to keep it concise and simple.

Executive summary

The one-page summary gives a snapshot of your business to potential investors, staff or advisers. This covers your business offers, a brief background, the target customers, the competition, the team and resources, and a financial outline.

The business

Explain the problem you have identified and how your business provides the solution. Identify and describe the target market. For example: there are a lot of time-poor dog owners in your town, and you can offer a professional walking service for busy professional dog owners (but add more detail).

Marketing and sales

How you plan to promote your business and reach your target market (for example social media advertising). What will you charge for your product or service?

The team

Who is already on board, and any other positions you plan to fill. If it's just you, include a paragraph about your background and skills. If you are hiring sub-contractors, put them on this page too.


The daily nitty-gritty. What do you need to run your business? Include details on the premises, vehicles, IT, tools and so on, with associated costs, maintenance and lifespans.


As a new business, this will be mainly forecasting for your first three years. Your bank's small business adviser can help you put together a realistic forecast. Put a more detailed summary (profits, credit, debtors, interest, contingency) in an appendix.


This is where you can out any more detailed documents: a fuller financial summary, your SWOT analysis, an operations plan (how you will reach your objectives), job descriptions.

Find a business mentor

Striking out on your own can be lonely, especially if you’ve come straight from a busy workplace. Self-employed people sometimes struggle initially from a lack of people to share their thoughts with – you may even discover that you miss having a boss for advice!

One solution is to find a business mentor. A mentor is an experienced professional who is there to guide, advise and encourage you on your new venture. Why have a business mentor instead of engaging a business consultant? Mentoring provides a more genuine relationship, and apart from coffee, needn’t cost you anything. In return, the mentor has the satisfaction of helping others, while developing coaching and interpersonal skills.

So how do you find a business mentor? Usually, mentors and mentees already know each other: your mentor may be someone from a similar business who inspired you to take the plunge. Look out for networking events, or search on LinkedIn for someone with the right background. Try the mentorsme website, where you can search for a willing mentor based on your location and business life stage. Read more about the value of mentoring here.

Getting serious

Get set up:

How to set up a business

The background research looks good - now there's no excuse. It's time to get serious about starting your business.

You've refined your thoughts, looked deeper into what's involved and have a beautiful business plan ready to go. Now let's look at some of the practical details you should get in place next.

How to apply for a patent in the UK

As discussed earlier, if your business involves designing or manufacturing a new product, you'll need to apply for a patent. A word of warning: the patent application process can literally take years, so think about the implication this has on your timeframe and launch plans.

You've checked patent databases and created a business plan, which hopefully includes financial planning. At this point, many inventors approach a legal expert to help them with the application process. The Chartered Institute of Patent Attorneys has a database of recommended attorneys.

If this sounds drawn-out and beyond your budget, you could go down the registered trademark route instead, and focus on building a strong brand this way. You can also register a design rather than patent your invention, if its appearance is important. Have a look at the Intellectual Property Office's website to work out your options.

Business licences and permits

Many small businesses require licences and permits to operate. The best starting place is the government's online licence finder. Simply complete the online form, and you'll be told what you need to apply for.

Some licences are obvious, such as one for selling alcohol. If you're setting up any business that involves selling food and drinks, start by looking at the Food Standards Agency website, then contact your local council for advice. It's worth establishing a good working relationship with your local authority from the outset, and they'll be there to advise you throughout your business's life.

Watch out for hidden licences too. Did you know, for example, that if you want background music in your shop, you'll need a PRS licence? The government's website will help you to make sure that you don't miss anything. Professional bodies, such as the Nationwide Caterers' Association, can also give you advice on the specific licences and permits you must have to trade legally.

Business ethics and laws

There are numerous business laws in place to protect both you and the customer. From distance selling to data protection, many of your daily operations are covered by the law. Happily, there are also several very helpful websites and organisations to steer you through these rules and regulations.

The Food Standards Agency can guide you on everything from production to packaging, as naturally there's a lot of legislation around food safety. If you work in retail, you'll need to know the Consumer Rights Act (2015) inside out, and be up to speed with online sales regulations if you offer that service. If you're storing personal details, make sure you understand data protection regulations.

The workplace advisory service Acas can give you free help with regards to employment law: have a look at their helpful website. For the trades, add complex health and safety regulations to the list. The Health and Safety Executive is a great starting place.

Limited company, partnership or sole trader?

What form is your business going to take? Will you be a sole trader or partnership, and what are the benefits of a PLC approach? Here are the various forms of business ownership:

Sole trader

Setting up as a sole trader is the quickest and easiest. Yes, you're personally responsible for any debts, but you can also maintain control of your accounts. You must keep meticulous financial records and complete a self-assessment tax return every year. You'll pay income tax on your profits and class 2 and 4 National Insurance.

Business partnership

A business partner is a good way for two or more of you to share the business' profits and responsibilities. You each pay tax on your share, but the "nominated partner" takes charge of the accounting and reporting.

Limited company

If you form a limited company, you're not personally liable for any debts; however, there are increased management responsibilities. You'll need to register your business name and address with Companies House ("incorporation") and appoint one or more directors and shareholders. Many

Business name registration

Once you have made sure your business name doesn't infringe on any trademarks, it's time to check that it's an acceptable name. This means it can't be misleading (suggest you have a qualification or status that you don't have) or contain a "sensitive" word. Have a look at the government's guide to naming your business .

At this stage, it's worth making sure that you can also secure the website address for your chosen name - it's a real business advantage to have a URL that's as close as possible to your business name. Run your name through a domain checker such as 123-Reg.

When you're happy, you can make it official and register your name. The process varies slightly depending on whether you are a sole trader, partnership or PLC - you can find out more here.

Setting up a business tax account

Nobody likes talking about tax, but managing your own taxes is simply a fact of life if you're self-employed. Register as self-employed with HMRC as soon as you can. You'll also be enrolled for online self-assessment at the same time.


If you've set up as a limited company, register for corporation tax within three months of starting up (and in HMRC terms, "starting up" can mean acquiring your premises rather than your first sale, so make sure you register as soon as possible to avoid a fine). You will need to file an annual company tax return (or your accountant will on your behalf).


'Allowable expenses' are essential costs to keep your business running, and as such, they are tax deductible. You can use business expense tracking software such as Wave's free financial software to help manage this.

The rent on business premises is an allowable expense; and if you work from home, you can claim a proportion of your household running costs. What proportion of your mortgage and utility bills go on work time and on "home" time can be quite tricky to work out: have a look at the government's simplified expenses calculator. Some financial costs also count as allowable, such as professional indemnity insurance, and some bank and card charges.

What can't you claim? Travel is one to keep an eye on: you can't claim for your daily commute, but you can for the journey to visit a client. Use a flat rate for mileage unless you've already claimed your van or car as a capital allowance (a business asset). If you've previously been employed in a job with an expense account, forget about those halcyon days: you're picking up the whole tab yourself now. You can't claim back any fines, even if that parking ticket was due to a meeting over-running.

To find out more, have a look at our guide to allowable expenses.

Business insurance

Getting the right business insurance is essential for your new venture, and different company types will have different insurance requirements. A product like AXA's start-up insurance works with most new businesses, and gives you a supportive insurance package for those early days, helping you develop and change as your business grows.

Most businesses need public liability insurance, which protects you from claims from customers. If you have employees, or work with freelancers or volunteers, you must get employers' liability insurance cover for at least £5 million. It's worth looking into specific insurance such as shop insurance to cover your contents and have a look at our business insurance by occupation options, which are tailored especially for your trade. Never wait for things to go wrong before getting insured - it really does need to be one of the first practical things you get in place.

Getting help

Get help:

What business support will I need?

There's no such thing as a "sole" trader. All businesses are built on collaboration and advice.

Even if you're setting up by yourself, it's unlikely that you're truly solo. So, who is going to take this business journey with you?

Hiring your first business lawyer and accountant

From applying for a patent to working out expenses, these helpful professionals are key in the early stages. Don't feel daunted by their professional status: they're here to help you navigate the more specialist areas of running your own business.

One of the best ways to identify a suitable lawyer or a business start-up accountant is via word-of-mouth. Ask other local businesses who they've used, and whether they'd recommend them.

However, unless you prefer a face-to-face meeting, don't feel that your accountant must be local. Accounts can easily be managed over email and the phone, and you can use cloud-based software. You may want to look for an accountant who's registered with a body such as ACCA.

While your accountant will soon become a regular presence in your life, a solicitor is usually there for more one-off projects, such as checking contracts, property issues or employment problems. There are benefits to having a local lawyer, as legal issues can be easier to discuss in person. Look for firms with experience in businesses like yours (both in terms of size and trade).

Hiring employees

What should you consider before taking on your first employee? Firstly, do you need to employ staff? If you're a mobile hairdresser or freelance writer, maybe not. However, for many small start-ups, it's simply not possible to go solo.

Yes, you may be able to run a small shop on your own (with a strong bladder and a kettle to hand), but what about holidays, or trips to the cash-and-carry or accountant? Plus, an assistant frees you up for the more strategic planning and financial sides of your business.

So, you need an extra pair of hands. You have a few options. You can hire employees, bring sub-contractors or freelancers on board when you need them, or employ family members. It's a case of looking at the tasks that your business requires and establishing how much time needs to be devoted to each one. Some jobs, like gardening, are seasonal, so taking on sub-contractors when you need them may be an appropriate option. You could also bring in expertise when you need it, such as hiring a freelance marketer to launch a new product, or a virtual PA when admin get busy.

Of course, you can always learn new skills yourself, rather than pay someone else to do straightforward tasks for you. Ask any small business owner, and they'll tell you how they became a jack-of-all-trades in their first few months.

Becoming an employer

If you've decided that you need to hire staff, great - you're building a team and helping the local economy. However, this means you'll find yourself with a new raft of legal responsibilities as an employer. There is health and safety to take into consideration, and by law, you need to have employers' liability insurance. If you're not up to speed on employment law, contact Acas or look at their very helpful guides and templates. There's a lot to consider, including working time, equal and fair treatment and making sure recruits have the right to work in the UK. Consider getting a lawyer to help draw up that first contract.

You'll need to manage payroll (although you can outsource this to a specialist payroll service) and sort out employers' National Insurance. For enrolling your staff into a pension scheme, seek advice from the Pensions Advisory Service.

Don't forget all the other practical measures you need in place. You may need the right uniforms, equipment, IT and desk space for your staff. Do you have a space where they can take a break? What are your contingency plans for sick leave and holiday? This will all seem business-as-usual soon.

Invoice management

This is a real business essential - invoice management best practice ensures you get paid. As ever, there are different options based on your time, budgets and experience. To be honest, learning how to write an invoice is one of the most straightforward skills a rookie business owner picks up, so you can do this yourself with a template and an Excel spreadsheet.

In brief, your invoice needs your business name, address and (if applicable) VAT number. If you're a PLC, you'll also need your company number. Also include the name and address of the person or company you're billing. Itemise the products or services, give a final total, and then, if applicable, add the VAT. Don't forget to include bank transfer details. Date the invoice, so you know if you need to chase it.

If you don't employ an accountant, whoever keeps track of the books - whether it's you, a member of your staff or a family member with a head for figures - they need to keep clear records of who owes you, the amount they owe you, when the invoice went out, when it was paid and if it needs chasing.

Take advantage of invoice-producing software such as Wave's free online package. This will automatically generate invoices (which you can customise with your brand) as well as flagging late-payers. If you're going for DIY invoicing, this can really help.

Allowable costs for employers

As we discussed earlier, self-employed people can claim tax deductible allowable expenses for those essential costs that keep our businesses going. Common expenses include tools, stationery, IT, uniforms and rent.

But does this include paying for staff? Yes, in some cases it does. Have a look at the website for further details, but to summarise, you can claim for salaries, pensions, benefits, NI and bonuses. Agency fees and subcontractors are also included. You can also claim allowable expenses for professional fees (including accountants, lawyers, architects and surveyors). If you're working with a web developer and designer, this also counts as allowable business expense.

However, bear in mind that you can only claim staff costs for those who work directly for the business: a secretary is covered, a cleaner for your home isn't. Childcare is not an allowable expense (although many would argue that this is an essential cost!).

Getting funded

Get funded:

Finding the right business funding for your venture

Crowdfunding, grants or business angels - how are you going to fund your venture?

By now, you're well on the way to launch day. You've got a name, a team behind you, HMRC knows your company exists (well, life's not perfect) and you're up to speed on your legal obligations. It's time to think about potential investors for your new business.

Financing your business

How are you going to fund your business? You may have savings, or the profits from selling a previous business, or money to invest in a new venture. Or you may have very little except a business plan and a good idea. If you fall into the last group, how are you going to attract investors?

That business plan we wrote earlier becomes your essential document. This is the evidence that shows your bank that you're worthy of a loan, or a possible investor that you know what you're doing. Writing your plan gave you an idea of how much investment you need to get started. If you're a private piano teacher, your new business costs won't be much more than your current keyboard and public liability insurance. However, if you're planning on opening a garage, you'll need a lot more in place.

As well as coming up with a start-up figure, you need to bear in mind how many shares in your company you're willing to give up. We've all seen Dragon's Den and are familiar with the negotiation over percentage shares. How much control are you willing to give up? If the answer is "none", you are better off speaking with your bank about business set-up costs.

Perfecting your elevator pitch

What is an elevator pitch? It's a concise and compelling description of your business idea, intended to grab a potential investor literally in seconds. The logic behind this comes from the hypothetical scenario of the enthusiastic entrepreneur sharing an elevator with the CEO or other potential investor. The entrepreneur has the time it takes the lift to reach the CEO's floor to deliver a persuasive sales pitch.

You never know when you will find yourself in a lift with a possible investor, so have that elevator pitch ready to go. But your idea is massive! How can you possibly do it justice in a thirty-second speech? Stick to these key points: introduce yourself and your business, say what you hope to do and how your business idea solves a problem. Finish with an open-ended question to engage their interest and encourage dialogue. Time your pitch until you've whittled it down to half a minute and practise it. Have your business card ready to hand out.

There are plenty of elevator pitch templates online, and some great elevator pitch examples and tips in this article.

Pitch a start-up business with a longer presentation

Your elevator pitch was a success, and you've been invited into the boardroom. Or, a potential investor has been in touch and wants to find out more. If you're pursuing a bank loan, you need to impress the branch business manager. You're going to need a bigger pitch.

The typical structure is the same as the elevator pitch: introduce yourself, explain the problem, introduce your idea and describe why it solves the problem. Use storytelling to help potential investors see how your product or service can be practically applied. Think about writing a pitch where your business is the hero who saves the day (and is the only one who can). The wedding dress that tears the night before the big day? Call the 24-hour mobile emergency wardrobe repairing service!

Keep your story visual, with photos or product prototypes. This breaks it up and helps to hold attention. Always back up your ideas with figures: prepare a handout so you don't have to remember all the numbers (and keep a copy for reference during your pitch).

Never lose the skill of how to pitch for business. In many trades, this will become an everyday part of your work.

Business networking events

We're all used to jumping straight to Google when we want to know about another business. However, good old-fashioned networking events are an effective and far more personable way of meeting potential investors, partners and clients (although hunting for staff is definitely frowned upon).

What are these gatherings, and how do I find networking events near me? Your local Chamber of Commerce is a good place to start researching networking events in the UK, and LinkedIn is extremely useful for researching events and contacts (a LinkedIn account is pretty much an essential for a rookie business person). can link you up with like-minded professional events, and you should also look out for retail fairs and expos.

If you have found a mentor, they should be able to help you discover relevant events, and perhaps can help with those all-important introductions. Don't forget to practise your elevator pitch and pack your business cards.

Business funding ideas

These days, you don't have to head straight for the bank or the conventional business investor to get your start-up off the blocks. Online crowdfunding platforms such as Kickstarter are innovative ways to secure funding. As well as raising money, you'll also engage with enthusiastic people who are behind your idea. It does require work on your part - you'll need to create an engaging pitch, manage your campaign page and keep communicating with your community. But for some start-ups, this effort has paid off.

An "angel investor" is a successful business person or affluent individual who wants to help a fledgling company. You can connect with an angel online (on platforms such as this one) or strike it lucky and meet one at a networking event. This can go hand-in-hand with mentoring and is often purely altruistic.

To find out other possible funding routes, have a look at the helpful Better Business Finance website. The government's website also has some very helpful suggestions for local funding, as there are specific grants available for new businesses in certain areas.

Getting the word out

Get the word out:

Spreading the word through small business marketing

If you tell them, they will come… Marketing your business effectively will let customers know you're out there.

We're ticking so much off the list… Your business has everything in place and is ready to be launched into the world. But does the world know that you're open and ready for business? Thanks to social media and online advertising, letting your market know about your new service or product has never been easier. Here are a few tips for spreading the word.

Building a business website

A website forms the basis of many modern marketing methods. For a start, with most of your customers using search engines to look for businesses, a website is pretty much an essential. As well as informing your customers about your business, it's a powerful marketing tool. Send traffic to your website from your social media accounts and create shareable blogs that establish you as an expert in the field. It also gives you the opportunity to develop a remote sales side to your business.

Designing a business website is easy. You don't need advanced tech skills to create your own free website with WordPress or Wix, which both have a great range of templates to suit your business and brand. You've already chosen a domain name to match your brand, but you'll also need to set up website hosting.

Alternatively, you can get a business website professionally designed and built (and remember, this is tax deductible). Outsourcing to an expert helps if you're short of time, really don't like the idea of a DIY site or have more complex needs (for example, you're running an online store). Speak to a few agencies or freelancers, and choose one based on their previous work, their prices and whether they really listen to you when you explain the brief.

Paid social media advertising

Some 78% of British adults have a Facebook account: that's probably a large chunk of your target market. Having a strong Facebook presence just makes sense - have a look at our guide to paid social advertising on Facebook to find out how this can help you. You can set up a specific campaign (for example, Valentine's Day offers), a targeted market (single people in their twenties), a daily budget and a campaign end date (very important on a time-sensitive campaign like a Valentine's promotion). It's flexible and easy, and cost-effective if you set your budget wisely.

Depending on your market, you may feel a Twitter advertising campaign is more suitable, and for designers, restaurants, artists, florists and tourism businesses, photos and videos on Instagram will speak the right language for your customers. Flexibility is one of the real advantages of social media advertising, as you can regularly review and change your ads based on their performance.

How to set up Google My Business

Google My Business is a great way of building an online presence for even the smallest business. It's essentially a free listing that displays all your business's details, right down to your opening hours. Your listing shows up on Google's pages and maps when people search for you, making it simple for customers to discover you. It's super-easy to register with Google My Business, and even easier to use - and you can change your details at any point.

To find out more, we've set up a step-by-step guide to getting on Google on our Business Guardian Angel pages.

Business speaking opportunitiess

Never miss a chance to publicise your business. We mentioned network events earlier: if you can speak or have a stall at one of these, you'll have a great opportunity to showcase your offer. Build relationships with your local Chamber of Commerce and find speaking events in your field via

As well as professional events, keep an eye out for expos and fairs that suit your brand, product or services. Careers fairs and speaking events at colleges also expand your profile with the local market (while also helping your business engage with the community).

Pitching your business to clients

The idea of "cold calling" brings many of us out in a sweat. It shouldn't. For a start, you can cold pitch to clients on email these days, which makes it far less daunting. If there's a company you'd really like to sell to or have a contract with, do your research before you email them, and identify the right person to address your email to. Put some thought into a compelling subject line that doesn't sound like spam. In the body of the email, address a problem that company may have, and explain how you - and only you - can solve this. If you don't hear back, follow up after a week.

You can also build a customer database, and send out e-newsletters, which is a broader way of pitching to a lot of clients. Try a service like Mailchimp for e-marketing. Make sure you harvest and keep customer data in line with regulations for data protection, and add an unsubscribe link to every email.

Getting going

Get growing:

Putting it all together – Launching a successful business

As you can see, it is possible to take that great idea and turn it into a viable business. By looking at a series of business must-haves one at a time, you can break down all the components into do-able tasks. If it seems daunting to turn your idea into a real-life business, simply take it one step at a time.

Like any building, a business needs strong foundations. By having a solid financial and legal base, with marketing, staffing and advisers all in place, your business stands a good chance of success.

We'll be with you as you build on this foundation. As well as our tailored insurance for start-ups, there's also our Business Guardian Angel, a series of guides and blogs that talk about the issues that matter to small businesses. AXA has your back - and we can't wait to see how your idea develops.

All businesses start with a story. Protect yours.

Starting a business isn’t easy, but protecting it is. 47% of the small businesses we protect are start ups*. So protect your business’ first steps with AXA.

Find out more about insurance for startups

*Based on AXA business and shop insurance policies as of June 2017. 'Start up business' defined as being less than three years old.