Frequently Asked Questions
In order to set up and register your business you need to head over to the government website – https://www.gov.uk/limited-company-formation/register-your-company.
Here, there is an application to fill out that discusses what your business does and who works for you, followed by a necessary payment of £12.
You will need to think about what your company name will be and whether that name is available. It will be necessary to consider if that name will need to be available as a website and whether it is also available.
If you are starting a business, you should be clear about what your business is and what you are trying to achieve.
A business plan is a document you should prepare when you are first starting your business. Your business plan is going to describe what your company does, what your goals are and your plans to achieve those goals including who your target market is and how to appeal to them.
It’s important to have a business plan no matter how big or small your business is as it can help with outlining your strategy and providing you with clarity.
You can find a business plan template at https://www.gov.uk/write-business-plan
Your business plan should include:
- An executive summary
- A description of your company
- An explanation about the market you are looking to join, I.e. why your business is needed.
- Details about management and organisation
- The products and/or services you offer
- Who your target market is
- How you appeal to that market
- · A plan surrounding logistics and operations
Always separate personal accounts and business bank accounts. This will make understanding income and outgoings easier. It will also help with working out taxes.
We are unable to advise on what the best business bank account is, as that will depend on your circumstances, but the following website provides lots of good ideas as of November 2023
There are a variety of sites within the Portsmouth area that can support new businesses. These are changing all the time so please contact a member of the Portsmouth Business Support Service for the latest information.
There are various sources of grants for small businesses, to help you get going. These are changing all the time so please contact a member of the Portsmouth Business Support Service for the latest information.
A business loan is where your business will borrow money in order to function and get things off the ground. With such a loan you can:
- Borrow anywhere between £1000 and £15 million
- Repay the loan over one month or 25 years
- You will need to put together a pitch in order to state why you need the loan and what your business will do with it. Your business should borrow as much as you think it will need to function, but you must be able to pay repay the loan when due and you should be careful in considering whether you have any personal liability, such as a Personal Guarantee or a Second Charge on your home. The amount that different businesses borrow varies depending on what industry they work in. It is worth seeking advice.
There are four key elements to digital marketing – 1) market research, 2) website development, 3) online advertising, and 4) social media marketing.
Digital marketing is important because it allows you to get creative and stand out from your competitors in congested markets. It lets you communicate with your customers in real-time and more importantly, it lets them communicate with you and they also rely heavily on it as a way of finding out about companies.
Think about your social media strategy. It’s great when your target audience sees your latest post, but it’s even better when they comment on it or share it.
There is plenty of support and advice available if you wish to start employing someone, as there is often a lot to think about. These are changing all the time so please contact a member of the Portsmouth Business Support Service for the latest information.
There is also a helpful Government website at https://helptogrow.campaign.gov.uk/employing-people/
Websites are usually crucial to building and expanding your business, in 2020 alone there were roughly 24 million new domain name registrations.
However, it will depend on what your market is and how you want to sell your product as to how important a website is and, if a website is likely to be beneficial, how detailed it needs to be. If you do need to build a website, please contact a member of the Portsmouth Business Support Service and we can provide you with a list of local website designers.
The business insurance that you need will vary depending on what products or services your business offers and whether or not people work for you. Popular choices include:
- Public Liability Insurance – This covers you for any clients who manage to injure themselves at your place of business. It also applies if you damage something whilst you’re working. The policy will cover the price of legal fees and claim costs.
- Employers’ Liability Insurance – Businesses that have employees are legally required to have this insurance as it covers the cost of any claims made from an employee who has been injured or falls ill whilst working under you.
- Product Liability Insurance – This is necessary if you supply products as it can help if anyone suffers an injury or damage as a result of one of your products.
In order to start a business, a general rule is that you should have the following –
- Good market research to work out if there is an opportunity for your business
- An in-depth business plan
- Funding for your business
- A business location (can be online)
- A structure for your business
- A name
- To register your business
Having a clear plan before you start gives you something to aim at, and to measure against.
You are aiming to achieve a profit. A profit margin represents how much your company makes compared to what you are spending. Two of the main types of profit margin include your gross profit and your net profit.
Your gross profit margin means the total amount of revenue your business generates minus the cost of any of the goods. As such, when you calculate your gross profit, you should take the total amount your business has made and minus the cost of the goods sold.
Your net profit is your total revenue minus all of the different expenses you’ve incurred to get it. This means the likes of marketing, interest and taxes. It gives you a good indication as to the kind of profit you’ll be taking home.
A good profit margin varies depending on the industry you work in. Generally, a 10% net profit margin is the average, 20% is high and 5% is low.
Every year, you will need to calculate your profits and pay tax accordingly. If you have employees, you will need to manage their pay and all associated entitlements to include their pension, National Insurance and income tax. While it is for you to ensure this is all done properly, you may find it is helpful to engage with an accountant or use an online accounting package to help you with these obligations.
There are important legal issues for you to consider to include:
- What contractual arrangements do you have to ensure you can collect the money for the services or goods you provide.
- If you run a company, how is that company set up and does it do what you need it to do, and what will happen if the relationship between the shareholders changes.
- What is your arrangement with any employees There are lots of online resources available but we can recommend a number of firms of solicitors locally to help such enquiries, to include
When starting a new business, a mentor can help achieve clarity on your business plan, help set sensible goals and can be a good source of support on what can be a daunting start to a business.
We have mentors from various local businesses, who have agreed to provide 6 hours of mentored support for new businesses. Please contact a member of the Portsmouth Business Support Service for an introduction.
According to research in a national newspaper, 60% of all new businesses tend to fail in the first 3 years. We are providing this service to ensure you avoid being in that 60%, and you are able to start a thriving and enjoyable business – but it is helpful to be aware of why some businesses do fail, so you can ensure you don’t fall into the same trap.
- 42% fail because there isn’t a need for the products or services they’re offering
- 29% fail because they run out of money
- 19% were beaten by competitors
- 18% failed because they priced their products or services poorly
- 14% failed because they were unable to market themselves effectively
We are here to avoid these issues – so please do contact a member of the Portsmouth Business Support Service to help your business to get off to the best possible start.