Starting up your new business, what you need to know.

Posted on 4th March 2021 by David Rudd

Person starting up a business

Setting up a new business can be daunting, but by taking the right steps and applying the right structure early will give you the best possible chance of success.

Our 5 top tips are here to help:

1) Plan before you start:

When starting a new business, it’s essential that you consider what you’ll need, and what your business will look like. The structure of your business is an important consideration and can have lasting implications for your future, whether your intention is future sale or passing onto your family.

Whichever you choose will change the sort of tax you pay.  The options are: 

  •   Sole trader – you’ll be taxed personally on profits earned, with personal tax due 31 January (and potentially 31 July) after the end of your year. 
  •   Partnership – personal tax will be due on your share of the profits, again with personal tax due 31 January (and potentially 31 July) after the end of your year

NB a great tool from HMRC to plan for personal tax can be found below:


  •   Limited company (Ltd) – legally a different entity to you and your personal assets.  Tax for the company profits is payable 9 months and 1 day after the year end.  Potentially there is personal tax to pay on your income from the company.
  •   Limited liability partnership (LLP) – similarly to the Ltd option, legally separate from you and your assets.  However, the tax due will be on you personally, with payment dates of 31 January (and potentially 31 July).

We always suggest setting up your business from the start in a way that you can flex into the future will be worthwhile.

Cash will be king for the first few years, so automated collection is worth looking into. Try to look at the approach that your aim for the business is for it to run without you (one day).  This means automation and documentation of how you do what you do are critical.


2) Finding the break-even point:

This figure will be an important indicator of when your business begins to make a profit. One way to work this out is a cash-flow analysis.  This will look at your fixed costs (those you have to pay regardless of how much you sell), variable costs (those which fluctuate with activity) and profits (one of your key indicators of how well your business is performing).

The idea is to get to the stage where you know how many products or hours you need to sell to cover the costs of running your business.

A great idea is to have a weekly or even daily, breakeven number.  This makes targets easier to achieve.


3) Small Budgets:

There is no doubt, setting up a new business will be hard and you’ll usually be on a tight budget.

A key difference between being employed and running your own business is when tax is paid.

Our advice to any business is to plan ahead.  As a business start up, if you are putting aside your estimated tax each month, the first tax bill will become less of a surprise (bear in mind that your first personal tax bill will be 31 January, so right after the festive period!).

Using cloud accounting technology to automate as much of your bookkeeping as you can will not only save time but also give you visibility on your profits.

It is important to start your business with a clear marketing strategy.  Using social media is a great start.  Building an audience of potential customers via Twitter, Facebook and LinkedIn can be achieved fairly quickly with minimal costs.


4) VAT:

In the early days of your business, you may need to consider VAT registration, which we’re able to help you with here at Steven Burton.

This is a tax is added to goods or services sold. The standard rate is 20%, however, some goods have a reduced rate.

You can register for VAT voluntarily, but you need to consider your customer base.  Will your customer base be the general public?  If so, this could mean your price will need to be increased by 20% to account for the VAT you need to pay to HMRC on sales made.

Before you move forward with anything related to VAT registration, we recommend speaking to us first.  We can then help you to navigate the best route for you and your business.


5) Business rates:

If you run your business from a non-domestic property, you could be liable to pay business rates. This is similar to council tax, in that local authorities will let you know what you need to pay. These rates are calculated by the Valuation Office Agency on a ‘rateable value’, or its estimated market value.

A rateable value between £12,000 and £15,000, may be eligible for relief.  A value of below £12,000, may mean you have no liability to pay.

We hope these tips help you and your new business to navigate through the start of your lifecycle. If you’re looking for more advice like this, someone to bounce ideas off or a helping hand take a look at our startup support service.

Having questions at this stage is completely natural, feel free to contact our team as we have helped a number of clients in a similar position to you, where we have helped to maximise profits and mitigate liabilities.

David Rudd

David is an Accountant with over 15 years’ experience in helping a large number of different business owners in numerous sectors from consulting agencies to every area of construction you can think of.

At home dealing with numerous different types of accounting software from Xero to QBO and everything in between.  David is always on the lookout for new technology to help business owners to create more time for themselves and their teams.

With a healthy ambition of never resting on the results of yesterday, David is at his best when working with ambitious business owners who want to improve their businesses for eventual sale.

In his spare time, David is often found cheering on his two boys at football, building Lego (which he pretends is for his boys) or watching the latest TV series on Netflix.

Learn More

Built on cloud accountancy:

Get in touch

Our friendly customer service team are on hand to help with any queries you may have.

    We'd like to occasionally send you communications via email to keep you up to date with the latest company information. Please confirm if you would like us to contact you by checking yes or no below. You can unsubscribe at any time.

    This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

    LENA James
    LENA James
    We moved accountants to specifically follow David a number of years ago and have completely changed the running of our business for the better, through planning ahead we have managed to change our circumstances with an over drawn loan account and corporation and tax bills outstanding to a strategically run method of being able to clear the over drawn loan account and balance our other tax liabilities with advice and support from David We continue to be supported and take advice from his expert knowledge and guidance going forward and would highly recommend the Steven Burton team for your Accountancy needs.
    Great service. Helpful and friendly people.
    Vince Strafford
    Vince Strafford
    We moved our accountancy needs to Steven Burton and Co - specifically with David. It’s been night and day compared to our previous provider - we now have a partner who is helping us to develop our business and in a way that means we have long term security. Local, accessible and responsive - everything we need in a company that provides business critical services.
    The team here are fantastic - every detail thought of and explained clearly. I have no hesitation in recommending Steve and the team to any business, be it fledgling or established. You get what you pay for and more.
    Jo C
    Jo C
    The team at Steven Burton & Co have been lovely to work with, helping us with our partnership accounts over the last couple of years. They are always on hand to answer any queries we have and are happy to explain in as much detail as we require. Everyone we have spoken to has been polite, welcoming and extremely knowledgeable and we look forward to continuing to work together as our business grows.
    Sam Nagle
    Sam Nagle
    A truly fantastic accountants. Unlike any other accountants we have had in the past. They are 100 percent on the ball, helpful with fantastic advice. Not just sound accountancy advice but advising the business as a whole in various areas. Strategic quarterly reviews to really delve into the business to make sure profit margins are where they should be, and if they aren’t, they’ll look into improvements that can be made. Nothing is too much and the phone lines are always open for advice. Unlike most accountants their focus isn’t just on completing your annual accounts and not seeing you again for another year. I cannot praise the team enough for all the hard work they put in! They really have shifted our focus onto the aspects of the business that we were perhaps neglecting!
    Steve Lincoln
    Steve Lincoln
    The team at Steve Burton & Co provide a first class personal service to their customers. They support business owners through every step of the life cycle of their business, adding true value with their relationship.
    Toby Ishmael
    Toby Ishmael
    I work closely with the team at Steven Burton & Co. to assist their clients with a range of services and I can't speak highly enough of the professionalism and care that they demonstrate for their clients.
    Darren Vass
    Darren Vass
    I've worked with Steven Burton & Co for almost 4 years and I cannot fault their service. Dominique in particular is always available for advice and guidance whenever needed.
    Makala Balls
    Makala Balls
    The team at Steven Burton are friendly, professional and really get to know their clients so their advice is tailored to suit their individual needs. Cuts through all the jargon and offer clear and timely advice. Would highly recommend.