How to Start a Business in 2025: 10 Crucial Steps

So, you’re thinking about how to start a business? Congratulations! You’re taking the first step on an exciting journey.

We understand there may be worries about starting a business, but what if we told you that over 92% of small businesses survive their first year? However, after that first year, some businesses can struggle more. The main reason a business struggles is due to poor market research and a complete lack of a business plan.

Therefore, this blog will serve as your all-in-one handbook for starting and running a small business in the UK. We’ll cover all the key steps you should take before launching your business, including crucial topics such as accounting, legal requirements, marketing, finance and a BUSINESS PLAN! (Yes, all caps are necessary).

Of course, as with anything, you could just ‘wing it’ when starting your business. However, if you truly want to achieve results, you’ll need to create a detailed business plan.

So, without further ado, let’s get you started.

 

How to start a business in 2025 (Quick Version)

Want to know how to start a business in the UK in 2025? Let’s go through it quickly before we dive deeper:

• Choose a legal structure.
• Go to the government website.
• Provide key personal information (town of birth, mother’s maiden name, father’s first name, telephone number, national insurance number, passport number).
• Pay a £50 government set up fee.

Now, simply wait 24 hours and you’ll have registered an official business. Congrats!

That’s the basics of getting your business up and running. However, there’s so much more to cover, so let’s break it all down in detail.

 

How to come up with a business idea

Choosing the right product or service to build your business around might initially seem daunting, but it’s quite simple.

The key to success is building your business around something you understand or are incredibly passionate about. Running a business is difficult, so if you’re not fully onboard and passionate from day one then you could be in for trouble.

For instance, if you work in marketing and are passionate about kayaking, with skills in both, starting a construction company probably isn’t the best choice. However, a kayaking coaching service? That sounds like a perfect match.

When choosing your business idea, start by taking a good look at your skills. Think about what you can offer that others may not be able to do for themselves. For example, I wouldn’t pay you to overcook my steak and chips, I’m perfectly capable of doing that myself!

These examples might be a bit extreme, but we’re just trying to drive home the point.

In short, how do you come up with a business idea? By choosing something you’re good at, and even more ideally, something you enjoy.

 

How to know if your business idea is viable

Once you have a business idea in mind, it’s time to do some market research to determine how viable your business will be.

Let’s return to the kayaking instructor example. Suppose you want to start your business in the Lake District. The first question you need to ask yourself is, how many similar businesses operate in that area? If you’ll be competing with twenty other kayaking companies, you’ll need a USP.

USP stands for Unique Selling Point; you’ll often hear marketers emphasise its importance. Your USP is what makes you stand out from your competitors. While a USP isn’t strictly required for a successful business, it increases your chances of growth.

For example, with your kayaking business, you might offer a free introductory session for all new clients, giving them a chance to get a feel for the sport and decide if it’s right for them.

 

How to choose a business name

Once you’ve got an idea of what you’re selling, you’ll need to give your business a name. When you name your business, it needs to be unique. To check your name is available, you can use our name availability checker.

You can choose whatever name you like, if it’s available and not offensive. However, it’s best to relate your name to the business in some way so customers can get an idea of what you do.

Here are some other things to consider when picking a name.

Be aware of what’s not allowed

When choosing a business name in the UK, there are some hard rules on what’s not allowed, such as:

• Anything offensive or rude.
• A name that is the same as an existing name (Example: ‘Nike’ vs ‘Nike Co.’).
• A name that is ‘too like’ another (Example: ‘Easy Electrics For You Ltd’ vs ‘EZ Electrix 4U Ltd.’).
• Cannot have a business name like ‘LTD’ or ‘limited’ as these will be added anyway when you form your company.
• Cannot suggest a connection with the government or a local authority (Example: ‘Manchester Council Plumbers’).

Don’t choose a tricky or unique spelling

A tricky spelling could make your business hard to find and remember. It may also make your company’s SEO harder if you want to build an online presence later down the line.

You can find a name that aligns with user search intent by using tools such as Google Trends or Answer the Public.

Ensure you can trademark it

Before setting up your company, check whether any larger organisations have a similar name. Many big businesses actively protect their trademarks and won’t hesitate to take legal action if they believe your name infringes on their rights.

To avoid costly legal issues, consult a trademark lawyer before finalising your business name. They can conduct a comprehensive search and provide a report outlining any potential risks. Taking this step early can save you from rebranding headaches and legal disputes down the line.

Make sure your domain is available

When choosing your business name, it’s best to be safe and see if that website domain is available first. The cost to buy a domain later can be steep, so it’s worth securing it early.

Don’t limit yourself

Many business owners start with humble ambitions, just enough to live a decent quality of life. But sometimes, businesses experience unexpected success and grow rapidly. This is where a limiting name might become an annoyance later down the line.

Take, for example, BrightonSEO, a search marketing conference that was started in a pub in Brighton and quickly became a massive hit. So much so that they’ve recently started doing events in the old US of A. As BrightonSEO… they’ve made it work, but you get the point.

 

How to create a business plan

Now that you’ve done your research and assessed your skills, it’s time to put together your initial business plan. If you’re seeking early investment or credit from a lender to get your business off the ground, you’ll need to ensure your business plan is solid to secure suitable finance. To help you get a general idea for how these things go, we’ll walk you through what we do for our clients when setting up their business.

When writing a business plan, we follow this playbook:

• Executive summary
• Description of your company
• Market analysis (how viable is your business?)
• Business goals
• Your business offering (what are you selling?)
• Financial plan

Here’s what we consider for each section:

Executive Summary

Imagine stepping into a lift, and your ideal investor walks in with you. You have until they step out to convince them to invest in your business.

When we write executive summaries, we make sure they’re concise and highlight the key points of our clients plan and why we believe it will succeed. Our goal is to entice potential lenders and investors to read on. Think of it as the summary section of your CV and make a strong first impression.

Description of Your Company

Once we’ve captured their attention, we dive into the details. Here, we outline what makes your business unique and answer key questions like:

• What will your company structure be? (Sole trader, partnership, or limited company).
• What will your business be selling? A service or a product?
• What are the general product and service details? For example, at what price will you sell at, and what is the expected cost to produce one unit?

This section gives investors and lenders an initial understanding of your business’s viability.

Market Analysis

This is where we bring our experts to conduct an in-depth market analysis. In your market analysis, we’ll discuss the industry you’ll be operating in in depth. We’ll cover topics such as: the economic outlook for this sector as well its growth.

Investors will want to know how competitive the market is. Think back to your earlier business viability research.

We’ll investigate who your competitors are locally, nationally, and even globally. If you’re entering a highly competitive market, it’s so important to put together compelling strategy to attract and retain customers.

Business Goals

This one is straightforward: What is your end goal with the business? Do you want to grow fast and sell up in five years? Are you looking to build an empire? Or do you simply want to earn enough to live the life you want while doing what you love?

Investors and lenders seek different returns when considering funding a business. If you’re extremely ambitious, you’ll align with investors looking for high returns. If you prefer a steady approach, you may appeal to lenders seeking low-risk investments.

Your Business Offering

This is where we lay out exactly what you’re selling and cover your USP(s).

The main question we want to answer here is: how will you outmatch the competition?

When covering your business offering, we’ll dive into the details, focusing on the five Ws:

• Where will you be selling your product or service?
• What will you be selling?
• How will you be selling it?
• When will you start?
• Why will you customers choose you over your competitors?

Think of this as your Dragons’ Den moment. (Side note: Why do they call them dragons? They’re just investors… anyway).

Financial Plan

The financial plan is the grand finale of your business plan, the section all serious investors and lenders care about.

When presenting your proposal, you’ll need to show you know your numbers inside out if you want to impress. We work with business owners closely, to ensure any of their questions are answered, so they can give a strong presentation.

You should outline the cash flow through your business to show that you can manage debts and pay suppliers on time.

They’ll also want to see well-thought-out first-year financial estimates, that we can prepare of you, to ensure you can hit the ground running.

 

What’s the difference between Investors & Lenders

We’ve discussed impressing lenders and investors with your financial plan, but it’s important to understand the key differences between them.

Investors

Investors are individuals or entities that want a return on their investment, which typically means holding a long-term stake in your business. When approaching an investor, you may need to prepare a share structure that outlines the level of control they will have within your business.

However, just because investors expect a return doesn’t mean you’re indebted to them. If you secure a large investment but your business doesn’t perform as expected, you won’t be obligated to pay your shareholders back. When investors invest, the risk is on them.

Lenders

Lenders also expect a return on their investment (through interest), but once you’ve repaid your debt, your business remains 100% yours. However, lenders usually require you to repay the loan, and if you fail to do so, they may be entitled to seize your business assets and shut down your business. When lenders lend money, the risk is on you.

The difference between investors and lenders is that lenders just want their money back, plus some interest, while investors seek a long-term return on their investment.

 

How to Choose a Legal Structure and Registration

When you start your business, you must decide whether you want to operate as a sole trader, a partnership, or a limited company.

Each option comes with its own tax implications, so let’s run through them.

Sole Trader

Sole traders are individuals who work for themselves. They report tax through an annual self-assessment and pay standard income tax but have different national insurance contributions compared to ordinary employees.

Sole traders also have unlimited liability for the business, meaning that business debts are also personal debts. The government views you, the individual, as the business, so be cautious when taking on debt.

Partnerships

Partnerships operate in a similar way to sole traders but involve two or more people. In a partnership, you and your business partner(s) are fully responsible for the business.

Partnerships can be risky because if one partner can’t pay their debts, lenders can legally require the other partners to cover them. In the worst-case scenario, a lender can bankrupt all partners if one person’s debts can’t be repaid. Partnerships can be simple but quite risky unless you fully trust the other person. For a safer approach, we recommend forming a limited company.

Limited Companies

Limited companies are what our accountancy team usually recommends for those looking to start a new business. We suggest this because a limited company structure allows you to separate yourself from the business’s liabilities, protecting you if the business cannot pay its debts.

Limited companies also pay corporation tax, which is generally lower (19-25%) than income tax (20%-40%-45%). The details of tax within a limited company can be complex, but you can read more in our blog on sole trader tax and ways to reduce it.

Registering Your Business

Once you’ve chosen your desired company structure, you’ll need to register your business with HMRC officially.

Whether you are a sole trader, in a partnership, or starting a limited company, you must inform HMRC.

Registering a business is a straightforward process, which is why we do it for free if you sign up for one of our other services.

The government website provides a regularly updated, detailed step-by-step guide to registering each type of business. You can read more to learn how to:

• Set up as a Sole Trader
• Set up as a Partnership
• Set up a Limited Company

 

How to get funding for a new business

Once you’re set up and ready, it’s time to secure funding to kickstart your business’s success. This is the stage where your business plan will come in handy. In this section, we’ll briefly run through each financing option for your business.

Related: What are the financing options for buying a business?

DIY

A common option for many who are looking to start small or turn a side hustle into a full-time business is self-funding.

To give yourself a good start, you can transfer the money you intend to use on your business into a business bank account; this will show investors and lenders your intent to commit finances to your business.

Friends and family

Another common option for those starting a small business is investment from friends and family.

How you do this is up to you; you may just borrow some money, or the friend/family member helping you out, may want a share in your business in return.

Borrowing from friends and family can be risky, as if you’re unable to pay them back not only does your business face liquidation but your relationship with them may become strained. To prevent this from happening, having a clearly laid out agreement, like a shareholder agreement, will keep things secure.

Government grants and Schemes

If you’re looking for funding with government backing, you can apply for a Start Up Loan.

You can request a start-up loan of anywhere between £500 and £25,000. Unlike a business loan, this is an unsecured personal loan, and you’ll need to pass a credit check to gain access to funding. The loan can be paid back over 1-5 years and currently has an interest rate of 6%.

To secure funding you’ll get free support and guidance with writing your business plan. If you’re successful you’ll also get up to 12 months of free mentoring.

If you’d like a grant for your business you’ll have to meet Innovate UK’s requirements to be allowed access to their grant fund. These requirements are typically aimed at supporting the UK with some of its toughest challenges, such as advancing its civil aerospace sector.

Bank Loans

The classic bank loan is another option for many small business owners and is why we recommend you for a form limited-company.

By forming a company, you can secure the loan against your business and remove yourself of personal liability. However, if you take out a loan as a sole trader you personal finances and assets will be at risk if you can’t repay it.

It’s important to note, however, that you may get a smaller loan with higher interest rates if you take the loan out through a business as there will be less proof you can pay it back.

Many lenders can and will ask you to give a personal guarantee on loans for new business, which would bring back personal liability. Therefore, it may be better to wait until your business has gained some momentum before applying for a loan.

Venture capital and angel investors

If you’re looking for investment without needing to pay it back, you can exchange a share of your company for cash with venture capitalists and/or angel investors.

You’ll need to either have an exciting new idea or, at least, some established business to win if you go down this route.

Expect most angel investors to either loan you the money or request 10-25% of your company’s shares.

Crowdfunding

Crowdfunding is the process of getting many smaller investors, or even your average Joe Bloggs, to contribute to kickstarting your small business.

When it comes to crowdfunding, there are a few options:

Donation crowdfunding: This method of crowdfunding allows people to simply donate some cash to a new business or investment that they believe in and want to see succeed.

Reward crowdfunding: This method typically promises to give something back to those who donate, often in the form of early access to the product or service you will be selling. Reward crowdfunding is quite common in the video game industry, where a developer might offer donors early access or include their names in the game.

Debt crowdfunding: This is where a group of investors may pool their money together to lend to you and expect to be repaid with interest.

Equity Crowdfunding: Just as with normal investing this is where a group of investors may pool their money together to buy a share of your company.

If you’re struggling to attract some big investors or lenders to get your business up off the ground, crowdfunding can be a fantastic way to get started, as smaller donations are more manageable for people.

A really famous example of just how good crowdfunding can be is Monzo. Monzo crowdfunded on Crowdcube, as an exclusively online bank, hitting £1 million in the first 96 seconds of it’s crowdfund. The Monzo example should show that, for your business to get funding, you need to have a unique idea.

 

New business essentials

Now that you’ve got your funding, chosen your name and business structure, and decided what you’re selling, it’s time to get the basics sorted so you can focus on what you do best.

Business bank account

First up is getting your business a bank account, a crucial step in running an organised business. Business bank accounts allow financial separation from your personal account.

If you’re setting up a limited company, it’s be a legal requirement for you to set up a business bank account. So, as a priority, get that sorted!

Accounting and bookkeeping services

When you set up your business, HMRC will want to know how much they should be taxing you. To do this you need to have accounts prepared accurately and on time monthly.

Getting your accounts wrong, or delivering them late can come with serious fines, and do you really have time for that?

At the start of your business, you may be able to find time to do this yourself. However, we highly recommend that, as you grow, you outsource your accounting to experts. Outsourcing will save you loads of time, especially with bookkeeping. A good accountant will also be able to spot tax-saving opportunities that would otherwise go amiss, some examples of these are:

• Designing the right salary/dividend structure for you to withdraw cash tax efficiently.
• Registering for VAT early if it’s useful for your specific circumstance.
• Carrying your losses back or forward to get a tax refund.
• And much more.

In short, a good accountant will save you time and money. A win-win.

Business Insurance

There are eight types of business insurance all serving different areas your operation. Legally only one type of insurance is required, (employers’ liability insurance).

Employers’ liability insurance is there to cover you if your employee(s) become ill or injured during work. You must be covered for up to £5Milion in damages. If you refuse to operate without employers’ liability insurance, you will face a fine of up to £2,500 a day.

You’ll also be fined £1,000 by the government if you are unable to show proof of your insurance certificate upon request.

Build your presence online!

If you want to get customers in this day and age, you’re going to need presents online.

Setting up a website is essential, and easy to do.

Why is it essential? Well, not to sound like your grandad, but everyone is on their phones these days, that’s the only place you’ll get their attention. A website also acts as a hub for customers to learn everything they need know to about your product, service, and business.

How is it easy? This is due to the many companies who have set up to fill this role for new businesses. These companies include:

• GoDaddy
• Wix
• Squarespace
• Canva
• Ionos

Read More: The Best Website Builders for 2025

These options are great to start with, however, they don’t scale well. For a strong website, that you can easy scale with your business, we recommend WordPress. WordPress, lets you build your own site, how you want it. If you decide to go down the WordPress route, you will be best going with a marketing agency to support you in building it.

 

How to advertise your business

If you’ve followed this guide so far, you’ll already be up and running. However, if you’ve noticed a lack of customers, that, dear reader, is where Sales & Marketing come in.

To sell your product, you need to get it into the faces of those who will buy it. Your target market. You’ll then need to find out where they are and what they’re into so you can attempt to join that space.

If we go all the way back to the kayaking example, you could say the target market for that business would be adventurous seekers and outdoor lovers of all ages. If you need support with your marketing, there are countless marketing agencies and freelancers that can help.

Scaling your marketing and sales is crucial. At the start, it’ll probably be you handling it, but as your business grows, it’s highly unlikely you’ll have the time to keep up with your marketing efforts. From the beginning, it’s important to plan for scaling your business appropriately. As we’ve mentioned, agencies are a great way to start, and as your business grows, you can assess whether you’d like to hire an in-house marketing manager to handle lead generation.

Reviews

One important thing to consider when starting out is reviews. Positive reviews are the lifeblood of a start-up, as they show your are a credible business that offers quality products and services. Reviews go both ways; however, starting with a handful of 5-star reviews can skyrocket your business to success. On the other hand, receiving a few 1-star reviews from the outset can destroy your business before it even gets off the ground.

That’s why it’s crucial to actively ask for reviews when you know you’ve provided a great experience. A simple follow-up message or reminder can make all the difference in building trust and attracting new customers.

Use your network!

Another great new starter tip is tapping into your existing network. Do any of your friends or old co-workers enjoy kayaking? Invite them down at a discounted rate, or free if you have too.

Getting those first few customers will help you build social content, get reviews, and gather some pictures for your website. Gathering early content will help you look like a real, active, business.

 

Scaling a business

Now your business is running smoothly.

At this point in the article, your business should be fully up and running and you should start building steady revenue streams. But what if things really take off?

At this stage, business owners can feel overwhelmed by the endless possibilities that come with success. Here are some common problems that come with scaling a business, as well as some solutions to dealing with them.

Wearing too many hats

In the business world, wearing a ‘hat’ typically means taking on a role in a company. For example, if you were head of both finance and marketing, it would be considered wearing two ‘hats’ (doing two jobs).

For many new business owners, they’ll start off wearing loads of different ‘hats’ which can be manageable at the start, but if the business starts to see success, the just isn’t enough time to do the following:

• Finance & bookkeeping.
• Marketing & social media.
• Servicing clients.
• Manufacturing or making products.
• Customer service.

It’s at this point, where you will have to decide, turn down work to keep on top of everything yourself or start hiring/outsourcing jobs. Outsourcing the stuff that’s slowing you down will free up your time to work on growth.

If we go back to the kayaking example again, this individual may be good at kayaking and marketing but without outsourcing, they’d be spending hours doing double-entry bookkeeping; Not exactly why they started the business.

In fact, it can often be cheaper to hire someone to take on a task than to do it yourself. Sounds strange, right? But think about it. As a business owner, you’re likely on a director’s salary, earning a decent amount. Now ask yourself: would you pay someone else what you’re earning to do this task? In many cases, like bookkeeping, the answer is probably no.

So why are you still doing it?

There are plenty of time-consuming but low-impact tasks that can be easily offloaded to a new hire or outsourced, things like bookkeeping, answering calls, or general admin. The more high priority low impact task you get off your plate, the more time you have to focus on high-value work that actually grows your business. This method of organising is call The Eisenhower Matrix

But why do some business owners not do this?

Letting go of control

Because they don’t want to lose control. We get it, your business is like your baby, and you don’t want to trust the responsibility of it to someone else.

But let’s be real: someone who has spent years studying accountancy and working as an accountant will do a better job of preparing your accounts and saving you tax than you.

Learning to delegate isn’t about losing control, it’s about gaining more time to focus on strategy and growth.

Expanding revenue streams

For small business owners to succeed, the long-term goal should be to eventually remove themselves from the front lines. For the kayak instructor, this means hiring other instructors to run classes, while the owner works on improving operations.

To increase the rate of expansion, building passive revenue streams is key. For the kayaking business, the owner could look at:

• Selling branded merchandise (wetsuits, paddles, apparel).
• Creating online courses for beginner kayakers.
• Selling books or travel guides on the best kayaking spots.
• Creating paid content memberships (e.g., reviews of kayaking products).

If you don’t want to do it all yourself, you can also form paid partnerships with larger companies to advertise or sell their products.

Preparing to sell

Finally, if you’ve scaled your business up to the point you’d like to sell, you will need to fully remove yourself from the day-to-day.

If you’re a sole trader running a kayaking business by yourself, selling it will be nearly impossible because without you, there is no business. To make your business sellable, you need to build a strong team that can operate and grow without you.

Where possible, automating processes will also increase your business’s value. A well-structured, automated operation shows efficiency and makes the business more attractive to buyers. The easier it is for someone to take over, the more appealing, and profitable, your exit will be.

We can help you build an effective exit strategy, ensuring your business is valuable and sellable when the time comes.

 

How to start a business in 2025 – A Summary

Starting a business in 2025 might seem like a massive challenge, but breaking it down step by step is totally doable.

So, how do you start a business in 2025?

• Choose a viable business – Do something you’re good at that has a real demand.
• Build a fantastic business plan – Do your research and take your time. Your business plan is so important.
• Sort out the boring legal stuff – Yeah, this part’s not fun but it’s got to be sorted to avoid heavy fines.
• Finding funding – Whether it’s your own cash or someone else, use your business plan to secure it.
• Build a brand and market – You won’t make sales if nobody knows about your business. Get online and start selling.
• Scaling – Learn to let go if you want to grow. Moving away from the day-to-day and focusing on your business operation is crucial to scaling appropriately.

If you’re here at the end of this article, you should be remarkably close to the key step: taking action.

If you’re ready to get started and want support from experts who have helped countless small business owners take this leap before. Get in touch today and we’ll help you build something great!