Setting up a retail business: A UK checklist
A checklist of key areas you'll need to address when setting up your retail business in the UK.
The COVID-19 pandemic has forced many to re-evaluate future goals and ambitions. For those who have faced redundancy now is a great time to consider pursuing that life-long dream and start a new adventure. According to smallbusiness.co.uk, one in five Brits say they want to start a business in 2021.
Are you ready to take on the next challenge and start your own business? You know it’s the right decision but unsure where to start? A checklist will help you make sense of what is important and keep you on track. Preparation can be key to business success or failure so we’ve created a checklist to help guide you through areas to consider when setting up your own business.
Create a roadmap of where you see your business in the next 12 months, create realistic goals for each quarter to help maintain focus. Business can be overwhelming, and motivation can make or break a business so don’t lose sight of your goals even if it means jotting them down on a sticky note or on a whiteboard so you have a visual reminder each day.
You’ll need a business plan if you want to secure investment or a loan. A business plan also helps you to clarify your business idea, spot potential problems, set out goals and measure progress. A business plan template is available to download on the Prince's Trust website to help get you started.
Start by introducing yourself, why you’ve decided to start a business and then propose your business idea and objectives. Not all business ideas are unique so if other businesses are already offering a solution, propose how you will do it differently or better. Outline your business structure and create a sales and marketing strategy. Demonstrate who your target audience is, why and how you will sell to them and how customers will benefit from purchasing your product. Lastly you’ll need a financial plan, ensure you are clear and concise as this will more likely attract investors if you can confidently but realistically forecast profits.
Financing your retail business
How do you plan on financing your business? Very few start-ups can finance themselves or have enough funds to market and grow their business in the first 1-2 years. You may be able to secure a business loan with your bank but there are several ways to finance your business, from crowdfunding and start-up loans to venture capitalists and presales.
- Crowdfunding - A person or business can create an online campaign that anyone can contribute to which generally raises small amounts of money from a large number of people
- Start-up loans - Start-up Loans is one of many sites where you can apply for a loan. The loan is paid back with interest over an agreed length of time
- Venture capitalist (VC) - A VC provides financing to start-ups and early stage businesses in exchange for equity in the business. Investments are high risk for VC’s as there’s no guaranteed return so VC’s invest in businesses deemed to have a high growth potential. Angel investors are similar to venture capitalists except an angel investor invests their own money into a business compared to a venture capitalist who uses pooled money from investment companies to fund investments
- Presales - Sell your product before you are ready to go to market, this will provide some funds upfront and give you an idea of the product popularity and potential success
Decide on a business name
Choose a name that’s memorable and reflects the brand identity you are trying to create, whether it’s formal, casual or a little out there. A company name that relates to the product or service you are selling may make it easier for future customers to find or relate to you. Ensure the name isn’t offensive in different cultures or when translated isn’t offensive. Ask friends and family for their opinion, they might spot a flaw or see an improvement that you hadn’t considered.
Don’t get too set on a name until you’ve checked to see if it has been trademarked already. Finally, check to see if the domain name (including in all domain extensions you require) and social media handles are available. Having the same or similar social media handles and domain name will help with brand consistency. Ensure you secure your domain name and social media handles before registering, they could be available one day and taken the next.
Register your UK business
You should register with HMRC when setting up your business in the UK. Most businesses register as a sole trader, limited company or partnership but it depends on the type of business. You can register online on the GOV.UK website. The main difference between a sole trader and a limited company is a sole trader is personally responsible for business debts whereas a limited companies finances are separate from personal finances. However, there are greater reporting and management responsibilities in comparison to sole trader responsibilities, check out this article for more information.
For a limited company you’ll need to register with Companies House, it’s pretty straightforward and only costs £12 to register online. You’ll be able to register for Corporation Tax at the same time when registering. Once registered you’ll be responsible for keeping records of sales and expenses and sending a tax return each year.
Certain businesses require licences or permits, use the licence finder to check your business requirements. For instance, if you’re a retailer selling alcohol you’ll need a premise and personal licence to sell alcohol. If you plan to sell online internationally check the advice section on the Department for International Trade website, this offers guidance on creating an export plan and route to market.
You’ll have more responsibilities if you decide to employ staff, these include running payroll, paying their National Insurance and providing workplace pensions to eligible staff.
There are many different types of insurance to consider, here’s a list of common types of insurance your retail business may require:
- Public liability insurance covers legal expenses or compensation claims if clients, suppliers, or members of the public suffer personal injury or property damage because of your business
- Employers liability insurance is almost always a legal requirement if you take on employees as you are responsible for their health and safety whilst at work. If an employee is injured in a work related accident the insurance covers you against compensation claims
- Business interruption insurance covers loss of income due to a fire or natural disaster. Some plans have specific exclusions for losses due to viruses or bacteria
- Stock insurance
- Cyber insurance covers the cost of repairing and restoring your systems, data and website following a breach or a hack
- Business contents and equipment insurance
- Legal expenses insurance
Insurance for some or all the above can be purchased as a single plan. Quote comparison sites such as Simply Business will help you make an informative decision on the types of insurance you need and provide quotes from a variety of insurance providers.
There’s so many tools out there to help you manage your business from MailChimp for email marketing, Google Analytics to help you understand visitor behaviour on your website, HootSuite to help manage social media accounts to marketing, sales and CRM software such as HubSpot.
Accounting is not everyone’s favourite subject, you can hire an accountant to do everything for you or use accounting software such as Xero to help you manage your finances. It’s a legal requirement so you may choose to use accounting software yourself but still use an accountant to ensure everything is in order. Using a POS system with integrated payments and integrated accounting software will make managing your business finances so much easier as you’ll be able to reconcile payments faster and be confident that the correct card payment for each sale has been taken. Human error is reduced as the order total is sent straight to the card reader from the POS so cashiers don’t need to manually type in the total.
Point of Sale (POS) system
A POS system should not only manage and process sales seamlessly but also streamline operations and help you effectively manage your business. POS systems with advanced reporting help save hours each week by highlighting product trends, performance and stock levels. With better stock visibility you’ll be able to make informed business decisions based on product trends so you only order stock you know sells well. Whether you’re in the office, at home or sat on the beach choose a POS system that allows you to manage your business anywhere. From products and stock levels to staff, sales and store performance, always have the information you need at your fingertips.
The pandemic has highlighted our ability to adapt. Many businesses now have an online presence in comparison to pre-pandemic. Omni-channel selling (selling in-store and online) is now the norm and a system that can offer both will save you so much time as you won’t be need to duplicate your efforts across multiple systems. An omni-channel system also provides a seamless experience, all products and stock levels are in sync across each channel and you’ll even be able to process a click and collect order straight from your POS.
Don’t get left behind with the changing times, start your business on the right foot with a modern Point of Sale system that will give you the tools to boost productivity and streamline operations. We hope you’ve found this checklist helpful. Good luck on your journey to setting up a retail business in the UK!
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