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Setting up a new business in the UK

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As any business owner knows only too well, setting up a new business is an exciting but also a daunting prospect.

We at Sallyport Commercial Finance launched our new business in Glasgow in February and this blog highlights what we have learned. We hope this is useful for others considering launching a new business. 

The whole process from commencing serious conversations to launch took around 10 months. Our planning spreadsheet grew organically to what is now an 88-line document. We had fantastic help from various partners along the way and their advice and expertise has been invaluable – we have highlighted them on our LinkedIn page.

There is a lot of academic information out there about starting up a new business, however this is a more practical guide bearing in mind what we have learned in the last 10 months. I have broken this down into 4 stages: Business Purpose, People, Enablers and Functions. 

New Business Planning Stages

1) Business Purpose:

There is a lot written about this but for us, it comes down to three components:

  • What makes you different?
  • Can you deliver your differences? and;
  • Supporting your purpose with company values that you and your team believe in – not just pretty pictures and words on the wall.

2) People:

  • Choose carefully the leadership for key functions – there’s more information on this below.
  • The team has to buy into the purpose and values.
  • Consider the right level of benefits to make you attractive but also affordable.
  • Minimise administration – Unless you have the skills in house, outsource support such as HR, payroll, employment contracts, policies and benefit provision wherever financials allow. 
  • Never call your team your “staff”. A staff can be a long stick that is used as a weapon!

3) Enablers:

  • Company set up – this takes considerably longer than you would think. For example, company registration, insurances, HMRC registration. It can currently take 5 months to get a VAT number!
  • Funding – if external funding is needed, the funders must share your values and goals to avoid a fallout later. Don’t rush and don’t be tempted to take the first offer you receive.
  • Premises – using a property agent can be helpful to unearth options you don’t see on online searches. Also, allow at least 2 months for the legal process to complete.
  • Legal support – if you can, negotiate fixed fees to avoid surprises.
  • Banking – it can take 2 months to open a bank account due to ‘Know Your Customer’ KYC processes.
  • IT and communications – find a provider that does not hide in the cloud and take a reference regarding quality of on-going support. Note, it can take 2 – 6 months for broadband set up depending on location. There is no need for handsets these days. 

4) Functions:

Operations

It is important to start early with organising:

  • T&Cs – to avoid customer disputes or misunderstandings.
  • Processes – to ensure your team can hit the ground running.
  • Operating system – choosing the right system with good training and support capabilities is fundamental. Often, cheapest is not best!

Sales & Marketing

  • Database systems – there are many out there with similar functionality. We chose Salesforce: The Customer Company due to integration capability with other systems. Make it easy for your sales teams but don’t allow duplication of process through a plethora of excel speadsheets!
  • Business Development / Marketing plan – prioritise based on your route to your target customers to ensure you use your limited time and resources effectively.
  • Launch PR – this can be invaluable and not expensive to get exposure and raise a profile. 
  • Website – allow 2 months at least – this will need a lot of testing and retesting so allow contingency to avoid late nights just prior to launch!
  • Marketing collateral – QR codes and electronic business cards are a great modern alternative. Think carefully if you really need printed material.

Financial control

As a finance provider, we understand how easy it can be to lose control so putting in place a solid bookkeeping process and accounting system is vital. If you are outsourcing some of this, make sure your provider fully understands your field of business. 

Starting Up a New Business : Forewarned is Forearmed!

So, we recommend to plan how much time it will take to set up the business, and double it – on that basis you won’t go far wrong! Hopefully, our practical tips and experiences will help you recognise potential problems before they become one. 

As for Sallyport, we are now in our second month, and of the original 88-line spreadsheet, 86% of the business set up is complete and we are looking forward to the future. 

Follow us on LinkedIn to see more insights like this as they’re published, or of course, contact us for all your SME finance needs. 

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