Becoming your own boss is exciting and liberating. But before getting started, you need to do your homework. Among other key steps, you should determine what you’re going to do or sell, research your idea, and register as a limited company.
The UK’s top company formation agent, 1st Formations, recommends the following steps to becoming your own boss and creating a thriving business.
1. Do you have what it takes?
In theory, anyone can become a business owner. In reality, success is built on certain skills and qualities, both personal and professional.
So, the first step to becoming your own boss is to check if you have what it takes. Here are some of the key attributes of an entrepreneur:
- Decisiveness: You’ll be anything but short of decisions to make. Some will be simple, and some will be complicated and daunting. That’s why you need to be decisive and confident in the outcomes you choose.
- Endurance: As exciting as it is to be your own boss, success won’t happen overnight. You will need the endurance to work through challenging times and find the light at the end of the tunnel.
- Self-belief: If you don’t believe in your idea, no one will. Be sure to have 100% confidence in your business, and that will encourage others to support you.
- Knowledge and experience: Experience in your field is essential. This will help you understand your competition and boost your professional reputation.
Other key entrepreneurial skills include leadership, communication, integrity, and self-discipline.
2. Find your niche
The next step to becoming your own boss is to determine what you’re going to sell. Will it be a product or a service? And will you focus on an existing passion or will you try something new?
Personal interests make excellent foundations for a business, as they help maintain drive and motivation. They also generate a deeper purpose beyond profits, which can make being your own boss incredibly fulfilling.
However, not all businesses start in this way. You can also find promising ideas, through research and spotting market gaps that you want to fill. Whichever route you take, you’ll need a solid business idea before moving on to the next stage.
3. Research
Now that you know what your business will do, it’s time to do your research. This is a crucial, unmissable step; it’s where your idea will start to come to life, and you will understand your its potential. You should research the following areas in detail:
- Target market
- Competitors
- Your unique selling points (USPs)
- Relevant pricing strategies
- Weaknesses, opportunities, and potential threats
- Laws that apply to your business/industry
- How you’ll produce and deliver your product/service to customers, and how much it will cost you
- What business insurance you might need
- Potential start-up funding options
Research will take time. To build up your confidence and resilience, you should conduct a thorough analysis of the above and compile your findings and projections into a business plan. This will help you stay on top of all this vital information, and it will come in handy later when seeking investment.
4. Start small
Every business comes with an element of risk. Whether you’re unsure if it’s the right time to quit your full-time job or whether you’re too worried about the business failing later down the line, there’s always a gamble. That’s why it’s best to start small and scale up gradually.
Consider freelancing or starting a side hustle first. These options are a great way to buy yourself some time, put your business idea to the test, and see whether becoming your own boss is truly for you.
Note that if you have additional income, you will need to register for Self-Assessment and file an annual tax return to HMRC.
5. Register your business
If everything is going well, the final step is to register as a limited company. Unlike freelancing and side hustles, limited companies offer some of the following benefits:
- Limited liability: As a shareholder, you are only responsible for the company’s debt up to the nominal value of your shares. So, you won’t be risking your personal assets.
- Tax efficiency: Companies pay Corporate Tax rather than Income Tax, which is currently charged at a lower rate. There are also flexible ways to pay yourself from a limited company and benefit from additional allowable expenses.
- Business name protection: Under UK Company Law, company names must be unique, so no other business can copy your brand name.
- Exit options: Registered companies are separate legal entities. If you no longer want to run the business, you can sell it or pass it on to a family member.
Company registration is quick, easy, and affordable with 1st Formations. For as little as £52.99, your business could be registered and ready to trade in a matter of hours.
Packages also include complimentary services to make being your own boss more manageable, such as the filing of your first confirmation statement and a free business bank account. You should also familiarise yourself with directors’ statutory duties at this stage.
Ready to take the leap?
The road to becoming your own boss takes hard work, preparation, commitment, and plenty of drive. Knowing where and how to start is often the trickiest part, so follow the above steps to pave the way for a successful journey.
