Small businesses constitute around 99 percent of businesses in the whole of the UK, although not all small businesses are equal and can actually be classified very differently – this has an impact on how that business is run. For instance, the smallest of small businesses may fall into the microbusiness category and this makes things like switching energy providers so much easier. To find out more about this process, visit the unbiased switching advice website, Utility Bidder.
There are several different factors that determine exactly how a small business is classified. The UK government classifies businesses based on the level of turnover that they generate and the number of people they employ. So, a microbusiness is one that employs less than 10 people and has a yearly turnover of less than £2 million a year. A small business, however, is one that turnovers less than £10 million per annum and employs fewer than 50 people.
Whilst this may be the official classification of what a small business is, the idea of what one is actually differs from institution to institution and person to person. For instance, one person may see one company as a small business when it is actually a microbusiness and vice versa.
Examples of some of the micro businesses that are currently operating in the UK include Vendimia Lighting Co., Boss Brewing Company, and Manton’s Cards. Examples of some small businesses within the UK include Fourex, Marshfield Bakery, and Flight Club Darts.
There are eight main steps involved in the setting up of a small business. These include the following:
- Registering a business name – deciding on a name for a small business can be a difficult step although it is very important as it portrays the brand and sends a message out to customers. This is why it needs to be unique and appealing to the target audience.
- Choosing a legal status – it is important to choose a legal structure for a small business. The options include being a sole trader, a partnership, or a limited company.
- Writing a business plan – these details a small business’ strategic goals, market research, financials, and any potential obstacles that there may be.
- Securing finance/funding – the amount of money that is required in order to set up a small business varies depending on the product and/or service that they are selling. There are government grants that are available for small businesses starting up.
- Planning advertising – small businesses need to consider how they plan to market their goods or services to potential costumes. This is why an advertising plan needs to be established.
- Buying business insurance – depending on the type of small business, the insurance required will differ and be tailored to them.
- Working out tax requirements – there are many different tax rules that small businesses need to abide by and so it is important that they quickly work out what they are.
- Creating a system for keeping business records – staying organized is important for any small business, not only for tax purposes but also for various other purposes.
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