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Starting a business. Six steps if you are thinking of being self-employed

You will need a clear business plan. This should describe your goals. List how much money you aim to earn, and what you will need to spend to cover your costs. Use this to help get support for your plans.

It can be helpful to look at this plan each year. To make sure your goals suit your needs and what you are able to achieve.

It is a good idea to look at what similar businesses are doing.

You can find out:

  • How customers find them
  • What their price points are
  • Which suppliers they use and any partners they work with
  • What their ‘brand identity’ and unique selling points are

Research like this can help you avoid running into problems down the line and help to hone your plan.

Step One: Making your business plan

This is a written document that explains what you do and what your goals are.

Putting it in writing helps you to see things more clearly.

Your plan should include your objective:



  • This is the services or goods you will provide. You may have more than one
  • Your strategy: This is your long-term aim. Think about what you do want to achieve
  • Your way of marketing: This is how you will find customers and sell your goods or services
  • Your financial forecast: This is how much you will earn and need to spend

Step Two: Working out your business objectives

To help you work this out, you can think about:

  • Your skills and experience: Will you need others to support you?
  • What similar businesses are doing: What can you learn from them?
  • Your target audience: What are their ages, spending habits and income?

Have you heard about SMART objectives?

They can help you outline the key facts. You need them to be:

Specific: What do you want to happen?

  • I will sell (x) product
  • I will provide (x) service
  • I will develop (x)

Measurable: How will you know if you have done what you set out to do?

  • My profits will be (x)
  • Visits to my website will be (x)
  • My customers will come back to me and recommend me to their friends

Achievable:What will be the result of this?

  • I will keep to (x) spend without the need to take out more credit
  • I will be known as a trusted provider of (x)
  • There will be future growth of (x) in year 2

Realistic: What can you do?

  • I will only operate in a certain location
  • I will use online stores
  • I will focus on (x) market

Timely: When are you going to do this?

  • I will achieve my sales goal by the end of the financial year
  • I will split out these steps over years 1, 2 and 3
  • I will be ready to trade by (x) month

Step Three: Writing out your business strategy

This is a brief statement that helps others understand what you stand for and what you are trying to achieve.

Using the example before, it could be:

Helping families celebrate anything that brings them joy through the year. Trusted to deliver the goods by our loyal online customers

Step Four: Setting your financial forecasts

This is what you expect your business to spend and earn.

Your pricing:

  • How much each service or product sells for. Including any seasonal offers or special deals. Such as two for one

Upfront costs:

  • How you are going to cover the initial start-up costs

Ongoing costs:

  • How much in interest or fees you will need to pay
  • How much you need to spend each month to keep going

Profits and losses:

  • What will you spend in the next few years?
  • What will you earn?

Step 5: Creating a business budget

A realistic budget helps keep track of spending.

This helps you:

  • Work out what your costs are
  • Identify where you can make savings
  • Find ways to increase profit

Depending on the size of your business, it can be worth hiring an accountant or using accountancy software to manage your business accounts.

You can cover the cost of this in your outgoings.

Step Six: Opening up for business

Let HMRC know you are self-employed as soon as you can.

It is really important to sort out your tax situation as soon as possible. This helps avoid:

  • Paying too much tax
  • Having to pay a fine. If you pay what you owe too late

You should register to submit your tax return each year to HMRC.

About business banking

Even if you are starting small, it can be a good idea to have a separate bank account for your business.

This helps to keep things separate. And you always have a clear view of what is going in and out.

Shop around to see if there are any offers for opening a business account.