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Starting a business

Working for yourself can be rewarding and challenging. There are lots of organisations and free online resources that can help you turn your idea into a business.

It can take time to make a profit, so it’s often a good idea not to rely on income from a business straight away.

Take time to research the market. Keep your options open with other paid work until you are making enough money to go full-time.

Self-employment pros and cons

Research your idea

You need to find out if your idea will work as a business. To do this, you want to understand:

  • your target customer and if they will want to buy your product or service
  • how the market looks, for example if there are lots of other people doing similar things
  • how much you’ll be able to charge

There are many ways you can research, depending on the product or service you want to offer. You can:

  • look at similar businesses online
  • join Facebook groups where people have similar interests, products or services
  • ask questions on forums for start-ups and entrepreneurs
  • connect with people doing similar things on LinkedIn
  • attend free networking events in your area or online
  • watch videos of entrepreneurs talking about how they began

How to research your idea (Entrepreneur Handbook)

For example, you want to sell handmade jewellery online.

Start by searching for handmade jewellery in your area. You could then look at platforms like Instagram, Etsy and Not On The High Street to see how well other jewellery sellers are doing.

You could look at:

  • how they engage with their audience
  • how many sales on Etsy they’ve made since opening
  • what type of products sell best
  • how they photograph and describe their products
  • how much they charge for postage

Etsy seller handbook

How to sell on eBay (Money Saving Expert)

Write a business plan

Start by writing your ideas down, explaining:

  • why you want to start a business
  • what your product or service is
  • where you will market it
  • who your customers will be
  • how you’ll build and fund the business

Download a business plan template (The Prince’s Trust)

Check if the business name you want is available (Companies House)

You may also want to think about protecting your work from others copying it. This is called trademarking and copyrighting.

How copyright protects your work (GOV.UK)

Business and Intellectual Property Centre (British Library)

Setting up a business

There are different ways of running a business too, including:

  • being a sole trader (self-employed), where you keep your profits after you’ve paid tax
  • setting up a partnership with another person
  • setting up a Community Interest Company (CIC) that has social, charitable or community goals
  • setting up a limited company, which is private and any money you put into it is protected

Setting up a business (GOV.UK)

Grants and support for starting a new business

Some organisations offer free support to people setting up a business. This can include business planning, mentoring, training and co-working spaces. These are sometimes called business incubators or accelerator programmes.

What is a business incubator? (British Business Bank)

You could be entitled to support if you're over 18 and you or your partner claim:

  • Universal Credit (UC)
  • Jobseeker's Allowance (JSA)
  • Employment and Support Allowance (ESA)

Help with moving from benefits to work: Starting or running your own business (GOV.UK)

Self-employment and benefits

There are grants and support available for starting your own business.

Business grants for disabled people (Disability Grants)

Stelios Awards for disabled entrepreneurs (Leonard Cheshire Disability)

Virgin StartUp

Business Without Barriers

Free support for young people

You can apply for free business support for young people through:

Self-employment support in Wales

Business Wales supports people starting, running and growing a business. This includes online information, advice and guidance, the Business Wales Helpline and Business Wales centres.

PRIME Cymru offers tailored support from an experienced business mentor to people over 50 looking to set up a business. If you're considering self-employment, there's a lot of support and advice available to get you started.

Free business courses and events 

Sign up for free courses, webinars, workshops and talks. The more you attend, the more you’ll learn. This can also be a good way to connect with people.

Find online events (Eventbrite)

Browse free business courses (Google Digital Garage)

Develop your digital skills for free (Good Things Foundation)

Warning Watch out for scams

Do your research on business opportunities or paid courses to make sure you're getting value for money.

Work from home scams (Action Fraud)

Get a mentor

A mentor is someone who supports you and your business. They may have had lots of experience running a business and be able to give you advice.

You could try getting a mentor through a local start-up network, contacting someone you admire on social media or through a mentor scheme.

You may need to contact several people to find someone so keep trying!

How to find a mentor (Virgin StartUp)

You can get support setting up a business and improving your skills.

Startups UK

Prince's Trust

Test your idea

Testing your product or service can be a great way to see how it will work and what people think of it.  

When you are ready, trial your service, perhaps at a networking or trade event.

You could try selling your products at a local market or on social media. Ask people for their first impressions and any feedback. Remember you can learn from negative feedback to improve your products or service.

Tax and National Insurance

You must register for tax and National Insurance in the first 6 months of being self-employed or you’ll be fined.

Register to pay tax and national insurance with HMRC (GOV.UK)

Business expenses

Plan what expenses you can deduct from your taxable profit. You may end up operating at a loss in the first couple of years. Being able to claim back expenses can help.

Expenses you can claim against tax (GOV.UK)

Help with your tax return (GOV.UK)

Last reviewed by Scope on: 05/04/2022

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