Everything you need to know about starting a business in 2023

Running your own business can provide a lot of perks: you get extra independence, increased flexibility and you can spend more time doing something you really care about.

Many people intend to launch a new business at the start of a new year, but taking the plunge can seem very daunting, especially in the current economic climate.

However, many businesses have launched and thrived during economic uncertainty, including the likes of Disney, Microsoft, Airbnb and Wilko. In fact, some may argue that startups have a better chance of survival in turbulent times than more established businesses.

With all that in mind, here are seven steps to starting a business in 2023.

1. Narrow down your business idea​

The first and most important step of launching a business is the business idea. Your business should be based on something you’re passionate about and that you won’t lose interest in down the line.

Things you should consider with your business idea include:

• Is it profitable? Consider your overheads, prices of raw materials and any other relevant costs to determine whether you can feasibly sell your product or service at a reasonable price.
• Does the product or service already exist? If you’re coming into the market with something that’s already out there, you need to consider why customers should buy yours instead.
• What’s the competition like and how are you going to differentiate yourself? You might choose to compete on customer service, price, speed or develop another unique selling proposition.

Once you’ve established your business idea and determined that it’s viable, then you can get started on some deeper research – for instance, who you’re going to target and sell to.

2. Draw up some business plans​

As the name suggests, a business plan is a plan of how you will run your business. It will outline your objectives, information about your product or service, your financial plans and any marketing strategies.

Think of your business plan as a map: you may be able to get by without one, but the journey will be a lot easier if you have one. Having a business plan will help you avoid any big mistakes, and is vital if you’re hoping to get investment at some point in the future.

The five main components of a business plan include:

1. Executive summary: An overview of the main points.
2. Operations: Including the people, services, logistics, timelines, technology etc.
3. Marketing: Market research, SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis, competitor research and marketing plans.
4. Financial: Profit and loss and cash flow forecasts. Check out our guide on managing cash flow when you’re starting up for some advice on this.
5. Appendices: Extra information that supports the previous sections.

For more information on writing a business plan, the gov.uk website has a series of helpful templates and other resources to guide you.

3. Decide how you’re going to sell​

Another big consideration is deciding whether to sell in-person or online. With the retail market constantly changing, it’s hard to know what will be the best option in the long-run.

Selling online provides a larger customer reach and is much easier to scale. But, a brick-and-mortar store often provides a better customer experience and can provide a competitive edge.

Check out our guide, benefits of ecommerce vs retail stores, for more on the perks and drawbacks of either option.

4. Figure out your name (and brand design)​

With more and more businesses launching every day, coming up with a business name that is both unique and appropriate for your business can feel like an impossible feat.

Your business name can make or break you – as one of the first touchpoints for customers, it’s monumental in defining who you are and creating an identity for your customers.

There are many things to consider with a business name. For instance, if you’re selling overseas, you need to make sure that your brand name translates well (read our guide to choosing a winning business name for more tips and advice on this).

It’s also important to confirm that there’s no other business out there with the same name, otherwise you can run into legal troubles. If you have an idea for your business name, run it through gov.uk’s company name availability checker to ensure it is unique.

Develop the perfect brand design​

While you’re establishing your business idea and business name, you should also take time to consider the look of your brand.

Think about the colours, designs and identity you would like for your brand, that also complement your brand name. These can then be used to guide your website development and marketing later down the road.

5. Register your business with HMRC​

To become an officially recognised business, you will need to register with HMRC.

In doing so, you will need to decide how you will like your business to be set up. The different types of business you can be registered as include:

• Sole trader: Running the business on your own, and you keep all of its profits.
• Limited company: Has its own assets, profits and liabilities, meaning the personal finances of company owners and shareholders are protected by “limited liability”. Find out more about setting up your business as a limited company here.
• Partnership: Where you and a business partner share the responsibilities of your business.

Deciding how to set up your business can be a big decision, and is a common topic of debate in the UKBF forums. If you’re unsure of how you should register your business, start a new discussion forum and get personalised advice from the UKBF community.

6. Build your website and get marketing​

Having a website for your business can be crucial to establishing brand credibility, customer trust and awareness.

Thankfully there are many user-friendly website builders, so there’s no need to use your valuable cash to hire a developer. If you’re selling online, you will need to choose a website that also supports ecommerce – these include Shopify, Squarespace and Wix.

Once you’ve built your website, you can then start marketing to drive traffic to your site. Though marketing can be really beneficial, it can be difficult to know how to do it effectively.

Some insightful guides on how to market your business include:

• What marketing budget should I set for my small business?
• Four tricks to drive ecommerce traffic from social media
• Seven ways to promote your small business for free

7. Take a note of important dates​

Once you’ve got your business up and running, you’ll need to be aware of any business deadlines and legislations that may come your way.

This great resource from the fsb includes key dates you should note for 2023, including tax deadlines, VAT returns, bank holidays and potential upcoming changes to legislation.

It also may be helpful to do your research on any grant or loan deadlines, should you need any financial support in the future. Gov.uk has a master list of finance and support schemes for small businesses, so it’s definitely worth having a look for any that may be appropriate to you and seeing when you can apply.