Right now in the UK, well over four million people are working for themselves. And there’s certainly a lot to recommend joining this growing army of entrepreneurs.
A major perk is the liberating feeling of not having to answer to a boss. You will call your own shots and work in a way that suits your circumstances. Plus, there’s the sheer satisfaction that comes from turning your dream into a successful and profitable reality.
If you’re motivated to work for yourself but are wondering “What small business can I start?”, then you’re on the right page. Not only will we look at some of the best ideas for small business success, but we’ll also lay out the factors that make certain ideas particularly stand out for would-be entrepreneurs. We’ll also outline the essential things to do as you prepare for launch.
It can be motivating to know that most small businesses in the UK really are very small indeed. According to recent government data, over 74% don’t employ anybody other than the owner themselves.
25 top small business ideas to consider
Every entrepreneur will have their own vision of what the ideal small business might be. Kickstart the brainstorming process by taking a look at this list of small business ideas that can be launched by a newbie founder.
We’ve grouped them into five main categories, so you can jump straight to the type of small business that appeals to you.
1. Food
Turning your passion for food into a career doesn’t necessarily mean having to go all the way with a brick-and-mortar restaurant. Below, we’ll look at some alternative, more approachable routes into the industry.
Just bear in mind you’ll need to register your food business with your local authority at least 28 days before you start trading. You may also want to undertake a course to receive a food hygiene certificate. While this isn’t legally compulsory, it’s a good way to prove to inspectors and customers that you run a clean, safe food prep environment.
Street food vendor
Britain has become a nation of (street) foodies, eager to feast on everything from freshly steamed Himalayan dumplings to crispy Korean fried chicken. If you’re able to invest in cooking equipment and card readers, and you love meeting people as much as you love cooking, this could be a great career path.
It’s a highly competitive industry, and setting up shop at high-value locations such as food markets and music festivals will usually require a strict application and vetting process. It may take time to build up your reputation to the point where you can access those spaces.
So, whether you’re serving up classic burgers, your own novel spin on old favourites, or a kind of cuisine which most people haven’t had before, you’ll need to ensure everything from the quality of the cooking to the branding on your stall/van is on point.
The Nationwide Caterers Association has a website packed with useful information on getting your street food business started.
Café owner
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Opening a café is without doubt a big endeavour, and will likely involve taking a business loan. But, as long as you approach it in a methodical way, you can potentially have a slice of a market worth almost £6 billion in the UK.
It’s crucial to spend time drawing up a detailed business plan based on extensive market research. There are three key questions to ask:
Who are your competitors?
What can you offer in order to stand out from chain rivals like Starbucks and Costa?
Which location will bring enough footfall?
The good news is you can make use of hardware and software solutions that can make life considerably easier as a café owner, such as point of sale (POS) tech.
Our guide to opening a café provides a detailed, step-by-step overview of what you’ll need to know if this sounds like the right path for you.
Private chef
You’ll need to have experience in professional kitchens to become a private chef. But if you do have a proven track record, this can be a great way to work for yourself within the food industry without having to invest in your own premises.
There are two main ways to be a private chef. One is to be a live-in chef for a client. You’ll settle in their home and work set hours, planning menus, sourcing ingredients and preparing their meals.
Alternatively, you may be hired to cook at one-off events, like birthday parties and corporate events.
There are online listings sites like Yhangry which function like “Ubers for chefs”. You can put up a profile detailing your experience and the kinds of dishes you specialise in, then wait for bookings to come in. While work may be infrequent to begin with, this can be a good way to bolster your reputation and generate word-of-mouth success.
Cookery classes
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You don’t have to be a professional chef to run cookery classes, but you will obviously need to be sure of your skills and have the budget to rent kitchen premises.
You’ll also want to occupy a clear niche, whether that’s a type of cuisine from a certain part of the world, or a particular cooking method like sous vide.
You’ll also need to emphasise your knowledge and skills to prospective customers. An attractive, welcoming, well-designed website outlining exactly where your skills lie, and what the classes will teach, is a must.
It’s also recommended that you create cooking tutorial videos for TikTok, Instagram and YouTube. By engaging with your viewers as much as possible, you can effectively position yourself as a “name” in your style of cookery.
Mail order food
Love cooking but aren’t keen on facing customers or dealing with the breakneck speed of a professional kitchen? Another option is to sell delicious things by mail order. This is a growing industry in the UK, with numerous entrepreneurs marketing their lovingly crafted goods online.
Certain food types, like gourmet chocolate brownies and artisanal popcorn, are already well-served by established businesses. But if you stake a claim on a less oversubscribed speciality, you can get your food business started using your own kitchen, without having to invest in costly professional premises.
Remember that you have to abide by UK regulations on selling food for delivery. These are outlined by the Food Standards Agency.
As with some many small business ideas, you should also ensure you have a beautiful website and a regularly updated Instagram page to showcase your products.
2. Cleaning
No list of good ideas for a small business entrepreneur can overlook cleaning. As the British Cleaning Council notes, the industry generates nearly £60 billion a year in revenue, and there continues to be large demand for both general purpose cleaners and more specialised cleaners alike.
Whatever kind of cleaner you decide to be, it’s important to take out an adequate public liability insurance policy. This will cover you in case of accidents – for example, if you spill bleach on a client’s carpet, or if someone injures themselves after slipping on a floor you’ve polished.
Domestic cleaning
Domestic cleaners aren’t only employed by the wealthiest households. With ordinary people leading increasingly hectic lives, they’re more likely than ever to hire people to keep their homes ship-shape. In fact, it’s estimated that around one in three UK households employs a cleaner.
One of the perks of being a domestic cleaner is that you get started fairly quickly, without having to invest in equipment beyond a vacuum cleaner, mops, brushes and cleaning materials.
You can advertise your services on local message boards or on sites like TaskRabbit, though competition on such sites is fierce and it may take time to rack up the good reviews that many customers look for.
One way to distinguish yourself from competitors on the listings sites is by creating your own website and creating a social media presence to raise awareness of your services.
An eye-catching logo, a warm, chatty website tone, Instagram and YouTube videos of cleaning tips – all of these can really make you stand out from the crowd in what is a jam-packed marketplace.
Commercial cleaning
Many domestic cleaners also utilise their skills in offices, shops and other commercial premises. Some exclusively specialise in commercial cleaning. It really comes down to the kind of environment you personally prefer to work in.
Commercial cleaning may require more expensive kit, such as equipment trolleys and more heavy-duty vacuum cleaners. The work itself may also be more intensive, as businesses may have strict standards regarding deep cleaning and disinfection that you have to adhere to.
As a small business, you may find it more viable to work for smaller commercial clients, at least to begin with. Larger premises, such as call centres and multi-level offices, will likely require multiple cleaners to get the job done.
However, if things go well and your business grows to include employees of your own, you may be able to position yourself as a go-to cleaning company for corporate clients.
Carpet cleaning
This may seem like a bit of a curveball option, but there’s actually a big call for carpet cleaning services in the UK. Surprising as it may sound, carpet cleaning ranked first place when we researched the most in-demand local business niches throughout the country.
Specialising in carpet, rug and upholstery cleaning can make your business more competitive, compared to being a general domestic/commercial cleaner. Bear in mind that the initial outlay will be greater since you’ll have to invest in carpet and upholstery cleaning machines, specialist detergents, and other materials.
If you’re serious about a career in carpet cleaning, you should aim to become a member of the National Carpet Cleaners Association (NCCA). This will allow you to use their logo in your marketing materials, and have your business listed on their site.
You will need to complete an entry-level training course in carpet and upholstery cleaning in order to become an NCCA member. There are many such courses available in the UK, some of which can be completed online.
Window cleaning
Window cleaning absolutely deserves a place among viable ideas for small business founders. According to recent research, the window cleaning market is worth almost £300 million in the UK alone.
Getting into this business doesn’t require specific qualifications. As long as you’re motivated, physically fit enough to do the hard graft, and are able purchase the right equipment, it’s a line of work you can get into very quickly.
When it comes to kit, the trusty squeegee is only part of the window cleaner’s arsenal. You’ll also need to invest in telescopic water-fed poles, water purifiers, hoses, trolleys, brushes, and chemicals. Having a portable card reader will also allow you to take payments in a way that’s convenient for customers.
As with other kinds of cleaning businesses, it’s always a good idea to promote your services online, both on listings sites and your own social media profiles.
Car detailing
Car detailing is the next step up from valeting, and is about more than simply cleaning a vehicle inside and out. The aim is to make the vehicle look like it’s fresh from the dealership floor (or as close to this state as possible).
Thorough detailing will often include:
A rigorous clean of the exterior and interior, including shampooing of upholstery, scrubbing of wheels and tyres, and cleaning out of air vents
Light cosmetic restoration work, such as wet sanding the exterior to restore paintwork and remove scratches and other blemishes
Decontamination of foreign particles bonded to the car’s exterior, such as tar, iron and tree sap
Application of protective materials like waxes, sealants and ceramic coatings
You’ll also need to undertake a detailing training course. Respected purveyors of such courses, ranging from entry-level to “master detailer”, include UBV and Auto Finesse.
3. Ecommerce
Once upon a time, owning a shop would have been a pretty involved process, requiring significant funds to secure a brick-and-mortar location. And then there would be the cost of hiring staff and the necessity of working rigid hours.
Today, thanks to ecommerce, you can set up an online store in a matter of hours and work in a way that suits you. You don’t necessarily even have to buy any stock to cater to a market that was worth almost £111 billion in the UK alone in 2022. Let’s consider good ideas for a small business where you’ll sell products entirely online.
Crafting
If you have a talent for arts, crafts and jewellery making, you can take advantage of multiple channels for selling your handiwork to the general public.
There’s a big appetite out there for eclectic items. Whether you specialise in cheeseboards made from reclaimed wood, earrings shaped like tiny slices of cake, or greetings cards featuring sci-fi and fantasy characters, you can market them to people who share your tastes.
The most well-known online marketplace is Etsy, but there are plenty of other sites to consider, such as Folksy, Art in the Heart and Crafter’s Market UK. You can also more firmly establish yourself as a brand by creating your own small business online store. You can even get started by selling your items via social media posts, and take payments in a swift, seamless way by sharing SumUp’s Payment Links.
Crafting is a highly competitive sector, and success will rely not only on the quality and originality of your items, but on how proactively you market yourself. This is where taking good quality photos and videos, and maintaining an active presence on sites like Instagram and TikTok, can make a real difference.
Dropshipping
Dropshipping is one of the less financially risky ecommerce ideas for small business entrepreneurs to get stuck into. That’s because you outsource the actual manufacture, packing and delivery of items to third party suppliers.
Rather than having to worry about stockpiling inventory that won’t sell, you can focus on maintaining a professional, attractive online store. By integrating a dropshipping app, any orders you receive will be automatically redirected for your third party suppliers to fulfil, as and when they come in.
As competition is fierce in the world of dropshipping, it’s important to stay up to date with popular trends and in-demand items. You may want to track hashtags on social media, see what people are searching for using Google Trends, and invest in Facebook Ads.
Our dedicated guide to dropshipping considers the ins and outs of this business model in more detail, and provides advice on forging links with drop shipping suppliers.
Print-on-demand selling
The print-on-demand ecommerce business model is similar to dropshipping, in that third party suppliers take care of manufacturing and sending items to your customers. So, again, you don’t have to pay for inventory before making sales.
The difference here is that you’ll be selling customised items that are specific to your business. If you have a flair for art and design, you can have your creations emblazoned on everything from t-shirts to mugs, which are printed and produced to order.
Thanks to print-on-demand suppliers, it’s never been easier to launch your own unique product line. And don’t be afraid to be as imaginative and “out there” as possible.
Remember, your originality is what will draw in customers who are seeking an alternative to more generic high street designs. So let your imagination run wild.
Subscription box business
The subscription box industry is booming, with recent research suggesting that the value of the UK market will hit £1.8 billion by 2025. From high-end spirits to shaving kits to treats for pets, there seems to be no limit to what customers are eager to receive through the post on a rolling basis.
Unlike other kinds of ecommerce, launching your own subscription box business isn’t something that can be done overnight. You’ll need to:
Carefully assess what kinds of products and services are offered by other subscription businesses in your chosen category, and how you can differentiate your own offering
Develop unique, attractive branding and packaging – remember, much of the appeal of subscription box schemes is that they offer a fun, exciting, artisanal alternative to high street shopping, and the aesthetics need to reflect this
Source the right suppliers – these could range from wholesalers and online marketplaces to small, local companies you approach directly
Plan a prelaunch phase, where you’ll use social media to direct potential customers to your online store and encourage them to register their email addresses
Flipping fashion
Flipping fashion is the fine art of buying clothes and accessories that are either second-hand or from a previous season, and selling them on for a profit online.
For many people it’s a nice little side hustle. But it can be the basis for a genuine ecommerce business if you take an aggressive approach to sourcing and marketing the items.
Visiting vintage stores, pop-up markets and warehouse sale events can yield designer apparel at affordable and discounted prices. These can then be cleaned if necessary, then repackaged and resold.
Good sites for getting started as a fashion reseller include eBay and Asos Marketplace, although as your business grows you can specialise in a theme – say, rockabilly or early 20th century items – and create your own online store.
Success as a flipper will require a genuine knowledge of fashion and diligent reading of fashion websites and blogs, as you’ll always need to be on the ball when it comes to how much to charge and what kinds of brands are currently in demand.
4. Online services
Small business ideas that are based entirely online come with some significant advantages. The overheads are low, for one thing. Depending on the kind of business you run, your running costs may be limited to software purchases like Microsoft Office and Photoshop.
Providing online services also brings you greater physical freedom, compared to many other career paths. You have the option to work from home, from a café, or while travelling, integrating your work into your lifestyle. You can use freelancer platforms like PeoplePerHour and Upwork to advertise your services and get a foothold in your chosen industry.
Copywriting
If you have a way with words, copywriting can open up many opportunities. You may be commissioned to write:
General copy for clients’ websites
Blog posts to position clients as thought leaders in their sectors, and make them rank more highly on search engines
Online newsletters and other kind of email marketing content
Product listings and descriptions
Establishing yourself as an expert copywriter is about more than being able to write great sentences to order. You’ll need to have an understanding of search engine optimisation (SEO), and be mentally agile enough to adapt to very different briefs from very different clients.
As you become more established, you may find it beneficial to work within a particular niche. From travel to technology to fashion, establishing yourself as a specialist in your field can help attract clients through word-of-mouth.
Social media consulting
The savvy use of social media platforms has become a vital way for businesses to boost brand awareness. However, many companies – especially small ones – simply don’t have the staff or resources to devote to their social media channels in-house.
This is where you come in as a social media consultant, hired to curate and populate their socials. Posting on their behalf on Twitter, Instagram and/or Linkedin, you will effectively become their voice, eyes and ears, ensuring your client stays visible and engaged with potential customers.
Your reputation is important when setting up as a social media consultant. It’s essential to be active on social media yourself, positioning yourself as an expert through proficient posting.
Whether it’s in the form of Twitter threads on current affairs and the social media industry, or even simply funny and incisive pop cultural meme posts on your Instagram, this kind of activity will form your portfolio when you’re starting out.
Web development
Whether you’re a coder who specialises in front-end, back-end or full stack work, there’s widespread demand for web developer skills right now.
In fact, one of the big tech talking points of recent times is the serious and ongoing shortage of developers. Last year, a survey of senior technology professionals revealed that nearly a third of software roles, including developer jobs, were unfilled.
Having no formal training in web development doesn’t have to be a barrier to entering this market. There are many accredited boot camps which will train you up in JavaScript, SQL, UX and other essentials in a matter of months.
The best bootcamps will nurture as well as educate, providing mentorship and networking opportunities so that you have the tools and connections to find your first gigs as a fledgling coder.
Graphic design
Don’t be disheartened by the arrival of AI – there’s still a healthy demand for human creatives, with the global graphic design market set to grow to almost $76 billion by 2029.
Having great design skills is, of course, the foundation to being a successful graphic designer. But, to emerge successfully in such a competitive industry means keeping up with the latest trends.
Across many business sectors, there’s a call for witty, shareable memes, expressive typography, and custom illustrations that tell engrossing stories. By honing your skills in these areas, you may be able to establish yourself as a graphic designer attuned to the zeitgeist.
And yes, generative AI platforms like DALL·E 2, will probably become a key part of your artistic toolkit, making it easier to experiment with designs and helping you to stay at the top of your game.
Affiliate marketing
Affiliate marketing is a way to create income by promoting other companies’ products and services through your content, whether that’s through feature articles, blogs, videos or social media posts.
For example, you might create a website that’s all about baking. You might then pepper your articles, recipes and how-to guides with links to cookware and kitchen gadget suppliers. Depending on your affiliate marketing model, you’ll be paid whenever your readers either click through, or make purchases via the links.
Being a successful affiliate marketer means demonstrating your passion and expertise in your niche, so that you gain a strong readership who can then be referred to the merchants.
While affiliate programmes like Amazon Associates and ClickBank can provide connections that will monetize your traffic, generating that traffic in the first place will take time and (unpaid) effort. But, with patience and hard work, being an affiliate marketer can be a way to turn a genuine passion into a revenue generator.
5. In-person services
Not all small business ideas can be conveniently grouped into one clear category. Here are five other possibilities which are pretty diverse, but have a couple of key things in common.
One, you can get these businesses off the ground without having to splurge on major overheads to start with. And two, they all involve directly interacting with customers, so they’re ideal if you enjoy that aspect of running a business.
Tutor
The private tuition industry is booming, with research showing that more and more parents are going the extra mile to ensure their kids get the best exam results possible. That’s why becoming a professional tutor deserves its place among the top small business ideas UK-wide.
No formal teaching qualifications are required for becoming a private tutor. However, if you want to get started in the industry by signing up with an online tutor listings platform like Tutorful or Titanium Tutors, you’ll need to meet their particular enrolment requirements.
Bear in mind that private tuition can be done via online lessons as well as in-person, which means geographical proximity is no barrier to finding clients.
Having a genuine passion for your subject, and creating a well-written, appealing profile on a tutor listings site, can make this a satisfying and lucrative career path.
Personal trainer
If the gym is practically your second home, you may be able to monetise your passion for fitness by becoming a professional personal trainer. You’ll be able to operate your business in a way that suits you, whether that’s providing sessions in clients’ homes, in parks, or of course in gyms.
An advantage of being an in-house trainer at a gym is that you won’t have to spend a lot of money on expensive equipment like free weights. Of course, once you’re more established, you can consider having your own premises with your own equipment.
Bear in mind that, in order to establish yourself as a trusted PT, you’ll need to invest time and money into earning Level 2 Gym Instructor and Level 3 Personal Trainer qualifications.
These should be provided by a training provider approved by the industry body, CIMSPA. Depending on how intensively you study, you may be fully qualified in a matter of weeks or months.
Handyperson
Busy people are increasingly going online to sites like TaskRabbit to outsource their DIY tasks to others. So, if you’re skilled in this department, you may be able to establish a reputation and progress from doing some odd jobs to running a full-time handyperson business.
Initial overheads don’t have to be very high, beyond purchasing essential kit like a fully-stocked toolbox, saws, extension cables, sanders and painting supplies. Since your work brings the risk of property damage and injury, public liability insurance is also a must.
You don’t need formal qualifications to carry out tasks like tiling and plastering, carpentry work and painting and decorating. However, you may choose to upskill and bolster your reputation by completing handyperson courses offered by places like The DIY School and Able Skills.
Sewing and alterations
Are you a dab hand with a needle and thread? This can be the year you turn your skills into a potentially lucrative business.
Armed with a sewing machine, needles, fabrics and other basic equipment, you could quickly offer services like shortening/lengthening trousers, embroidering names and initials onto clothes, changing the linings of jackets, making vintage dresses fit better, and tailoring hand-me-down wedding dresses.
With consumers being increasingly concerned with sustainability, and reports showing that “fast fashion” is falling out of favour, this is a great time to tap into a growing demand for clothes to be repaired and re-styled.
As with any fashion-related business, branding can make all the difference when it comes to attracting clients. Take the time to create an attractive website, and post regular images of your embroidery and alteration work on social media.
Removals
Removals companies ranked highly in our list of the most in-demand local businesses in the UK, and it’s a fairly straightforward industry to enter.
Providing you’re physically fit and have the right transportation, such as a spacious van, you can get started simply by working on your own. If things go well, you can then think about bringing in a partner and expanding the business by purchasing more vehicles.
It’s generally recommended that anyone in the industry registers with the British Association of Removers. Being a member of this trade association, which was founded well over a century ago, can attract more custom by giving your business extra credibility.
It can also give you discounted access to training courses relating to everything from furniture handling to fragile packing to health and safety.
What are the characteristics of a good business idea?
There are many potentially good ideas for a small business entrepreneur to consider. Some will require you to get out there and perform services in person, while others can be run from your desk (or your sofa, if you feel like it). Some will require significant funding, others can be started on a shoestring budget.
To avoid feeling overwhelmed during the brainstorming phase, it’s useful to have a filter for whittling your options down to a viable shortlist. These are the characteristics that tend to mark out the very best ideas for small business founders:
They utilise your pre-existing skills or interests. Learning new skills can take time and money. That’s why it’s advantageous to focus on business ideas which either make use of skills you already have, or require re-training in something you’re genuinely interested in. This way, whether it’s coding or cooking, gaining the necessary knowledge won’t feel like a chore.
They suit your personality. If you’re a people person and thrive in a high energy environment, there’s probably not much point in considering online-only business ideas. After all, you’re likely to feel frustrated and lose interest in the long term. On the other hand, if you’re not keen on customer-facing work, then online business ideas might be perfect for you.
They cater to a tried-and-tested market. The best ideas for small business founders don’t necessarily require you to reinvent the wheel. In fact, going too niche may backfire if there’s not enough demand for what you’re offering. By targeting a market where there’s clear demand, you can find success by researching your competitors and providing a top quality service, whether you’re a personal trainer, a jewellery maker, or a marketing copywriter.
They have minimal setup costs. It’s always a bonus when a small business idea doesn’t require a big financial outlay to set up. Even if you have your eye on a sector which comes with unavoidable costs, such as the food business, you may want to focus on the most affordable route in (for example, a street food stall or café versus a fully-fledged restaurant).
They can be easily managed. Good ideas for a small business won’t require multiple people to keep things on track. After all, most entrepreneurs won’t have the resources to recruit colleagues to start with. You’ll probably want to stick to small business ideas which can be launched and comfortably run by one person (you).
They don’t require a big inventory. Goods and raw materials cost money. They also take up space, and that can cost more money. The most appealing ideas for small business founders are those which minimise the amount of inventory you need to physically have in stock and manage. This is why, for example, small business ideas involving drop shipping can make more sense than the more traditional ways of selling items online. (We’ll discuss this in more detail below.)
5 signs you have a great business idea
How can you tell which small business idea is the right fit for you? Here are five signs that you’ve hit upon a great small business idea that you can turn into a successful reality.
1. You’re genuinely excited to do it
A business idea may tick the right boxes on paper, but none of that counts for much if it doesn’t genuinely excite you.
After all, with no boss looking over your shoulder to monitor your hours and ensure you’re meeting your goals, self-motivation will be crucial. Having a gut-level belief in your idea will drive you to work those long hours and overcome the challenges that inevitably come up in the initial weeks and months of working for yourself.
2. Other people agree
This is your vision and your business, so – as noted above – your own enthusiasm is one of the biggest green flags you can have. However, it’s always a good sign if friends and family also believe your business is the right fit for you.
Canvassing the opinions of people you care about will let you see your business idea in a more objective light. If they’re as enthusiastic as you are, it’s a very good sign that you’re onto something.
3. It’s easy to explain/sum up
Can your business idea be explained in the form of an elevator pitch? In other words, a snappy summary in two or three sentences that can be quickly understood by others.
Even if you’re not actually looking to “pitch” the idea for a loan or investment, the very fact that it can be quickly summarised and communicated is a sign that it’s a good, solid idea for a business.
4. It’s technically feasible
Passion for your idea is one of the two pillars a small business is built on. The other is feasibility. In other words, can you really see yourself taking it from dream to reality?
You need an analytical approach here, and be honest with yourself about possible barriers. For example, if the startup costs are too high, and you don’t have access to savings or business loans, then you may have to rethink the concept.
Or, if it requires certain skills or qualifications you don’t have the time or budget to acquire, then you may need to pick an idea that’s more approachable.
5. It stands out from the crowd
Earlier in this guide, we touched on the fact that you don’t have to reinvent the wheel to launch a successful small business. There will always be a demand for, say, handypeople, web developers, crafters, and cleaners, meaning it’s perfectly possible to thrive even in a competitive field.
That said, a really great business idea will put an original spin on whatever category you’re working in.
This might be in terms of the specific products you’re selling – for example, quirky charms and ornaments that other crafters online aren’t offering. Or it might be in terms of branding – for example, having a playful and irreverent social media profile for your domestic cleaning business.
What you need to do before setting up your small business
Once you’ve answered the question “What small business can I start?”, it’ll be time to put your plan into motion. Taking a methodical approach is important, so let’s consider the steps you should follow.
Research the market
Having settled on a small business idea, your next step should be to research the marketplace and your possible competition. Google is your friend here, but here are some points to keep in mind:
Geography may or may not matter. For example, if you want to set up a sewing and alterations business, it’ll be essential to find out which comparable businesses already exist in your town or city. But if you’re launching an online-only business, the physical locations of competitors will be largely irrelevant, and you’ll need to cast your net very widely when researching other businesses.
Research their social media channels. Simply reading competitors’ websites isn’t enough – you should assess how they engage with audiences on Twitter, Instagram, Facebook, Linkedin, even TikTok if they’re on there. You can take inspiration from how they do things, and think of ways you can improve on their use of social media.
Research their current customers if that’s possible. If they’re an online services company, check out their “clients” page to see case studies of projects they’ve done. If they’re an online crafter, read the reviews and feedback left on Google and online marketplaces. This will give you a 360-degree overview of the industry you’re entering, and the expectations of your future customers.
Reach out to potential customers
Depending on the kind of business you’re launching, you may be able to take your research a step further and connect with (potential) future customers well before you start trading.
It can pay to be upfront and proactive. Say you’re planning to open a café. You can conduct some in-person market research by popping into local shops and businesses. This way, you can learn exactly what the people who work in the area would love to experience in a new café, in terms of the look and feel as well as the kinds of food and beverages available.
To take another example, let’s say you’re creating a subscription box business. Long before you launch, you can create a website and encourage visitors to provide their emails for an initial discounted deal. You can then send them questionnaires about the kinds of products they’d love to receive, and curate your boxes accordingly.
Choose your business legal structure
What type of legal structure will your small business have? This is a fundamental question every founder has to tackle, and there are three main options.
Sole trader
Being a sole trader is the simplest, most hassle-free way to do business. The only formal process that’s required is to register with HMRC for tax assessment purposes.
As there’s no legal distinction between you and your business, you’re able to keep all profits you make after tax. However, you’ll also be personally liable for any losses or debts the business incurs.
Partnership
If you’re setting up your small business with one or more people, you could opt for the partnership structure. This works in a similar way to being a sole trader, in that the company doesn’t have to be formally registered and isn’t legally distinct from the partners.
As with the sole trader structure, you and your partners are eligible for all profits but are liable for any losses or debts.
Limited company
If your business is a limited company, it exists as a separate legal entity in its own right. Operating a limited company requires more admin, as you’ll need to register it with Companies House, pay Corporation Tax, and meet more stringent accounting requirements.
The major advantage is that you won’t be personally liable if your limited company for losses or debts. Plus, being a limited company can make you look more prestigious to clients and customers, which may make a difference in some business sectors.
Plan your 7Ps marketing strategy
When planning how you’ll establish and promote your small business, it may be helpful to keep the 7Ps of marketing in mind.
Also known as the marketing mix, these are the seven key elements of your business that determine how you’re perceived, and how attractive you are to customers. Let’s take a quick look at them in turn.
Product
Your product or service is what defines your business, which is why this is typically the most important of the Ps. Product marketing means highlighting what makes your product or service special and different (its USP), and how it addresses a gap in the market or alleviates customer pain points.
Price
Careful thought needs to go into your pricing strategy. You should undertake market research to see what competitors are charging for similar products or services, and whether you want to position yourself as the premium or the budget-friendly option in your business category. You should also map out how and when you might offer discounts and membership/subscription programmes.
Promotion
The promotion of your business can take many forms. You might decide to pay for search engine marketing plans, or follow our advice on engaging with your potential customers through social media. You’ll want to research which channels are most effective for your business. For example, as an arts and crafts business you’ll probably want to promote heavily on Instagram, while copywriters may want to prioritise posting on Twitter and Linkedin.
Place
Where exactly will your business exist? This is less obvious than it may seem at first glance. While you may have a primary, physical location – say, a café or an office – you may also have to plan out your digital locations. Which social media channels will you inhabit in order to capture new leads and generate interest in your products and services?
Physical evidence
This P refers to the tangible aspects of your business, including your physical premises and business cards, the packaging your products are posted in, and your website, digital receipts and invoices. The reputation and legitimacy of your business can depend on getting these elements right, whether that’s in terms of having an attractive street food stall, a well-designed website, or a professionally set-out invoice.
People
As a new business founder, the “people” component of your 7Ps may simply consist of you. It’ll be down to you to ensure you offer diligent, polite, helpful customer service at all times, whether in person, by phone, by email, or through social media engagement. And, if you do expand by taking on employees, you’ll want to vet them carefully to be certain they’re the right fit for your business, have the right experience, and bring the skillsets you require.
Process
Process refers to the nitty-gritty of how your business operates on a day to day basis. For example, if you’re launching an ecommerce business, you need to be clear on how you’ll manage orders, the logistics of deliveries, and how you’ll handle returns and refunds. If you’re running a food business, you have to decide how and when to order ingredients, and what contingencies to have in place in case a supplier lets you down for whatever reason.
Decide on the business tools you’ll use
One of the advantages of starting a small business today is the unprecedented range of software and hardware tools that streamline the way you work. When writing your business plan, you’ll want to factor in the tech solutions that are most relevant to the work you do.
Here at SumUp, we offer a range of tools that are designed with small business owners in mind. These include:
Card readers, which are portable and efficient, allowing you to quickly take payments whether you’re running a busy street food van or a café
Point of Sale (POS) technology which serves as a simple, all-in-one hub for processing payments, managing orders, and keep track of sales and inventories
Free online business account, which can be set up in moments and allows you to send and receive money instantly with no monthly fee or hidden charges
Write a business plan
Whether you opt for one of the ideas for small business founders we listed earlier in this guide, or you’re interested in something completely different, one thing’s for sure: you need to write a business plan.
Contrary to popular belief, a business plan isn’t just necessary for getting a loan or investment. Writing one will allow you to go through every detail of your business, and map out the road ahead. A good business plan should include:
A detailed executive summary which distils the vital details of your business, including its legal structure
A breakdown of your intended market, including latest trends, key competitors, and information on your target consumer demographics
A breakdown of how the business will be funded and how much will be spent where, including details of business loans and your loan repayment schedule (if applicable)
An overview of sales forecasts, costs and anticipated revenues over a set time period
A breakdown of the staff hierarchy and who will be responsible for what, if you’re intending to take on employees at the outset
A list of the tech tools you’ll use, such as a business account, card readers, and invoicing software.
Our guide to writing a business plan takes a closer look at what’s required and will link you to templates that can make the process quicker and easier.
Ready to get started?
This guide has hopefully inspired you to have a real think about small business ideas, and how you can get the wheels in motion when it comes to working for yourself.
By putting in the market research, carefully delegating your funds and making savvy use of social media, you can forge your own career path this year and beyond.
