New Business Expenses

If you are thinking about starting a new business, the first thing you need to consider is whether or not you have the financial means to strike out on your own. A lot of people think that starting a new business is as simple as saying “I’m starting a new business” and then going out to find clients. Unfortunately there is a lot more too it and most of it requires money.

If you are interested in starting a business in the UK, Startups is a great place to find information and inspiration to keep you focused on your goals. This site has information about finding financing, the legal issues involved with starting a business and plenty of inspirational articles about other people who have started their own businesses and the processes they went through.

First you have to decide on what kind of business you are going to run. Are you going to be a sole trader or are you going to be a partnership or Limited company of some kind?

Here are some of the costs involved in being a sole trader:

National Insurance and Taxes: This is how much money you will pay in taxes. Luckily if you are a sole trader, the accounting part of how much you will owe in inland taxes is going to be very straightforward. Make sure to keep track of all of your business transactions because you will pay a tax on all of the profit that you make. You will also have to pay for insurance on those profits.

You will also need to register for VAT (or “Value Added” Tax). This doesn’t happen automatically upon declaring yourself “self employed” or a sole trader. There is extra paperwork that needs to be filled out and you will be expected to pay taxes on any profit amount over sixty four thousand pounds a year.

Business insurance is also a necessity. You will want insurance to cover your business. You might also want to think about taking out an Employers Liability and a Public Liability as well.

Make sure that you reserve your business name. This is fairly cheap, only twenty nine pounds a year, to make sure that your business name can’t be taken by anybody else.

Then, of course, there is the funding involved in finding a place from which to operate your business, whether or not you will need employees, buying office supplies, and all of the other expenses of getting an office up and running.

If you do not already have funding in place for this, you might want to consider getting a business loan. Business loans are for people in just your position—people who are trying to set up a business and get it off the ground. These loans can be granted to just about anyone who is starting a business provided they can provide proof that the money will be used for business purposes and not to pay off other, personal debts.