Starting a business is an exciting venture. It’s a chance to bring your vision to life, build something from the ground up and make a meaningful impact in your industry. However, as anyone in business for more than five minutes will tell you, it’s not always smooth sailing. Running a successful business requires more than a good idea – it takes careful planning, sound financial management and an understanding of what it takes to stay profitable in a competitive market.
In this guide, we’ll cover the essential steps to starting and running a business, from laying the groundwork to keeping things running efficiently.
Laying the foundations
The success of any business depends on solid foundations. That means starting with a clear business plan outlining your goals, target market and the products or services you’ll offer.
Your business plan should also include financial forecasts, which will help you understand how much capital you’ll need to get started and how long it will take to become profitable. According to a recent study by Xero, nearly 60% of small businesses fail within the first three years due to cashflow issues. This highlights the importance of understanding your financial needs early on and planning accordingly.
In addition to financial planning, you should ensure legal compliance. This means registering your business, setting up appropriate tax arrangements and meeting your industry’s regulatory requirements.
Securing funding
Once you’ve got a business plan, you’ll need to think about how you will fund your business. There are a few options available depending on your circumstances.
For many startups, personal savings or loans from family and friends are a common source of funding. However, this isn’t always enough to get a business off the ground, especially if you have significant startup costs. In that case, you might want to explore options like a bank loan, venture capital or crowdfunding.
One important thing to keep in mind is that securing external funding often comes with obligations. For example, if you’re taking out a loan, you’ll need to have a clear plan for how to repay it. If you’re working with investors, they’ll likely expect a return on their investment, which could impact your business decisions.
Managing finances effectively
Once your business is up and running, managing your finances becomes crucial to its long-term success. This includes keeping accurate records, tracking your income and expenses, and staying on top of your tax obligations.
There are plenty of tools available to help with financial management. Cloud-based accounting software like Xero or QuickBooks can simplify invoicing, expense tracking and tax reporting tasks. These tools also give you real-time insights into your financial health, which can help you make better business decisions.
A common mistake we see is business owners neglecting their cashflow. Even if you’re profitable on paper, you’ll run into trouble if you don’t have enough cash coming in to cover your expenses.
Research by Intuit suggests that 82% of businesses that fail do so because of cashflow problems. To avoid this, ensure you’re keeping a close eye on your accounts receivable, paying your bills on time and planning for periods when cash might be tight.
Growing your team
As your business grows, so will your need for additional help. Hiring your first employee is a big step, and it comes with responsibilities. You’ll need to consider recruitment, contracts, payroll and compliance with employment laws.
There are also some financial considerations when it comes to hiring. Beyond paying a salary, you’ll need to factor in national insurance contributions, pension schemes and other benefits. Make sure you have a clear understanding of these costs before you bring anyone on board.
Staying compliant with tax laws
Tax is one of those areas that can trip up even the most experienced business owners. From VAT to corporation tax, staying compliant is crucial to avoiding penalties and ensuring your business remains on the right side of HMRC.
One of the easiest ways to stay on top of your tax obligations is by working with an accountant. They can help you understand your tax liabilities, make sure you’re taking advantage of any available reliefs and ensure you’re meeting deadlines.
Another area to be mindful of is Making Tax Digital (MTD), HMRC’s initiative to modernise the UK tax system. All VAT-registered businesses are now required to keep digital records and submit their returns using compatible software. From April 2026, MTD will also apply to income tax for self-employed individuals and landlords with income over £50,000.
Leveraging technology for efficiency
Technology plays a key role in ensuring efficiency and staying competitive in today’s business environment. Numerous tools, from project management software to customer relationship management (CRM) systems, are available to help streamline your operations.
Using these tools can help you reduce manual tasks, stay organised and improve communication with your team and customers. For example, automating your invoicing process or using scheduling software to manage appointments can save you valuable time and reduce the risk of human error.
Planning for the future
Running a successful business isn’t just about what’s happening today – it’s about planning for the future. This means regularly reviewing your business plan, setting long-term goals and making sure you’re prepared for any changes in the market.
It’s also worth considering your exit strategy. Whether you plan to sell your business, pass it on to a family member or simply wind things down, having a plan in place can make the process smoother and ensure the best possible outcome.
We can help
Starting and running a business is a rewarding experience, but it’s also a challenging one. By following the steps outlined in this guide – from creating a solid business plan to managing your finances effectively – you’ll be well on your way to building a successful business.
If you need help, Langdowns DFK is here to provide expert advice and support tailored to your specific needs.
Get in touch with us to chat about running a successful business.
