Starting your own business opens doors to countless opportunities. For some, it’s about achieving financial independence—where you’re in control of profits and not tied to a monthly paycheck. For others, it’s a chance to pursue a passion, make a difference in their community, or bring an innovative idea to life. Whether it’s about personal fulfilment, impact, or growth, running your own business can be the start of something remarkable.

Before you start a business, you’ll need a business idea. What will your business do, sell or provide? Who will your audience be – and what are they missing from their lives? This involves a combination of passion, market research, and a bit of gut instinct.

Research Your Target Market

To create a successful business idea, you first need to think about your niche. You’ll need to do research into the specific market segment, both in terms of location and demographics, that might be crying out for a business like yours.

Perhaps you live in a small town without a bakery—and you happen to be an exceptional baker. Or maybe you run an IT consultancy specialising in helping regional start-ups get set up with the latest tech at competitive prices.

To find your niche and understand your audience, you need to do some careful research:

• Identify their needs and wants: What problems are they facing? What are their aspirations? What are they willing to pay for?
• Understand their demographics: Age, location, income, interests, and buying habits all play a role in understanding your target market.
• Analyse market trends: Look carefully at your industry. Are there current trends that you can capitalise on? Or ones that you think might be coming around the corner?

Thorough market research can help you determine if there's a real demand for your product or service. It can also help you identify your competitors and understand how you can differentiate yourself. To do it, you can think about techniques like conducting surveys or detailed market analysis.

For a deeper dive into developing a winning business strategy, check out our articles on business strategy.

Define your Unique Selling Point (USP)

In today’s competitive marketplace, your audience needs to know why your brand is different from the rest. Why should your customers shop with you and not a competitor? What can you offer them that is different?

To get to the bottom of this, you’ll need to think about your unique selling points (USPs). These are the key factors that set your business aside from the rest.

You don’t necessarily need to have invented an entirely new product or offer a service that has never been seen before by any means. However, you should identify something fresh that sets you apart in your target market—something they can’t easily find elsewhere in the sector. The key is to find the sweet spot where your audience's needs align with what your business excels at.

Here are some examples of simple but effective USPs:

• Lower prices. Competitive pricing is always a draw for budget-conscious customers.
• Great quality. If you can source products or offer services that are a cut above the competition, the customers will keep coming back.
• Top-notch customer service. If you’ve got people skills, product expertise and some great promo ideas, you could build up a solid audience quickly.
• Unique features or benefits. Have you hit upon something truly unique that your industry hasn’t seen yet? Then communicating this effectively will be essential.

Once you’ve thought about a USP, it’s a good idea to craft a value proposition defining what you do, your USPs and how you offer something different. You can use this to focus your marketing, branding and comms.

Read our guide on writing value propositions.

Once you’ve developed your business idea and refined your USPs, the next step is turning your concept into reality. A business plan acts as your roadmap, detailing your goals, strategies, and projections to guide your brand’s growth and keep you focused.

It’s more than just an internal tool—it’s a key document for securing support. Investors and backers will expect a solid, well-thought-out business plan before committing their trust and resources to your venture.

Key components of a business plan

A comprehensive business plan typically includes:

1. Executive summary. A concise overview of your business, including your mission, vision and key objectives.
2. Market analysis. A deep dive into your target market, including customer needs, competitors, and market trends.
3. Customer segmentation. Building on the niche you identified earlier. It’s a chance to break down your specific audience in more detail. 
4. Financial projections. How much do you expect to bring in each year? You’ll need forecasts for revenue, expenses and profitability, including a cash flow statement.
5. Operations plan. A description of how your business will operate, including your production process, staffing needs, and supply chain management strategy.
6. Marketing plan. A strategy for reaching your target market and promoting your products or services. Your value proposition will come in handy here.
7. Management team. Finally, include key information about the people who’ll be running your business, including their experience and qualifications.

Learn more about planning and writing your business plan.

Using the Business Model Canvas

The NatWest Business Model Canvas helps you visualise the different elements of your business plan on one page. It helps you connect the dots between suppliers, channels, customers and you.

It includes sections for:

• Value propositions: The benefits you offer to your customers.
• Customer segments: The groups of people you are targeting.
• Channels: How you will reach your customers.
• Customer relationships: How you will interact with your customers.
• Revenue streams: How you will generate income.
• Key activities: The essential activities your business needs to perform.
• Key resources: The assets your business needs to operate.
• Key partnerships: The relationships your business needs to succeed.
• Cost structure: The expenses associated with running your business.

Sound good? Check out the NatWest Business Model Canvas and fill yours in today.

The business structure you choose is a critical decision that influences how your company operates, handles liabilities, pays taxes, and plans for growth. Selecting the right structure requires thoughtful consideration of your business goals, operational needs, and long-term strategy.

Common UK business structures

Sole Trader

• Definition: A sole trader is a business owned and operated by one person.
• Liability: The owner is personally liable for all business debts.
• Taxation: Profits are taxed as personal income.
• Administration: Relatively simple to set up and manage.

Partnership

• Definition: A partnership is a business owned and operated by two or more people.
• Liability: Partners are generally personally liable for business debts.
• Taxation: Profits are taxed as personal income for each partner.
• Administration: Requires a partnership agreement to outline the responsibilities and obligations of each partner.

Limited company

• Definition: A limited company is a separate legal entity from its owners.
• Liability: Owners are only liable for the amount they have invested in the company.
• Taxation: The company pays corporation tax on its profits.
• Administration: More complex to set up and manage, with additional reporting requirements.

Limited liability partnership

• Definition: A limited company with two or more partners, or “members”.
• Liability: Partners are only liable for the amount they have invested – they are not liable for business debts that cannot be paid.
• Taxation: Partners pay tax on their share of the profits.
• Administration: More complex to set up and manage, with additional reporting requirements.

Registering your business

Once you've chosen your business structure, you need to register your business with Companies House.

Here's a step-by-step guide:

1. Choose a business name: Make sure it's unique and available.
2. Determine your business address: This can be your home address or a commercial address.
3. Complete the registration form: You can do this online or by post.
4. Pay the registration fee: The fee varies depending on the type of business structure.
5. Receive your certificate of incorporation: This confirms that your business is legally registered.

Find out more and register your company.

Starting a business comes with plenty of exciting milestones—from unlocking the doors to your first physical premises to hiring your first employee or launching a new product line. These moments can define your journey, but achieving them often requires the right financial support.

Here are a few business funding options. Security may be required. Product fees may apply. Over 18s only. Subject to status.

Personal Savings

• Pros: If you can finance your business with personal savings, then you can maximise your stake in the business and won’t be answerable to investors or banks. You won’t pay interest or shoulder any debt either.
• Cons: Plunging all your money into a business is a big commitment and could lead you with very little else for personal use. You also may struggle to cover your startup costs.

Take a look at our business savings accounts. Eligibility criteria apply.

Business Loans

• Pros: Business loans are a straightforward option that could be useful if you need quick access to cash. It’s normally relatively easy to apply, and you can often access your money quickly. Many banks will offer flexible repayments too.
• Cons: Banks normally need a solid credit history to offer a loan, which can make life tricky for startups with little experience of borrowing. Your business strategy may also come under scrutiny. Then, there’s interest – which can be higher for smaller businesses, which a bank might consider to carry more risk.

Browse our business loans. Security may be required. Product fees may apply. Over 18s only. Subject to status.

Investors

• Pros: Finding external investment can take different forms. You can look for angel investors (individuals who offer startup funding to like-minded businesses in exchange for part-ownership), or venture capital firms. These can give you a much-needed influx of cash and are often willing to take certain risks in your business that a bank perhaps wouldn’t.
• Cons: Securing angel investors or venture capital is quite competitive. Plus, you’ll have to part with a stake in your company.

Crowdfunding

• Pros. This DIY financing approach is a great choice for tech-savvy startups who want to build a community. Using social media and crowdfunding platforms like Kickstarter, you can secure small donations from the public – sweetening the deal with perks and discounts down the line where possible. It’s a great way to build buzz.
• Cons. It can be difficult to secure the quantity of donations you need to reach your targets. You’ll need a solid strategy to get the best out of your chosen platforms and audience. Plus, you’ll have to pay certain fees to the platform too. You’ll also need to be careful not to over-promise perks that you can’t deliver.

Managing costs and cashflow

Another way to raise capital is simply by good old-fashioned budgeting and money management. Here are a few tips.

• Create a detailed budget. Track your income and expenses carefully to ensure you have enough cash on hand to cover your operating costs.
• Negotiate good payment terms with suppliers. Relationships are everything in business. Getting a good price for repeat custom, or flexible repayments, can help you manage your cash flow and avoid large upfront expenses.
• Offer incentives for early payments. When it comes to your own invoices, you’ll need to make sure customers pay their invoices promptly.
• Explore alternative financing options. Consider invoice factoring or merchant cash advances if you need short-term funding.

Once you have your business structure in place and funding secured, it's time to get yourself set up to trade. 

Open a business bank account

For most businesses, a dedicated business bank account is essential for separating your personal finances from your business finances. This makes it easier to track your income and expenses, manage your cash flow, and comply with tax regulations.

Browse our business bank accounts to find the right one for you. We also offer Mettle, a mobile bank account made specifically for sole traders. Specific account and service eligibility criteria apply.

Choose tools and software

There is a wide range of tools and software available to help you manage your business operations. Key areas to consider include:

• Accounting software. If accounting isn’t your strength, tools like FreeAgent can help you track income and expenses, generate financial reports, and manage taxes with ease. Eligibility criteria apply.
• CRM systems. Managing a growing customer base? CRM tools allow you to organise contacts, track interactions, and enhance customer service—all in one place.
• E-commerce platforms. If you’re a retailer, an e-commerce platform could help you reach a whole new audience. Set up an online store and sell your products or services online to people all over the world.

Find suppliers and partners

Finding suppliers and partners that you trust is key to a successful business.

• Negotiate favourable terms. As we mentioned above, it’s important to get the best possible prices and payment terms where you can, to keep costs down. There’s no real set way to do this – it often comes down to negotiation, people skills, loyalty or other factors.
• Build trust and rapport. Building strong relationships with suppliers and partners is crucial for any business. Without these, you could end up isolated in your industry or paying over the odds for stock and suppliers.
• Diversify your supply chain. By reducing your reliance on any single supplier, you won’t feel as much of a bump if they're unable to obtain certain products or go out of business.

Now you’ve got the bare bones of your business together, it’s time to get your name out there.

Develop a brand identity

A strong brand is essential to capturing your audience’s imagination. You’ll want to blend eye-catching logos, brand colours, fonts and other visual elements alongside a recognisable and relatable tone of voice. Let’s break these down in a bit more detail. 

• Logo design. A visual representation of your business – like the McDonald’s ‘M’ arches, or the distinctive Apple on the back of your iPhone.
• Brand colours. A palette that reflects your brand personality. Here, simple is often best. Coca-Cola is red, Pepsi is blue – and people recognise this all over the world.
• Tone of voice. The way you communicate with your audience on social media, websites, visual creatives and more.

Marketing your business

Your marketing strategy can be as sophisticated or as straightforward as you choose.

• Social media. Connect with your target audience on platforms like Facebook, Instagram, and TikTok. Each of these involves different formats and features, has a different core audience, and will also follow different trends. Researching these carefully and honing your approach to each platform is essential.
• SEO (Search Engine Optimization). SEO techniques involve optimising your website landing pages, digital content, social media descriptions and product titles to drive traffic from search engines. You’ll first need to research what your target audience is searching for online. Then, it’s time to angle your website copy and metadata to fit those searches.
• Email marketing. With CRMs and mailer platforms, you can create an email list and send engaging, targeted campaigns to your customers in bulk.

To create a strong online presence, consider using tools like:

• Website builders. Easy-to-use platforms can help you create a professional website. They are ideal for beginners, while larger businesses may need more advanced systems.
• Social media management tools. Simplify scheduling, track engagement, and analyse performance using built-in analytics or external tools designed for scheduling and reporting.
• Email marketing platforms. Create and track email campaigns, manage your lists, and analyse campaign results to refine your strategy.

Test and refine

Once you launch your business, both physically and digitally, it's essential to gather feedback from your early customers and try out different tactics based on their input. By continually testing and refining, you can ensure that you're meeting the needs of your customers and staying ahead of the competition.

• Ask for reviews and testimonials. Get direct feedback on your products or services. You can incentivise this with money off purchases of freebies.
• Monitor customer feedback. Track online reviews and social media mentions. It’s a good idea to be active in the conversation too. Adding a simple high-five emoji to a positive comment can help boost its reach and leave the customer feeling recognised and appreciated. Likewise, addressing a negative comment seriously and respectfully can help you keep people on your side. 
• Conduct surveys and focus groups. If you need more insights, you can conduct deeper research into how your launch has resonated with the public.

Starting a business isn’t easy – but if you’re aware of the challenges and pitfalls, you may be able to avoid them. 

Here are a few common bumps to avoid.

• Managing cash flow. Ensuring you have enough cash on hand to cover your expenses is crucial. Without this, you could end up in debt and legal trouble, or be unable to pay staff and suppliers.
• Regulatory compliance. Navigating the complex web of council, government and tax regulations can be daunting. Make sure you ask for support on any regulations you’re unsure of.
• Competition. Standing out in a crowded market can be difficult – so staying on top of trends and competitors is crucial. 
• Finding and retaining talent. Attracting and keeping skilled employees is essential for growth. Make your business a great place to work, and people will apply for jobs and retain them.
• Marketing and sales. Reaching your target audience and generating sales can be challenging, especially when you’ve just launched. You’ll need to take time to build up trust and recognition in your brand.

At NatWest, we know that starting a business is a challenge – but it’s an adventure too.

That’s why we offer a range of products and services to help you succeed, including:

• Business accounts: Choose from a variety of business accounts to meet your specific needs. Eligibility criteria apply.
• Business loans: Access the funding you need to grow with our business loans. Security may be required. Product fees may apply. Over 18s only. Subject to status.
• Financial planning tools: Get expert advice and support to manage your finances effectively.

Explore NatWest’s business banking solutions today and take the next step towards building a successful business.