Have you been thinking of starting a tech company in the United Kingdom? Well, you’re definitely not one. London, in particular, seems to be an attractive location for tech entrepreneurs. The city has more than 300,000 developers. In contrast, Paris has only about 130,000 and Berlin 80,000.
Moreover, Greater London has more developers than New York and San Francisco. With so many developers in one place, tech start-ups in London can get some of the best programmers in the world to work on their projects.
But starting a tech company isn’t easy. Because of the abundance of overnight success stories, many aspiring tech entrepreneurs rush in without proper planning. Before launching a business, you should carefully consider your capital requirements, initial costs, and potential liabilities. When you first start out, it can be hard to figure out what steps you need to take and even more difficult to secure the resources you need.
There’s no question that the pandemic has also made an impact on the global economy, but it has led to a record growth of 12.3% in UK new businesses.
It all comes down to skill, connections and marketing. Most importantly, since you’ll be working in a fast-paced industry, you must be willing to learn and adapt. While each tech company’s success is unique, there are a few crucial steps that any tech company wishing to thrive in today’s competitive market should take.
First Things First
First, you need a product. Without an MVP or Minimum Viable Product, there’s no point even registering your company. It cost money to register, and you also have to think about taxes. Step one should be building an MVP. Since you’re setting up a tech company, it would be great to have technical expertise or partner with someone who does.
Assuming you’re working on software products, you won’t need a lot of money to build an MVP. You can start writing the code and lay the groundwork. You mostly need to invest time and work.
Pre-Sell Your Product Idea
You can start making money from your product before you even build it. You just need to find your target market and figure out how to pitch your idea to potential investors. You can even sell directly to consumers if you offer them a good offer.
You’re basically taking pre-orders. What matters with this approach is how good you are at selling your vision. If you can do it well, you’re on the fast track out of the “aspiring tech entrepreneurs with no money” stage.
Register Your Company
Most tech entrepreneurs who start a business in the UK choose what’s called a “private company limited by shares” when registering it. This business structure can help you manage your taxes more easily. As the director of your company, you can take a portion of your income from company dividends and pay less income tax.
Another advantage is that if your company gets sued or gets into financial trouble, your personal assets won’t be at risk because of the limited liability. This is very important. You can get sued by customers, suppliers, competitors, shareholders, and, of course, your own employees if you infringe on their rights. You can learn more on this topic by visiting CompensationCalculatorUK.
Before you register your company, you’ll need a name. First, make sure that nobody else is using it whatever you choose. You can do some market research and look at what other tech companies choose as names. You want to come up with something short, catchy, easy to spell, and that relates to what your company sells.
When you register a business in the United Kingdom, much of the information you supply will be made public. This includes:
- Registered office – The address you provide needs to be in the UK, and the company directors need to be reachable there. If you don’t have a separate address for your business, you can use your home address.
- Company directors – You need at least one company director to register.
- Shareholders – You also need at least one shareholder, and yes, it can be the same person as the director. You’ll need to allocate shares to the shareholder or shareholders.
Open a Bank Account
This can be a hassle with high-street banks because the branch managers will ask you a lot of questions about the nature of your business, the directors, the source of your funds and so on. You’ll want to keep your story simple and clear. The more you go into detail, the more suspicious they’ll become. You’re not pitching to investors. For example, if you have a great MVP, which led to a successful crowdfunding campaign, they’ll start thinking about money laundering issues.
The next step will be to register for corporation tax once you begin trading. You have three months to register with HMRC (Her Majesty’s Revenue and Customs). Another key consideration is VAT registration once you reach the threshold.
Get Access to the Right Resources
Whether we’re talking about equipment or human resources, a tech company isn’t complete without the necessary resources to go with it. To run a successful tech company, you need access to modern equipment.
Human resources are also extremely important. You’ll want to hire people that not only possess the expertise to develop your product and help your company grow but who also understand and share your vision.
You’ll also need to put together a strong customer service team to make sure that your customers get good value for the money they invest in your company.
Last but not least, you’ll want to start networking in the tech sector so you can learn from other people’s experience and get access to more business opportunities. Always be on the lookout for new ways to collaborate, as this will help you stay on top of the ever-changing business landscape.
A lot of people think that making a product is the hardest part, but that’s not the case at all! The hardest part is marketing. Once you have an MVP, you’re just beginning your journey. You still need people to know about your product and company.
If your budget is somewhat limited, you’ll be at a disadvantage, and you’ll have to learn how to reach your target audience organically.
One very budget-friendly strategy is finding out where your target audience spends time online and joining these platforms. You’ll want to look for subreddits, Facebook groups, Quora topics related to your niche, Slack channels and other similar platforms. This can result in a ton of inexpensive publicity.