Making good decisions for your first year in business

Decide what kind of business you’re setting up

What kind of business structure do you want – sole trader, private limited (LTD) or limited liability (LLC)?

Do your research on what each kind of business demands, including the legal liabilities and admin involved. 

Given that more than 93% choose to set up as LTD, we’ll assume that’s what most of you will go for.

Some of the following won’t apply to sole traders and other corporate body types.

Pick up a business name

This is the fun bit–finding the perfect name that your business will be remembered by in the history books.

Whatever choice you make, take a moment to celebrate. This is a big step, where your dream starts to become a reality.

​​​​​​Nominate your ideal business bank account

It’s important that your company’s cash flow is managed in a business account. But this doesn’t have to be at a bank you currently hold an account with.

What suits your business best? A digital bank with a handy app, or a household name with a local branch? Compare fees with benefits before you decide.

You can find other relevant aspects to consider.

​​​​​Find a marketing strategy that suits you

You’re going to need a marketing strategy in place so that your future customers can find you easily.

Whether that’s securing a physical premises, launching a website, or setting up an e-commerce shop with business social media accounts, you’ll want to create a large presence across the best channels for your new business.

It’s worth checking out this marketing strategy guide to make sure you don’t miss anything important.

Make the right decisions for the best launch possible

Now that you’ve set your business up, you’re ready to launch.

Kick that genius marketing strategy into gear and begin advertising your new website, creating content to garner new followers on social media, and reaching out to potential customers. 

​​​​Prepare to build on your first sale or client

You did it!

Some new business owners might expect to start receiving orders on day one. For others with a more complex or expensive product, it might take a bit longer to land your first big sales. 

Regardless of when you land your first order or deal, it’s important not to get complacent. You’ll need to follow up on it in a professional way so that you attract returning customers and encourage good feedback.

You can also add some flair to your invoice by branding it with your company information and logo, regardless of which QuickBooks package you’re using.

​​​​Find a flexible way to track your cash flow

Keep an eye on the numbers to avoid unpleasant surprises 

Now that you’re up and running, you’ll need to keep an eye on cash flow. Always bear in mind what you owe, and what others owe you. You don’t want to suddenly realise you can’t pay your bills.

Try not to lose touch with what’s coming in and going out of your account, especially when taxes come up at multiple points in the year. 

You can check out this cash flow guide to help you out. 

​​​​​Choose an accurate way to manage payroll 

Make payday as seamless as it is rewarding

If you’re going to pay yourself a salary through the business, you’ll need to pay tax and National Insurance through PAYE.

That means filing the correct amount, and on time. You’ll also need to keep up to speed with the latest tax code changes from HMRC. All this takes you away from running your business.

If you’re hiring other members of staff beyond a certain age and salary, you’ll want to set up a workplace pension to keep employees going beyond retirement.

​​​​Get your VAT registration right

Registering for VAT might not sound​ like the most exciting part of running your new business.​ But if you anticipate reaching £85,000 in taxable turnover per year, you’ll need to ​be on top of this. ​Even if you don’t see yourself earning that much for a while, it’s still worth doing.

You’ll have to charge VAT on customer invoices and file a return every quarter. But ​the good news is that y​ou’ll be able to claim back the VAT that others charge to your business.

Here’s a breakdown of the VAT basics to get you started.

Tick, tock, tax.

VAT returns are due every three months. Mark your diary.

Filing a VAT return tells the government how much tax you’ve charged and how much you’ve paid to other businesses. Returns usually need to be filed quarterly in what’s known as your accounting period. The deadline for submitting your return online is usually one calendar month and seven days after the end of an accounting period.

Almost all VAT-registered companies must now comply with ​Making Tax Digital, so it’s best to start keeping digital records from day one.

If you’re ready to register for VAT online, this guide will make the process far easier.

​​​​Decide what to delegate 

You will naturally care more about your business than anyone else. So it’s natural to want to have oversight across everything. But even the most talented multitaskers run out of time. So delegation is one of the best things to learn early on.

If there are important tasks you lack the time or skills for, it’s okay to ask for help. Knowing when to bring others on board is one of the most crucial decisions you’ll have to make. 

​​​​​Go about growth in a way that works for you 

If you keep growing, sooner or later, you’ll likely need help on a permanent basis. After all, you’re a boss now. Hiring your first employee is par for the course.

There are plenty of walkthroughs for hiring employees online, but we think this is a particularly helpful one.

If you haven’t yet set up payroll to pay yourself or another director, now’s the time to get it up and running.

For each new employee you’ll need to account for tax and National Insurance through PAYE. And don’t forget to add them into the pension scheme you created earlier, so long as they’re eligible​ – find out more.

Consider which customers to prioritise

Repeat custom is the best custom 

As you’ve noticed by now, creating a business requires a lot of decision-making. 

​​One such decision is whether to chase new customers or focus on the ones you have. Thankfully, this is one of the easier decisions to make. Winning business from someone who’s bought from you before is much easier than convincing someone new. ​ ​

​Learn more about marketing to existing customers.

​​​​​Compile statutory accounts by the end of the year

You will need: 

• Your company’s income statement
• A balance sheet
• Your director’s report
• ​​​Footnotes – it’s worth stating that, if you’re a micro-entity, you can get away with abridged accounts

The balance sheet is especially important as it shows how much equity (or net assets) your company has.

Your director’s report is a summary of your company’s performance over the year, including its profits and losses.

And your footnotes are additional notes and explanations about your accounts which can add more context for understanding your financial position.

Think about how to make year two even bigger and better 

As you approach your first business birthday, look at what has worked in year one, and see if there’s anything to be learned from what didn’t go as planned.

To get ready for year two and beyond, you need to know what went well, what your customers want and expect, and where you need to focus attention.

With QuickBooks, the at-a-glance dashboard makes it easy to find insights from your finances. So, you can identify opportunities and risks for the future.

​​​​Find the easiest way to make taxes less taxing

ITSA time management thing

Remember, if you own a limited company, your personal finances are separate from the business account. Any director of a private limited company must return an Income Tax Self Assessment (ITSA), in addition to submitting the company’s taxes. Be sure to look at this guide to make sure you’re not making any errors.

From 2026, you’ll need to use compliant software to keep digital records, and file updates to HMRC at least every quarter under the new ‘Making Tax Digital’ initiative.

​​​​​Pick the right system for your financial records

Making a statement has never been so simple

So, you filed your Self​ ​Assessment. Now you need to do the same for the business in your annual statement. You’ll need to include things like turnover, profits, and tax reliefs.

There’s a lot to consider here, so having a guide to financial statements is always helpful.

QuickBooks keeps accurate financial records to make filing your company tax return as easy as possible.

​​​​​A very important decision: chocolate cake or ice cream? 

Your business is one year old!