The opening eBook of the Starting category. It assumes you're starting from scratch with limited time and a small budget, and it walks you through the seven decisions that decide whether year one becomes year two.
Members ebook·7 chapters· 55 minute read
Chapter 4
Setting Up the Essentials
The boring operating setup - bank account, registration, simple bookkeeping, insurance - that won't slow you down once orders arrive.
The boring chapter. There's no way to make this part of starting a business sound glamorous, and there's also no way to make a business survive year one without it. Bank account. Registration. Bookkeeping. Insurance. Tax. The owners who get this part wrong spend the first year reacting to small admin emergencies. The owners who get it right barely think about it.
The encouraging news is that there's much less to do than the internet suggests. You don't need an accountant on day one. You don't need three insurance policies. You don't need a bookkeeper, an office or a fancy invoicing system. You need a small, sensible setup that takes a couple of afternoons to put in place and protects you from the things that genuinely cause trouble.
By the end of this chapter you'll have a checklist of seven things to set up before your first invoice goes out, with the order to do them in and the things you can safely skip until later. The aim is to clear the runway, not to build a corporate finance department.
The full chapter gives you the seven-item operating checklist, the one-page bookkeeping system that fits in a single spreadsheet and the insurances actually worth having.
Sole trader or limited company?
The first decision most new owners get tangled in. The honest answer is: it almost certainly doesn't matter much in year one. A sole trader setup is faster, simpler and cheaper. A limited company offers a clearer separation between you and the business, can be a little more tax-efficient at higher income levels and looks more credible to certain customers.
A sensible default for most one-person service businesses with low risk and modest first-year income: start as a sole trader. If income goes above a certain level, or if you're in a higher-risk industry, switch to a limited company in year two. Talk to an accountant for a one-hour paid consultation before deciding. It's the cheapest professional advice you'll buy that year.
If you're in a regulated industry - finance, healthcare, food, construction with significant subcontracting - the rules might force a limited company structure or specific licences. In those cases, the trade body for your sector usually has a clear starter guide.
The seven-item operating checklist
Set up before the first invoice goes out
Choose a structure (usually sole trader to start).
Register with your tax authority for self-employment or company tax as appropriate.
Open a separate business bank account, even if you're a sole trader.
Set up a simple bookkeeping system - a spreadsheet is fine in year one.
Buy the insurances that genuinely apply to your trade (see below).
Decide how you'll take payment: bank transfer, card, cash, invoice terms.
Set up a simple invoice template with all the legally required information.
That's it. Seven items. A focused weekend can clear all of them. Anything else - logo, business cards, brochures, fancy software - is genuinely optional in year one.
The bank account
Even if your tax authority allows sole traders to use a personal account, don't. A separate account, dedicated to business income and expenses, is one of the highest-leverage decisions you'll make. It makes bookkeeping faster. It makes tax season cheaper. It makes the line between business money and personal money clear, which protects both.
Most online-only banks now offer free or near-free business accounts that you can open in an afternoon. The features barely matter in year one. What matters is that the account exists and that you stop running business transactions through your personal current account on day one.
The bookkeeping system
In year one, a single spreadsheet is enough. Three tabs. One for income with date, customer, invoice number, amount. One for expenses with date, supplier, category, amount. One for a running cash balance. Update it weekly. Every Sunday evening, fifteen minutes.
When the business gets to thirty or forty transactions a month, look at moving to dedicated bookkeeping software. The cost is small and the time saved is real. Until then, software is overkill. The companion eBook Tools and Software for Small Businesses goes into the choice when the time comes.
Two habits decide whether year-end is painful or boring. Save every receipt. Categorise every expense. If both habits are in place from week one, you can do a basic tax return yourself in an afternoon, or hand a clean spreadsheet to an accountant for a small fee.
Insurance
Insurance is one of those areas where the noise is much louder than the reality. Most one-person service businesses need a small, sensible set of policies. Two are worth having from day one in most cases. Public liability insurance, in case you injure someone or damage their property in the course of doing your work. Professional indemnity insurance, in case the advice or service you provide turns out to have caused a financial loss.
If you employ anyone, even part-time, employer's liability insurance is usually legally required. If you store stock, contents and stock cover. If you drive for work, business-use cover on the car insurance. Beyond those, most early-stage policies are genuinely optional. Check what your trade body recommends and ignore the upsells.
Taking payment
Three rules. Make it easy for the customer to pay. Make it clear when payment is due. Have a polite system for chasing late payments before it becomes awkward.
For services, deposits up front and the balance on completion is a clean default. For products, payment in full at the point of order is the norm. For larger projects, a third up front, a third at the midpoint and a third on completion protects everyone. Whatever you choose, write it on the invoice and on any quote. "Payment due thirty days from invoice date" is the most common convention. Anything shorter is fine if your customers will accept it.
The invoice itself
A basic invoice in your country usually requires: your business name and address, the customer's name and address, an invoice number, the date, a description of the goods or services, the amount due, the payment terms and your bank details. If you're registered for sales tax, the relevant tax information has to appear too.
Free templates exist in every word processor and most accounting tools. Pick one, customise it once, save it, use it for everything. Don't reinvent the invoice every time. The eBook Tools and Software for Small Businesses lists the simplest free options when you're ready to upgrade.
Things you can safely skip
A long list of things the internet will tell you to set up on day one and that you genuinely don't need until later. A logo designed by a professional. Business cards. A multi-page website. A custom email domain (a free email address is fine for the first ten customers). A trade mark. A formal terms-and-conditions document drafted by a solicitor (a sensible template is enough at first). Accounting software. A virtual office address. A landline number. None of these are wrong. They're just not blocking the first ten sales.
A recurring principle: review results and improve the system
Even the boring setup is part of the system. Build in one habit from day one: a fifteen-minute review every Sunday evening. Update the bookkeeping. Note any unpaid invoices and what you'll do about them this week. Note any expense that surprised you. The owners who do this every week are the ones who never have a finance crisis. The owners who skip it are the ones whose tax bill catches them out in March.
The earlier eBook What is Go-to-Market? makes the case for systems over tactics. The boring setup is the operating version of that argument: a small, repeatable habit beats a heroic catch-up effort every time. The next eBook in this category, Small Business Ideas and Opportunities, helps once you're ready to think about adding the second offer or the second line of business.
What to do this week
Block out one weekend afternoon. Open the seven-item checklist. Tick off as many items as you can in three hours. The bank account, the structure decision and the bookkeeping spreadsheet are the three that matter most. Anything you can't finish, schedule for the following weekend. Don't let the boring stuff stretch across months.
In the next chapter we'll move from the setup to the offer itself - the clear thing a stranger can buy in a single decision.
The rest of this chapter walks through the practical steps, the templates and the checklists you need to put it into action. It includes worked examples, copy frameworks and the small decisions that make the difference between a plan that sits in a drive and one that gets used.
Inside you'll find a step-by-step playbook, a downloadable template, a checklist you can run this week and a short list of common mistakes to avoid before you start.
The full action plan, broken into weekly steps.
Ready-to-use scripts, templates and checklists.
Worked examples for different sized businesses.
Common mistakes and how to avoid them.
Members-only chapter
Become a member to read the full chapter
Members get the complete chapter, the step-by-step plan, the templates and the checklists. Cancel anytime.
