How to start a business in 2025
So you've started 2025 with an idea that you think could be a profitable one. Being your own boss & an entrepreneur is such an exciting journey, but it can be tricky to know where to start! Follow this handy guide to take it from a concept in your head to actual business. We'll take you step by step through setting up your business to its launch.
Establish your idea
Any business starts with an idea, perhaps you have a product to sell or a service to offer. How do you know if it has legs? A practice used by many is to identify a gap in the market known as a niche.
A niche means a specialised segment of the larger market for a particular kind of product or service. For example, in the packaging industry you could identify the needs of a particular demographic like Gen Z who appreciate eco-friendly alternatives like our Eco Friendly Bubble Bag Mailers.
Another method to develop your business idea could be to ensure you are focusing on where your skills lie. If you are knowledgeable about wellness, you could start a business as a nutritional coach, for example. Perhaps you have been growing your social media presence & know that you could capture a large audience through your platform.
A popular idea for our generation is what's known as a side hustle or a passive income business. These can be a great way to dip your toes in the business start-up world with a smaller risk. Find out more here: 25 Passive Income Ideas To Help You Make Money In 2025 | Bankrate.
Once you feel your business idea has been developed you can move on to the next step!
Scope out the market
It's important to understand the market & the industry that you want to enter. Likely you are focusing on something that you are passionate about so you will have some idea, but it goes much deeper than that. You need to make sure there is a demand for your product or service. To do this the first thing you need to do is determine your target audience. That is to say who will be buying your product. What are their needs & motivations? Not only will this help you to develop your product but will also play into how you will launch later too. You also need to identify your competitors. If the market is already saturated with competitors, what are you offering that will give you an advantage? This is known as your 'unique selling proposition'.
You can find this information through surveys, focus groups & market research. You may start with surveys to see what your target audience wants, what is & what isn't important to them & their preferences. Once you have a more defined product or service a focus group can be used to gather the audience’s opinions & insights. Maybe there are negative connotations you haven't noticed or an opportunity you are missing out on. It is important also to conduct broad market research which means to identify trends, threats to the market, competitor’s offerings & emerging opportunities. A tool that many find handy is to complete a SWOT analysis.
Now let's talk numbers! You'll need to understand the market size to estimate your expected market penetration rate. From this you can set your initial financial projections.
Source your product & sales strategy
This can mean a variety of different things depending on your business. Perhaps you are purchasing your products & if so, you will need to work with a wholesaler. Ideally this manufacturer will have a great understanding of your industry & will be someone you believe you can form a strong working relationship with. Look around to find the right fit & make sure their values align with your own. Some manufacturers can adapt with you as you grow.
If you are making your own products, what supplies do you need? How will this impact you in the beginning? Think about space, legal requirements, equipment, computers, software & packaging that will form your initial startup costs.
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An interesting practice to start with could be a drop shipping method. Drop shipping is a retail business model where a seller purchases products from a third party after receiving a customer order. The third party then ships the product directly to the customer. It helps to reduce initial costs & is beneficial to those with limited space.
Think About Your Sales Strategy
Next think about your sales strategy - will you sell online, in person or both? Will you use popular marketplaces like Amazon, eBay or TikTok? By using these platforms, you can capture a larger audience but you should bear in mind that there will be marketplace fees.
At this stage, you should know what your initial expenses will be & estimate your running expenses.
Design Your Business Plan
By now you are ready to create your business plan. A business plan is essential for not only outlining your company's goals & strategies, but it also helps a business to grow & secure funding from investors. Don't be overwhelmed, you have already thought through everything that should be included. Use this guide: Write a business plan - GOV.UK.
Decide on Your Business Name
Not only is this a key step but it can be such a defining moment for your business as you can choose something that reflects exactly what you want to say. It is important that the name you decide on resonates with your brand & audience.
- Be memorable, short & catchy!
- Relevant - tell your audience what you do!
- Unique - don't pick anything that's too similar to something already out there.
- Research - check domain, trademark & social media handles are available.
Register your domain here: GoDaddy. Learn about trademark registration: Register a trade mark - GOV.UK.
Build Your Business Structure
Your business structure creates a proper foundation for your business. It's important that you select the right one for you.
- Sole trader
- Partnership
- Corporation
- Limited liability company (LLC)
The structure you choose will have an impact on many areas from tax requirements to liabilities. Don't worry though, if needed, you can change your business structure as your business evolves.
Funding
Starting a business can be expensive but there are many ways to get funding, including loans, grants, crowdfunding, and investments. A grant can be an attractive option as it may only need to be partially repaid or not at all. Crowdfunding is another excellent option if you have a strong social media or community presence.
Find info on available financial options here: Finance and support for your business - GOV.UK.
Register Your Business
You must register your company in the UK to ensure you are operating legally. The process will vary depending on your business structure:
- Sole Trader: Easy to register and you only need a National Insurance number. You retain all profits after tax but are personally responsible for any financial losses.
- Limited Liability Company (LLC): Separates personal and business finances. Requires registration with Companies House and issuance of a ‘certificate of incorporation’.
Learn more: Set up a business - GOV.UK.
Branding
Building your brand is more than just a name & logo; it should tell your story. Your brand should align with the mission statement you outlined in your business plan. Use tools like Canva to design your logo, slogan & colour palette.
In 2025, key branding considerations include:
- Personalisation
- Authenticity
- Storytelling
Launch & Market
By now you're ready to bring your brand to the market! Timing is important—consider key dates or seasons that may impact your launch. Building an online presence in advance can make your launch more successful. Social media is crucial, with video content projected to account for 80% of internet traffic in 2025. Focus on platforms like TikTok and Instagram to reach Gen Z consumers.
Good luck with your new business venture!