What is a profit and loss sheet? What to know and how to build one

Discover what a profit and loss sheet is, how it tracks business revenue and expenses and why it’s essential for financial planning.
Written by lucy.nixon
Updated on 7 July 2025

One of the most important ways business owners can keep track of their finances is with a profit and loss sheet – which will be beneficial when it comes to doing your accounts.

This often overlooked document is a legal requirement for limited companies and helps you to understand your revenue, expenses and overall profit, allowing you to make accurate budgets, projections and plans.

Good financial management skills are essential for anyone starting a business and in today’s unpredictable economy, small business owners need to keep their fingers on the pulse.

So what is a profit and loss sheet and how can you build one for your business?

💡Key takeaways

  • A profit and loss sheet (P&L) is a financial report that shows how much your company has earned versus how much it has spent in a specific period.
  • It is normally combined with a cash flow forecast and a balance sheet to show the financial performance of your company.
  • There are seven main components: revenue, Cost of Good Sold (COGS), gross profit, operating expenses, operating income, non-operating expenses, and net profit.
  • The most common reporting period for a profit and loss report is quarterly, as well as one annual report, but some businesses might prefer weekly or monthly.
  • A profit and loss sheet is a vital tool for businesses, and should be analysed to help you identity areas for growth.

This article will cover:

What is a Profit & Loss statement/sheet?

A profit and loss statement is a financial document that details the difference between how much your business has earned and how much it has spent.

The document includes an itemized list of every source of revenue and every expense along with the resulting net profit or loss.

Companies will usually create profit and loss statements quarterly and annually, allowing them to keep track of their finances and conduct accurate financial reporting.

A profit and loss sheet is usually created alongside two other financial documents, a cash flow forecast and a balance sheet.

While a profit and loss sheet focuses on the profits made, a cash flow forecast predicts future income and outgoings and a balance sheet provides an insight into a company’s assets, liabilities and equity.

Combined, these documents provide an in-depth look at the overall financial performance of your business.

Seven components to include in a Profit & Loss Sheet

A profit and loss sheet should include the following:

1. Revenue

Revenue is everything that comes into your company over a set period of time. This includes money from things such as sales, interest, subscriptions and royalties.

2. COGS

COGS refers to the Cost of Goods Sold and covers all of the costs associated with producing and/or purchasing the goods that your business sells, for example raw materials.

3. Gross Profit

Gross profit is the income that is left over after you have deducted the cost of goods sold (COGS) from the revenue.

4. Operating expenses

Operating expenses are costs that your business incurs during regular operations such as for office supplies or staff salaries.

5. Operating income

Operating income is the profit (or loss) that is left over once you have deducted all of your operating expenses.

6. Non-operating items

Non-operating expenses are costs that are not directly related to your regular operations such as legal fees or restructuring costs.

7. Net profit

Net profit, also known as net income or the bottom line, is what’s left over once you have deducted all costs from your revenue. This figure will indicate whether you are operating at  a profit or a loss and this money can be saved, spent or reinvested.

How to build a P&L statement in 9 steps

Creating a profit and loss statement is simple, you just need to follow the steps laid out below.

Step 1: Decide on your reporting period

First things first you need to decide what reporting period you are going to use for your profit and loss statements. The most common option is quarterly and one annual report too, however some businesses opt to create them weekly and monthly.

It’s important to stick to your reporting schedule so that you can make accurate comparisons.

Step 2: Keep track of your revenue

Every time your business makes money, keep track of it! You can do this on a spreadsheet or with accounting software.

However you choose to do it, add a note that details the source of each revenue and add categories so that you can easily see which areas bring in the most money.

Step 3: Calculate your COGS

The Cost Of Goods Sold (COGS) refers to all of the costs that are directly associated with creating or sourcing the products or services that you sell. This could include material costs or labour fees but excludes things such as office rent.

Remember, COGS is tax deductible as a business expense too!

Step 4: Determine gross profit

To calculate your gross profit you need to subtract the cost of goods sold from your revenue.

Step 5: Calculate operating expenses

Your operating expenses are the costs you incur to run your business, such as office space rent, marketing fees, legal fees, insurance, accounting software etc.

Operating costs are also tax deductible as a business expense!

Step 6: Calculate depreciation and amortization

Depreciation is the wear and tear of your physical assets, such as machinery, and should be included in your profit and loss sheet.

It’s usually calculated by estimating how long you expect the asset to continue making you revenue and how much you could earn if you sold the asset (salvage value).

Depreciation = asset’s original cost –  salvage value / estimated useful life

Amortization is the wear and tear of digital assets and can be calculated in the same way.

Both of these can be listed on your profit and loss statement as an expense.

Step 7: Calculate your operating profit

Your operating profit is the amount you earn from your core business functions after you have deducted your operating expenses, depreciation and amortization.

If your operating profit turns out to be less than your operating expenses, this means you are operating at a loss.

Step 8: Calculate any interest or taxes

If you have any business loans or credit cards, you’ll need to calculate all of the interest you’ve paid on those during the reporting period too.

You can also use your profit and loss sheet to calculate your effective tax rate.

Effective tax rate = income tax expenses / net income

Step 9: Calculate your net profit

The final step is to calculate your net profit in order to determine if you are in a profit or a loss.

Net profit = gross profit – all expenses and taxes

Other ways to calculate profit and loss

There are various other ways you can calculate your profit and loss too, including:

1. Single-step method

A single-step profit and loss statement uses just one equation to calculate net income:

Net income = all revenue – all expenses

2. Multi-step method

A multi-step profit and loss statement calculates gross profits, operating income and net income:

Gross profit = revenue – cost of goods sold

Operating income = gross profit – operating expenses

Net income = operating income + non-operating items

3. Cash method

With a cash method profit and loss statement, you simply document when cash goes in or out of the business. Incoming cash is recorded as revenue and outgoing cash is recorded as a liability.

Analysing your profit and loss statements

It’s all very well to build your profit and loss sheet but as a small business owner you need to be able to analyse and understand it too.

Here are our top tips for analysing your profit and loss statements to ensure you get the most value:

  • Compare your revenue over different periods in order to spot seasonal trends and common periods of growth.
  • Take a look at your gross profit in order to determine if your current pricing model is sustainable.
  • Monitor your expenses and look for unnecessary costs that can be cut.
  • Measure your performance against your competitors and industry benchmarks to stay competitive.
  • Combine your profit and loss sheet insights with the data from your cash flow forecast and balance sheet to plan your financial future.
Benefits of building a profit and loss statement

There are various benefits to creating a profit and loss statement for your business such as:

  • Helps to identify areas for business growth.
  • Allows you to track your financial health.
  • Assists with setting budgets and prices.
  • Provides crucial data for potential investors and lenders.

Conclusion

A profit and loss sheet is more than just a piece of compulsory reporting for your business, it’s a vital tool to keep track of your finances and support future growth.

By regularly analysing revenue trends, expenses and profit margins, you can identify areas of success and budgets that need improvement.

In 2026 the economy can feel uncertain for small business owners which is why equipping yourself with as much knowledge and insight into the financial health of your business as possible is important.

Whether you’re a new business owner or a seasoned pro, up to date profit and loss sheets will help you navigate financial challenges and build a profitable future for your business.

Lucy Nixon profile
Lucy Nixon - content writer

With 10 years experience in the digital marketing industry, Lucy is a content writer specialising in ecommerce, website building and all things small business. Her passion is breaking down tricky topics into digestible and engaging content for readers. She's also committed to uncovering the best platforms, tools, and strategies, researching meticulously to providing hand-on tips and advice.

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What commercial classifications apply to business premises?

The property categories you need to be aware of when choosing premises
Written by lucy.nixon
Updated on 7 July 2025

Before you negotiate the lease or purchase of a property you must check what commercial classification it currently falls under. Commercial premises come under certain categories of use and if you don’t have the appropriate classification you may not be able to run a specific type of business there.

The main types of commercial classification are as follows for business:

A1 – used for shops A2 – professional and financial services such as banks, solicitors and estate agents A3 – food and drink establishments

If the property does not already have the correct classification for your type of business, you need planning permission from your local authority. You must bear in mind that planning consent might not be accepted if the local authority feels the change of classification would not benefit the area.

When making a decision, the local authority will take into consideration factors such as whether there is a need for that type of business in the area, traffic and parking requirements, likely causes of nuisance such as noise, smells or environmental hazards the business may cause, trading hours and objections from other occupiers and residents.

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10 steps to better negotiation skills

With the pressure to secure value from deals higher than ever, we asked the experts for tips on perfecting the art of negotiation
Written by lucy.nixon
Updated on 7 July 2025

Entrepreneurs and experts reveal the secrets behind striking the best deal

“Almost every aspect of the business landscape is negotiable,” says Andrew Simmons, managing partner of negotiation specialists The Gap Partnership. In recessionary times, this can work in your favour, as the pressure to get the most out of relationships and realise value from deals is higher than ever.

So whether you’re faced with suppliers looking to hike prices, clients extending their payment terms, fixing a price for new business or dealing with an employee’s request for a pay rise, understanding the art of negotiation will considerably increase your chances of a positive outcome.

There is a lot more to negotiation than open-ended questioning and other sales tricks, and a few key principles will stand you in good stead no matter what you’re bartering over. We have distilled the advice of a number of experts into 10 top tips for perfecting this crucial, and sometimes undervalued art.

Preparation is everything

“You can’t wing negotiations,” says Mark Jacobs, marketing director of sales and business management training company, The Mdina Partnership. “You’ve got to know your audience, what they want and what questions you need to ask.”

The first step is to understand what’s driving the party you’re negotiating with, and where their priorities really lie.

Tailor your response

Figure out what type of individuals you are dealing with and talk to them in a language they recognise. In short, find out how to push their buttons. Kevin Dougall, managing director of AP HR Solutions, uses a four-colour system to make an initial assessment of a person: a blue person is formal, precise and analytical, and needs a lot of data before they can make a decision; a red is purposeful, demanding and competitive, and more intuitive; green people are caring, relaxed and patient, and don’t like to rush things; yellows are warm, expressive, sociable and often persuasive.

Once you’ve determined who you’re dealing with, adapting your approach will make negotiation easier. Blues, or thinkers, will want lots of information, reds, or knowing people, just want the bare bones, while yellows and greens prefer stories or diagrams. However, it’s important to understand what type of person you are, too. “If they’ve got a strong [red] knowing person, putting your own strong competitor or thinking person in against them is not going to work,” says Dougall. “Instead, look for your own [green or yellow] pleaser, or feeling person, to help make the other party feel like they are winning. You need to adjust who talks to who about what.”

Listen carefully

“Nature gave us two ears and one mouth, and in life – generally, you’ve got to use them in that proportion,” says Dougall, adding that this is the best way to understand who you’re up against. He recommends asking the other party what they want to get out of the negotiation, and advises an initial face-to-face meeting to discuss this before getting into the specifics.

Simmons believes knowledge is power. “The more you say, the more you give away,” he says. “Exercise control, be quiet. Ask lots of open questions. Let them talk, listen and take notes.”

Be mentally prepared

We give 55% of what’s going on in our head away through our body, and face-to-face is usually the preferred medium for negotiation. So you need to take the right mental approach. If you feel subordinate, it will be hard to cover this up and will set the wrong tone from the outset. Even your most junior staff should be encouraged to think of negotiation as a business-to-business discussion.

“Whatever’s going on in your head will come out of your body,” says Jacobs. “If a junior salesperson is trying to sell something to someone senior, their approach might be subservient. That is a terrible negotiating position.”

Instead, those entering into negotiations should think: “We all need each other.” Know the value of what you’re offering, and how it helps the other party. Once your head is clear, you will feel in control and can take the lead through questioning.

Discuss, don’t sell

Negotiation should be a discussion of how to achieve a mutually agreeable outcome, not a selling exercise. “The classic sales pitch is ‘look what we can do for you’,” says Jacobs. “What you should be saying is: ‘This is what we do and what we can offer. How can it help you?’ This gives you something to negotiate with, as they’re telling you why they want your product or service.”

Also try to identify trade-offs – things you can offer that are of a low cost to you, but high value to them, or “coinage”, according to Jacobs. Let’s say you’re selling IT systems, and part of the offering is two days’ on-site help from your engineer. You could give them three days, because you already pay for that person, so a day here or there doesn’t cost you much. But if you usually charge your engineer out at £500 a day, that’s valuable to them. In other words, how can you help them to help you?

“If it’s your product or service on the table, the key issue is trying not to move on price,” says Jacobs. “So what can you agree to give them that means they still buy at the original price?”

Take some time out

Don’t be afraid to ask for a break in negotiations to collect your thoughts. “You need time to go away and reconsider,” says Dougall. “Unless you’re up against an absolute fixed deadline, be prepared to ask for time out, and use this to recalibrate your thought processes.”

Understand your position…

Before you enter negotiations, form three positions in your head: what you could get away with – which is usually your opening bid; what you expect to get, based on a knowledge of your market; and your deal breakers. Or, as Jacobs puts it: your “mega win”, your “expected win” and your “walk away”. “In the heat of the battle, it’s easy to give more away than you want to. It’s quite an emotional thing,” he says. So it’s vital to work out these positions in advance.

Simmons recommends being extreme, but realistic with your opening bid. “Move from this position to give them the satisfaction of winning,” he says. “This helps them become more agreeable. You need trust for collaboration to work. Unrealistic positions damage relationships.”

…and get to know theirs

One of the biggest mistakes negotiators make, according to Jacobs, is failing to uncover their opponent’s position. When selling, for example, if a potential customer does not want to pay your asking price, ask them what they do want to pay.

“I think a lot of people miss that bit out,” he says. “They’ll say OK, we’ll give you 10% off, and the client will say: ‘That’s not enough,’ and then the salesman will offer more. We call that ‘ringing the dishcloth’. When do you stop doing it? When the drops stop coming out.”

Once they have told you what they are willing to pay, you have two positions and there is scope for negotiation.

Everyone’s a winner

If you’re going to have an ongoing relationship with the other party, negotiation needs to be win-win. “Negotiation should always be about understanding how we are solving people’s problems, and what pain we are taking away,” says Jacobs.

Once more, with feeling

Whether it’s an employee asking for more holiday or you’re agreeing the price for a product, emotions are usually involved in negotiations. According to Dougall, talks often fail due to communication problems, even when an agreement isn’t far away. So, you can go a stage further than simply finding out about who you’re negotiating with – and a step closer to success – by carefully assessing how sensitive the subject is and the level of emotion involved, and taking this into account.

Objection handling

There is always a reason why someone is saying no. Mark Jacobs, MD of The Mdina Partnership, says that if you find out what this is, everyone can be a winner.

“We were recommended to a company by the wife of another client who had attended a Mdina course.

“I explained about our seven-stage sales approach. They subsequently thanked me for the proposal (15 days’ training) and asked me to leave it with them. When I followed up it was clear that they were not keen to book the training. We found out that the real objection was that it was too expensive for their budget.

“What many companies would now do is see if they could meet that pricing. I remained at our normal price by organising part of the training in one financial year and the rest in the next.

“The course ran consecutively as we straddled the two years. The delegates didn’t notice because we separate our development days by three to four weeks to allow them to practice the techniques. Everyone won, which is the general aim of

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How to start a bed and breakfast business

Thinking about running a B&B or earning money on Airbnb or renting out a room? Here's our Startups guide to help you make your bed then lie in it...
Written by lucy.nixon
Updated on 7 July 2025

Before the pandemic hit, domestic tourism contributed £237bn to the UK economy in 2019, according to Statista. And, although this figure was halved by the impact of the pandemic – with inbound visitor numbers just 18% of their 2019 levels by Q1 2021 – Visit Britain has predicted that domestic tourism spending will be up 51% on 2020 by the end of this year (2021).

Bed and breakfasts are ideally placed to capitalise on this domestic tourism footfall, and the industry is currently in excellent health. While many budget-conscious travellers have turned to platforms such as Airbnb, these systems have “yet to directly influence industry performance”, according to Statista.

If you like the idea of really being at home with your business, then running a B&B could be perfect for you. From a guest’s perspective, a well-run B&B can be more comfortable and more local than a hotel, offering a home-from-home, and a welcome respite for weary travellers.

In this guide, we’ll tell you all you need to know about starting a business and launching your own bed and breakfast, including regulations, taxes and potential profits.

💡Key takeaways

  • A B&B (bed and breakfast) is a small lodging, often in a private home, where guests stay overnight and are served breakfast in the morning.
  • A successful B&B is built on a special and memorable guest experience.
  • Starting a B&B can be expensive, so you should budget for everything from renovations and furnishings to licenses and marketing.
  • Along with food safety and fire checks, check if there are any permits or licenses required by your local authority.
  • Essential amenities include en-suite bathrooms, fast Wi-Fi, and quality bedding.

In this article, we’ll cover:

What skills are required to start a B&B?

A B&B is different from a hotel in that it’s generally more basic. You will offer a bed for your guests to sleep in, and a full breakfast before they check out. No gyms, no health spas and no concierge service. Of course you may provide some other basic facilities such as access to television but the main ethos behind the traditional B&B is that it’s not the kind of accommodation you expect the guests to spend much time in. It’s somewhere to sleep and have breakfast before setting off for a business meeting or exploration of the local tourist attractions. Most guests are aware of this, and are quite content with a more basic level of service as long as their accommodation is clean, tidy and functional.

Given that you are effectively opening your home to strangers, you are blurring the edges between your business and your home life so you need to be confident and happy with the arrangement. To a certain extent, it’s a creative profession: you have to enjoy cooking and making your accommodation as pleasant and welcoming as possible. It’s also something of a lifestyle business, a job that many people will undertake with their partners or perhaps later in life.

To run a successful B&B you have to be a real ‘people person,’ especially if your guests are sharing some of your own space, such as the lounge or dining room.

David Weston, chief executive of the Bed and Breakfast Association says: “You’ve got to consider if you’re the right type of person to run a B&B because you’re allowing strangers to come into your home. You also need to be someone who pays attention to detail, is house proud and keeps the place welcoming. If you’re not very neat and tidy it’s probably not a good business to get in to.”

However, if you do have the characteristics listed above you could find it’s the perfect way to make a living or supplement your income. Christine Williams, owner of the Drifters Lodge in Buckinghamshire and a recent BusinessLink advisor, says:

“I’m rushed off my feet and working harder than I ever did in my life, but it’s a wonderful way to make a living. While I’m not the mistress of my own time in the way I thought I’d be, I don’t mind because I love it.”

Rules and regulations for a B&B business

You don’t need a specific licence or qualification to open or run a B&B, but there are areas of law you need to be aware of. It’s important to bear in mind fire regulations from the outset, as you will need to carry out a Fire Risk Assessment and may have to make some adjustments to the property as a result.

Before you put any concrete plans in place, it’s best to consult with your local authority planning office. If your prospective B&B is situated in a tourist hotbed, it’s highly likely the local authority will have a tourism plan, and they may take a dim view if you attempt to start your hotel outside the designated tourist area; it’s prudent to check this at the outset, rather than waste thousands of pounds on a project which the local authority will never permit.

Furthermore, all extensions or significant alterations to your property need to be done by the book, so make sure you have the appropriate planning permission from the local authority and adhere to building regulations before you start any work. Thankfully, you can apply for planning approval and building approval at the same time, so there’s no need to go back and forth.

You may also need to apply to your local planning office for a change of use of your property if you’re planning to have more than three guest rooms, or don’t plan to live at the B&B yourself. This can take several weeks to be processed, so it’s important you make sure it’s one of your top priorities if it applies to your business.

As running a B&B involves serving food, you will need to follow rules on food safety. It’s worth getting the environmental health officer round to inspect your kitchen very early on in the planning process, as you may find you need to make some alterations which could affect your budget. David Weston recommends doing a food hygiene course, which can be completed within a day or two. You can also obtain most of the information you need from the Food Standards Agency.

Depending on what kind of B&B you plan to run, there may also be some licences you need to apply for in order to provide certain services such as serving alcohol, playing music or providing a television in 15 or more rooms used by paying guests.

The big one you need to remember is registering with HMRC for tax purposes. You can run the business as a sole trader, which means you wouldn’t have to register as a limited company or open a separate business account. However, you must register as self-employed within 100 days of starting to trade, and you will need to keep meticulous records of all business-related income and outgoings.

Running a home-based business also requires a range of insurance covers, including public liability. Explore the policies you may need in our ‘Insuring your business’ channel.

Researching your market

You may be planning on giving up your existing career, moving to a picturesque location and starting your B&B. If this is the case, you’ll have a choice when it comes to location. You can research the tourism trade in that industry and find out what leisure and business travel demand is like.

However, it may be the case that you simply want to rent out a few rooms in your existing home. Even so, it’s still just as important to consider all the factors mentioned above. Except instead of helping you decide where to locate your B&B, this research will tell you if there is even a demand for such a service where your home is. If there isn’t, you have to face facts, you’ll either need to move somewhere where this type of business is sustainable, or give up the dream.

“Just because you fall in love with a location, it doesn’t mean there’s demand there,” warns David Weston of the Bed and Breakfast Association. “If it’s extremely rural or remote, you need to be careful. If you go somewhere with lots of B&Bs like Bath or Bournemouth, you could argue there’s tonnes of competition, but that also means there’s huge demand. It’s about getting the balance right.”

Weston says it’s also important to evaluate what kind of amenities are within range and warns against locating your B&B somewhere that doesn’t have a few places to eat within walking distance, as not everyone wants to drive.

Don’t automatically rule out an area just because it’s not popular with tourists, however. Christine Williams,  who runs the Drifters Lodge, says that although her B&B isn’t located in a tourist hotspot, she gets a lot of business during the week from people on business trips, and at the weekends from people visiting nearby family.

Talk to other B&B owners in the area and find out what kind of occupancy levels they have. If others in the area are struggling, warning bells should be going off in your head.

The type of B&B you start should also fit the location. You need to think long and hard from the outset about whether you want your offering to be a luxury retreat, with high-quality décor, facilities and design, or a more basic value proposition. Bear in mind that business travellers will have different requirements, almost certainly demanding internet access and often in need of a desk or quiet place to work within the residence.

Consider too the size of the property you’ll need. Think about this when deciding how much income you need to generate from the number of rooms you let out, but you also have to remember your own space.

Weston advises keeping a living area or lounge that’s just for you and separate from the one the guests use. “People often overlook the fact that other people will be in their home. You need to consider if this is something you’ll be happy with.”

Costs to start a B&B

How much you spend on setting up your bed and breakfast is really dependent on what kind of condition the property is in and how much work you need to do in terms of alterations. Take into account that you will need to install a decent fire alarm system and may have to make changes to your kitchen to conform to basic food hygiene requirements. Christine Williams said she didn’t have to spend too much as she and her husband had already made quite a few alterations, including making all the guest bedrooms en-suite, a few years earlier.

The bathroom issue is an important one. “Expectations are going up all the time,” says David Weston of the Bed and Breakfast Association. “People expect things like en-suite bathrooms even for cheap prices.”

You should also factor in the cost of any new furniture you need to buy. Tired old mattresses just won’t cut it, and while furnishings don’t have to be the latest designer offerings, everything in the guest rooms should be in good condition and maintained to a high standard. Room TVs and other entertainment, as well as tea and coffee-making facilities, also need to be added to the calculations in your business plan. You may want to consider a simple hotel phone system.

The look, feel, and level of service you offer will also determine your marketing strategy, and this is something you need to pay particular attention to even during the research stage. You can be running the most beautiful, quaint and charming B&B in the country, but if nobody knows about it, it’s doomed to failure.

Some kind of web presence is essential, but if all you want is a basic ‘shop window’ site, you don’t need to spend much, if any, cash on it. There are several free or low-cost website options available. For more information on these check out our ‘Website building’ channel. Get some quotations for the cost of advertising in directories or listings magazines too, as these can be really useful methods of driving customers to you.

“I signed up to Visit Britain for an annual fee,” says Williams. “It’s a lot of money, but it’s worth it. They send a ‘mystery shopper’ inspector round once a year and then give you a rating.”

It’s also advisable to meet local pub and restaurant owners, and suggest mutually beneficial deals; you might promise to recommend them, and vice versa, or team up with your fellow hospitality entrepreneurs for discounts and package deals. But if you are going to team up with a nearby boozer or eatery, make sure your prospective partner is reputable; if you give a visitor a bad recommendation, your own reputation will suffer.

Of course, if you’re buying an entirely new property, then your costs are going to be substantially higher. If you’re taking out a mortgage on the premises, you need to be realistic about your potential earnings. Do your sums, cross-reference them with your research on similar businesses in the area, and then do them again! You cannot underestimate the importance of getting your estimated income as accurate as possible; otherwise, you may find you’re not earning enough to pay back your mortgage, let alone make a living from it.

David Weston suggests working out average earnings for various levels of occupancy and seeing what level you need to maintain to cover your costs. “If you can survive on an occupancy rate of 30-40% then that’s very encouraging. However, if your budgeting says you need 80% occupancy just to break even, then it’s worrying and you need to rethink your approach.”

Potential earnings from running a B&B

In terms of exactly what you can earn depends on a number of factors, including location, the amount you can reasonably charge, whether or not you need to employ staff, how much is required for marketing and whether you have significant costs to pay on the property, such as a mortgage. Weston says there is no standard profit margin or rule, as it’s just too dependent on variables.

However, as an example, Williams’ Drifters Lodge has a total of three guest rooms. Taking into account running costs, she says it’s fairly easy to make a profit margin of around 50-60%. “I’ve done about £4,000 in revenue in July, but in December/January it can drop to £1,500. There are B&B owners who’ve given up because they can’t make a living, even with 10 rooms. It has a lot to do with costs like mortgages and rent.” Williams, who does not employ anyone else, says it’s a lot of hard work for that level of income, but it’s worth it because she enjoys it so much.

An average day running a B&B

Christine Williams, who runs the Drifters Lodg, gives an example of an average day running her three-bedroom B&B:

“I get up at 7am and start to prepare breakfast. Once that’s done, I usually have a chat with the guests and then clear the breakfast things up. Next job is to service the bedrooms, and then the laundry and ironing take me up until about 12-1pm.

“I try to take a break in the afternoon and generally get 2-3 hours to myself. Then at about 4pm, I check all the bedrooms before the guests arrive which is usually between 4-7pm. About once a week, I’ll go through my accounts, do a check on stock and go through any emails.

“You must block out time in your diary for yourself. It’s very hard to take a day off, so holidays have to be planned well in advance. This can be a very tiring job, so you need to plan breaks and not move them.

“For anybody who works at home, especially if you work on your own, it can be quite isolating. You can be so busy that time whizzes by and before you even realise it, you haven’t been out of the door for a couple of days, much less had any social interaction. That’s something you need to watch out for because it’s easy to let the time get away from you and forget about your own peace of mind.”

Useful contacts for a B&B business

Bed and Breakfast Association: bandbassociation.org

Visit Britain: visitbritain.co.uk

Tourism Alliance: tourismalliance.com

Food Standards Agency: food.gov.uk

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Can a CIC and Ltd company work together with the same director?

I run a limited company that could fit into the social enterprise bracket. I'm thinking about setting up a separate CIC for the community services side of the business. The CIC may require services that my Ltd can provide, so I want to know if the CIC Regulator would have a problem with using the same director for both.
Written by lucy.nixon
Updated on 7 July 2025

The CIC Regulator writes:

The Regulator of Community Interest Companies would be satisfied with a relationship between a community interest company (CIC) and an ordinary limited company as long as consideration is made to the following points:

  • Where the directors of the CIC and the private limited company are the same individuals, consideration needs to be given to the avoidance of conflict of interest when carrying out their fiduciary duties. In the interests of best practice, the Regulator would welcome at least one director on the board of the CIC that is not a director of the limited company but this is a matter for the company to consider, it is not a requirement.
  • The directors must make sure that the fiscal structures of the limited company and the CIC are kept separate to avoid any breach of the asset lock.
  • The separate identities of the private limited company and the CIC should be clear in all public material and, in dealings with suppliers.  There should be no confusion with the general public with which company they are dealing with.  In stating this, the Regulator would welcome there being no confusion between the names of the companies.
  • The Regulator would also expect any contracts between the limited company and the CIC to be fair, reasonable and competitive ensuring that the assets of the community (which includes profits and surpluses) are used to benefit the community for which it was set up and not for the personal gain of directors.

The key thing is to ensure the CIC’s dealings with the limited company are open, transparent and accountable and the bank accounts and books are completely independent of each other. 

More information on the Office of the Regulator of Community Interest Companies can be found here

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Trading Places awards launched

Scheme rewards entrepreneurs who have overcome immense difficulties
Written by lucy.nixon
Updated on 7 July 2025

Entrepreneurs who have overcome immense difficulties to set up their own businesses are being invited to enter the Barclays Trading Places Awards.

The scheme rewards those who have changed their lives for the better as a direct result of setting up a business.

Previous winners include Nikki and Kevin Sweet who overcame three separate redundancies to set up a cider-making business, and Tracy Mackness who set up a sausage-making venture after completing a prison sentence.

Winners will receive a share of £45,000 worth of prizes. The awards are open to sole traders, partnerships and companies that have been trading for at least three months and under 3 years as of March 30 2009.

The closing date for entries in Friday 22 May, 2009. Anyone interested in entering should visit www.barclays.co.uk/tradingplaces or call 0800 085 3203.

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Do under 18s and 16-year-olds have to pay tax? Rules for teenage staff

We explain UK tax regulations for businesses with teenage staff, including how much tax they need to pay. We also cover the legal age for work and minimum wage.
Teenager working in a grocery shop
Written by lucy.nixon
Updated on 7 July 2025

Find out all you need to know about doing a tax return and how to do it correctly.

Startups need to understand and comply with employment law when considering how to pay employees who are very young.

Employing someone younger than 18 means following rules designed to protect younger workers from working too many hours. The rules for employing people aged under 16 are even stricter.

Business owners need to be aware of the tax rules that apply to staff aged under 18, and comply with them as an employer and on behalf of their employees.

This article will cover whether under 18s and 16s pay tax and the tax liability of workers of these ages, as well as how old you have to be to work in the UK, minimum wage levels for under 18s, what other tax breaks are available to them, and what employers must do when they hire under 18-year-olds.

How old do you have to be to work full or part-time in the UK?

The youngest age an employee can work in the UK is 13, except for children involved in acting, modelling or theatre work. There are restrictions on the type of work and hours a child aged 13 to 16 can work.

“Those aged 16-17 can work full or part-time, while those under 16 have limitations,” said Yiannis Zourmpanos, a chartered accountant and senior contributor at Bountii.

Once they reach school leaving age – defined as reaching 16 by the end of the summer holidays, with minor differences for Scotland, Wales and Northern Ireland – they can work up to 40 hours per week.

What are the minimum wage levels for under 18s?

Children under 16, or school-aged children, do not qualify for the national minimum wage. They do not pay national insurance (NI), and only need to be included on the payroll if they earn above the personal allowance of £12,570.

Employees, including apprentices, aged 16 to 17 must be paid at least £6.40 per hour. If they earn more than £123 a week, employers should add them to their payroll and deduct NI. Self-employed workers aged under 18 are not entitled to the minimum wage.

Aged 18, adult employment rights and rules apply, and minimum wage rates increase. Employees must be aged 21 or above to receive the national living wage.

Do 16-year-olds and under 18s have to pay tax?

Everyone, regardless of age, can earn up to the current annual personal allowance of £12,570 before they pay tax. This includes earnings from all sources.

Under 18s’ income usually comes from employment or self-employment, or interest from savings, trusts, dividends or even capital gains. Each of these sources of income can generate a tax liability.

A capital gains tax (CGT) liability is unlikely, as it’s unusual for a child to own an asset that triggers a CGT liability when sold.

Savings income can be taxable, but it’s unlikely the amount would exceed tax thresholds and be liable for tax on its own, though it could form part of an individual’s total taxable income and mean they need to complete a tax return.

Workers aged 16 to 18 will pay tax and NI if their earned income is above the personal allowance threshold, or if they are self-employed and their taxable profits are above £12,570 a year.

Children aged under 16 can still be liable for tax from earned income above £12,570, but they do not pay NI.

How much tax can they pay?

16 to 18-year-olds can and do work full-time, particularly as part of family-run businesses or as tradespeople. However, in practice, under 18s will not usually earn enough to pay tax.

In reality, most in this age group will work part-time whilst studying for a professional qualification, and not earn enough to pay tax.

If they do earn over £12,570 per tax year, under 18s are liable to pay income tax at 20% on income above this figure. In the unlikely event that they earn more than £50,270 in a tax year, they would pay income tax at the higher rate of 40% on the amount earned above this threshold. Workers aged over 16 must also pay NI.

As we’ve said, under 18s and 16s can also be liable for tax on savings income. In addition to the personal allowance of £12,570, every basic rate tax payer – including under 18s – also receives a personal savings allowance of up to £1,000 of tax-free savings interest.

Those who earn less than £17,570 per year also receive the starting rate for savings, which allows them to receive up to £5,000 of interest on their savings before tax is due on that interest.

For each £1 earned or received above the £12,570 personal allowance threshold, the savings starting rate falls by £1.

These additional tax-free allowances mean a child can receive income of up to £18,570 a year without paying tax, with £6,000 of this coming from savings interest and £12,570 coming from another source, such as employment.

Examples of the tax under 18s might pay

These examples illustrate how under 18s can be liable for tax, and how to maximise their tax-free allowances:

A 16-year-old earns £8,000 in 2024-25 by working part-time and full-time over the summer.

The income is below the personal allowance threshold of £12,570, and they are eligible for the personal savings allowance of £1,000 and the savings starter rate of £5,000. This means they can potentially earn up to £10,570 (£6,000 in interest plus £4,570, the balance remaining on their personal allowance) with no tax payable.

An 18-year-old works full-time and earns £16,000 each year. This is above the personal allowance, so NI and 20% income tax is payable, but because earnings are less than £5,000 over the personal allowance, the taxpayer still qualifies for some of the savings starter rate.

Their salary is £3,430 above the threshold, so £1,570 (£5,000 minus £3,430) of savings interest is not taxable. This person also qualifies for the personal savings allowance of £1,000, so they can earn up to £2,570 in savings interest before paying tax.

Do under 18s get any tax breaks?

Besides the personal allowance everyone gets, there are no tax breaks for under 18s that employers need to take into consideration.

As for tax breaks outside of employment, under 18s do receive the savings personal allowance and the savings starting rate if they earn less than £12,570.

Under 18s also don’t pay tax on interest earned from tax-free child savings accounts, such as Junior ISAs or child trust funds. Like adults, children also qualify for capital gains tax allowances. These are today set at £3,000 or £1,500 for trusts.

Although it’s unlikely anyone aged below 18 will own their own property, under 18s are also disregarded from council tax calculations.

What steps should a startup take when they employ someone under 18?

Startups must adhere to employment law when employing full-time or part-time under 18s.

“While employing under 18s can seem like an untapped opportunity for enterprising young startups, there are a number of unique challenges that many may not fully anticipate,” said Zourmpanos.

For under 18s, the key stipulation is that they must stay in education or training until they reach 18, unless they:

  • Are in an apprenticeship, traineeship, or supported internship
  • Or work for 20 hours or more per week, combined with part-time education or training
  • Or volunteer for 20 hours or more per week, combined with part-time education or training

Workers aged between 16 and 18 cannot work for more than eight hours a day or 40 hours a week, and usually not before 6am or after 10pm. They must receive a break of 30 minutes when working longer than 4.5 hours, and 12 hours’ rest in any 24-hour working period. Startups should consider using accounting software to ensure they follow the rules.

If you employ 16-year-olds, they can work full-time when they leave school, legally classed as the last Friday in June of the year they turn 16. However, as we’ve explained, under 18s must also be in education or training until they reach 18. If someone starts a full-time job at 16, they still need to complete at least 280 guided learning hours a year in education or training.

Child employment rules for staff aged under 16 or school leaving age are stricter than those for 16 to 18-year-olds. Children between 13 and 16 can only take on part-time work that’s classed as ‘light’, and does not risk health and safety or affect their education.

There are other restrictions on the type of work children can do, including in factories, on industrial sites, during school hours, and before 7am or after 7pm.

Conclusion

Businesses can benefit from employing under 18s. They provide flexible staffing options, particularly during school holidays, and can undertake certain roles and train to become valuable future team members.

“The young workers I’ve supported are best served knowing basics like their zero-tax thresholds, recordkeeping, and asking employers to explain policies up front,” said Zourmpanos.

There are strict rules for hiring workers under 18, particularly for school-age workers aged 13 to 16. Startups need to comply with the law on working hours, conditions and pay.

Employers don’t have to worry about tax and NI for most workers aged below 16 as they’re unlikely to work enough hours to earn more than £12,570. Of course, if they do work enough hours, there can be tax implications. Employees aged 16 to 18 can work full-time and are also liable to pay NI, unlike under 16s.

Under 18s need to understand how income from other sources can create tax liabilities if it takes them above their personal allowance, which can include extra savings income allowances.

Benjamin Salisbury - business journalist

Benjamin Salisbury is an experienced writer, editor and journalist who has worked for national newspapers, leading consumer websites like This Is Money and MoneySavingExpert.com, business analysts including Environment Analyst, AIM Group and written articles for professional bodies and financial companies. He covers news, personal finance, business, startups and property.

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What are the legal issues regarding social enterprise?

Statups looks at the legal forms that social enterprises can take and what to consider before choosing one...
Written by lucy.nixon
Updated on 7 July 2025

Setting up a charity can change lives but it will take plenty of time and resources to get started. Find out more in our guide to starting a charity.

Social enterprise is more of a political definition than a legal one. But for your own peace of mind and in the long-term interest of your organisation, it’s worth looking at the legalities surrounding the sector before starting up your business.

The general definition for social enterprise is a company which reinvests its profits for a social purpose as opposed to redistributing them. And for all the legal weight behind the term, the law sees it no differently. As far as the tax man is concerned, a standard social enterprise is not much more than an ordinary commercial business.

The government’s definition has it that a social enterprise is an organisation ‘with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or community, rather than being driven by the need to maximise profit for shareholders and owners’. There is no legal definition.

But while social enterprise is not defined by any legal status, you can still adopt legal forms to protect both yourself and the social purpose of your business.

There’s a whole range of legal forms that you can adopt; which one you take up really depends on what it is you want from your social enterprise.

Popular forms include:

All of these forms can be seen as making up a spectrum, going from the most similar to a commercial company to a traditional, donations-dependent charity – but it doesn’t quite work like that.

Abbie Rumbold of Bates Wells & Braithwaite, a firm which specialises in charity and social enterprise, explains: “A company limited by shares is probably the most closely linked to the commercial and a registered charity is at the other end. Something like a community interest company (CIC) kind of sits in the middle.”

However, it is not as straightforward as it sounds: “Actually, you can push it. You can make a community interest company – which has to re-invest some of its profit, but not all of it – distribute a proportion of its profits to its shareholders. So you might say that is more towards the commercial end.

“But then, you might say your community interest company is structured so that none of the profit is redistributed, that everything is for the community benefit.”

For the most part, legal form enables what you want to do with your company, rather than hinders. Once you know what you want to accomplish with your social enterprise, and how you will carry it out, choosing which form to take should be easy: with the variety of legal forms available, you should be able to find one that complements the requirements of your organisation quite easily.

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How to start a plumbing business

Want to know how to become a plumber? Read our guide for a direct pipeline to plumbing success
Written by lucy.nixon
Updated on 7 July 2025

Before starting a business in plumbing, here are a few important steps to consider:


What is it and who is becoming a plumber suited to?
The plumbing industry has become somewhat of a sexy career option over the last decade. Fuelled by press coverage of demand for plumbers outstripping supply, and countless case studies of the ‘city-professional turned tradesman’, the industry has taken on a new lease of life. Far from the image of a guy in overalls with his head under a kitchen sink, the industry is an incredibly varied one.

Specialist areas range from emergency repairs and bathroom installations and to fitting energy efficient and alternative fuel sources.

There are approximately 120,000 registered plumbing and heating engineers in the UK, and while the market may lean more towards emergency call-out work than extravagant water installations during times of economic crises, the fact remains that people will always need plumbers. So if you’ve got a solid proposition, a strong work ethic and don’t mind getting your hands dirty there’s no reason you can’t make a success of a plumbing business even in the midst of a recession.

Well ideally this is a business suited to plumbers, and if you’re not one already you’re facing an uphill struggle to set up in the industry. This is not the kind of business anyone can run. You need plumbing experience, or if you don’t have it yourself, you need to involve a partner or key member of staff that does. William Davies set up Aspect Maintenance after working for an investment bank for several years. He didn’t have plumbing experience himself so he brought on board Nick Bizley, who’d spent all his working life in the industry, as his partner. So while it’s not essential to have gone down the typical apprenticeship route you do need to be aware of your own limitations and surround yourself with staff that can compensate for the skills you don’t have.

Blane Judd, chief executive of the Chartered Institute for Plumbing and Heating Engineers (CIPHE) advises that it’s best to work for an established plumbing business for at least 2-3 years after qualifying before you set up your own venture.

In terms of the type of people that choose a career in plumbing, there’s been quite a shift in the last decade. University graduates and women seem to be the case study of choice for journalists focusing on the new-found appeal of the industry. While background, gender or educational history doesn’t seem to be of relevance anymore there are a few personality traits you’ll need to make a success of this kind of business.

For a start you’ll need to be someone that copes well in stressful situations. You’ll need to be happy to get your hands, and clothes, thoroughly mucky and be keen to do a lot of hard physical labour. You’ll also need to be good with people. The job will involve direct face-to-face contact with your customers so a sunny disposition is a must if you want them to call you back next time they need a plumber.

Charlie Mullins, founder of Pimlico Plumbers, says the industry is far more computerised today than it was when he set up his firm 30 years ago. “It’s a more in depth and harder job now. Years ago people that weren’t very academic went into the industry but it’s not like that anymore.”

On top of all the industry specific skills and qualities you’ll need, there’s also the general business acumen required to make a success of any commercial venture. You may be able to fit a boiler but if you can’t balance the books or manage your staff, your venture won’t make it off the starting blocks.

A plumbing business model

Before you start making decisions on the colour scheme of your van or what your company logo will look like you need to establish what kind of plumbing business you want to run. As mentioned above, it’s an extremely varied industry and there’s scope for specialising in a number of areas.

Your chosen business model must reflect the demand for services in the area you intend to operate in. Look at the competition in the area and see what other plumbers are doing. Is your local market flooded with emergency call-out businesses? If so, perhaps you need to diversify your offering and specialise in fittings and alternations, or the installation of green energy technologies.

The introduction of newer energy sources such as solar thermal and air or ground source heat pumps have provided a whole new area for plumbers to make their mark in. Blane Judd of the CIPHE believes the ‘plumber of tomorrow’ will need to have a working knowledge of these kind of fossil fuel alternatives.

Be warned though. In times of recession you’ll find the most stable market is in repairs and call-outs. If people are finding it harder to take out loans they may not be able to access the cash needed for higher priced jobs. Likewise, a brand new bathroom may seem a bit extravagant in times of recession. Burst pipes and repairs will always need attending to though – recession or not.

When William Davies started Aspect Maintenance he made good use of his business partner’s industry knowledge. “I wouldn’t have got into this if Nick hadn’t been involved in the sector for some time. He was able to discuss the driving forces behind the industry with me, so we came to the table with a lot of knowledge which allowed us to put together a solid business plan.”

Davies and Bizley made a conscious decision to focus on both the commercial and domestic markets but this is a decision you should consider carefully. If you’re offering your services to businesses as well as domestic customers think about how this will affect the minimum staff and resources you require.

Consider too whether you can reasonably make enough money if operating on your own. This may be a safer way to keep your overheads down but will it give you the rate of growth you’re after?

“Most plumbing firms are set up by individuals qualified in the industry who gradually take on a couple of other plumbers,” says Davies. “I came from a business background and looked at the venture from the point of view of structuring a decent sized venture. I wanted the tradesman to be left to do their jobs but have a great admin back-end which would make the whole process run smoothly.”

Rules and regulations of the plumbing industry

At present you do not need a licence to operate as a general plumber but there are some important exceptions to take note of. If you are dealing with any kind of gas appliance, which includes boilers, cookers or gas heaters, then you must be on the Gas Safe Register (known as CORGI until April 2009). It is illegal to carry out any work involving gas appliances without the appropriate training and certification.

You also need to have thorough working knowledge of the Water Regulations and Building Regulations in the UK. And while you don’t need a licence to fix a leaky tap or install a toilet, any plumber worth their salt will have been properly trained with appropriate qualifications under their belt.

The CIPHE does not recognise anyone as a member unless they are qualified to at least NVQ Level 2 standard. The NVQ qualification is a mixture of practical and theory work and most colleges require at least a grade C in Maths and Science GCSE’s to enrol you. A level 3 NVQ qualification will cover the profession to a higher standard and is the recommended level to reach before thinking about starting your own venture.

However, it’s important to make sure your training provider is a reputable one, and that the qualification they’re offering is recognised by the industry. “There are a whole series of people out there offering short courses that purport to turn you into a plumber in a very short period of time, but the industry doesn’t collectively recognise that as qualifying,” warns Blane Judd of the CIPHE. Judd also recommends taking courses in water fitting regulations from reputable training suppliers such as BPEC.

For work involving solid fuel and oil appliances you should seek accreditation from HETAS and OFTEC. It’s also important you receive appropriate training for any work carried out on newer ‘green’ technologies such as solar thermal and air or ground source heat pumps. Training for these kind of installations can often be obtained through the manufacturers of the technology themselves.

You must make sure you have the appropriate public and product liability insurance to protect you against any claims that may arise from damage or injury during the course of a job. If you employ any other staff you’ll need employers’ liability insurance too.

Another important regulation to remember is that you must be VAT registered if your turnover is over the threshold. Check here to see if you’re likely to need to register.

You should also be aware of HMRC’s Construction Industry Scheme (CIS) which governs the handling of payments for anyone working in the construction industry. For more information on how this could affect your plumbing business click here

Gaining experience as a plumber

The traditional route once you’ve gained your industry recognised qualifications is to work as an apprentice with another plumber or maintenance company. It’s a route that Pimlico Plumbers’ Charlie Mullins took when he left school at the age of 15, and one that he still highly recommends today. “My apprenticeship lasted four years and by the time I’d finished it I’d already built up a small client base and was able to become self-employed straight away.”

The college where you do your industry qualifications can often help you find a placement with a local company, but there’s nothing stopping you getting in touch with other plumbing company’s yourself. It’s unlikely you’ll earn much during your apprenticeship but the experience you’ll gain working with fully qualified and seasoned plumbers will prove invaluable when you start your own venture.

Blane Judd of the CIPHE recommends at least 2-3 years working with an experienced plumber before you attempt your own venture. In fact, those wishing to join the organisation, even at the lowest level, need evidence of this length of service after completing their qualifications.

Judd explains: “It’s like when you pass your driving test, and the examiner hands you your certificate and says: ‘now’s when you really learn to drive’.”

The main idea to get your head around is that customers won’t accept trial and error when you’re working on their property. Your time at college won’t prepare you for all the situations you’re likely to encounter while actually on the job. And while even the most experienced of plumbers will sometimes find themselves in unfamiliar and pressured circumstances, learning the ropes while there’s someone else to guide you is always going to be preferable to throwing yourself in at the deep end straight away.

Building a reputation for your plumbing business

There’s no getting away from the fact that plumbers have a bad name. Stereotypes of messy, unpunctual tradesmen who turn up late and leave the job half done are common and it’s a reputation you’ll have to work hard to distance your own venture from. However, it is possible to build a solid and reliable reputation.

“Our growth was built on quality of service and if you drop that, you’ve got nothing,” says Charlie Mullins of Pimlico Plumbers. “It takes a long time to build up a name but you can lose it overnight.”

Mullins issues all his staff a Pimlico Bible which lays out everything from how they must present themselves to how clean their van should be and what time they turn up for a job. If staff can’t abide by the book, they don’t last long at Pimlico.

Complaints are also dealt with swiftly with the same engineer almost always sent back to rectify the problem. Mullins believes if you handle a complaint correctly it can often turn into further work. “We want to be seen as the John Lewis of the plumbing industry where if you’re not satisfied you get your money back. Retaining customers is more important than getting new ones.”

William Davies of Aspect Maintenance also decided his business would need to focus heavily on customer service from the outset. “We saw that it was an underserviced marketplace and if you ask anyone they’ll tell you they’ve had problems with maintenance companies at some stage.”

Offering great customer service can also save you a huge amount on your marketing spend. Word of mouth is will give you far better return on investment than a full page ad in a business directory.

Davies says he didn’t do much in the way of advertising when he started Aspect Maintenance but instead relied on the client base his partner Nick was already familiar with. It was only once the company was more established that he started spending cash on branding and advertising to the general public.

Mullins says the Pimlico vans with their prominent logos and personalised number plates are the biggest advertising tool the company has by far. “We have 120 on the road. They’re very recognisable and seen all over London.”

Another pull for many customers looking for a plumber is the knowledge that the person they’re hiring belongs to reputable trade organisation. Being a member of the CIPHE can add credibility to your business. The process involves having your qualifications and experience checked by the organisation, and sticking to a set of working standards which are enforced by a committee. Plumbers that are found to be lacking in these standards are removed from the register.

Costs and budgeting as a plumber

Starting a plumbing business needn’t involve large amounts of upfront cash being spent. If you’ve done an apprenticeship you may have already built up a useful collection of tools, and most plumbers you hire will come with their own equipment too. One thing you won’t be able to scrimp on however is a vehicle. You’ll need a reliable mode of transportation to get to your jobs and while second-hand makes business sense you’ll need to spend enough to ensure it’s not breaking down every other day.

The average self-employed plumber earns £30-40,000 a year. That’s not to say the rumours about plumbers clearing an annual £70,000 are completely false, but you’d probably have to be working 12-hour days, six days a week to manage it. You’ve got to remember that from your earnings you need to deduct all your business running costs such as petrol, vehicle maintenance, advertising etc.

During the early stage of your business think carefully about the type of jobs you take on. Long-term projects such as bathroom fittings which take weeks of work may give you a nice lump some of cash but if you’re not being paid until the job is finished how will that affect cashflow? Emergency call-out jobs, where you invoice and receive payment on the spot, can be a much steadier form of income during the early days.

“It’s easier from a funding perspective to focus on emergency work,” says William Davies of Aspect Maintenance. “It has better margins and you get paid straight away. But even though larger jobs have lower margins they offer more long-term security, so there’s attractions to both types of work.”

Setting your prices should involve a degree of research of your competitors’ pricing but it’s not a good idea to base your pricing model on undercutting everyone else. “If you’re a small operation that trades in a small area then the main thing is to keep your service levels up,” says Davies. “In this sector price is quite inelastic – whether you charge £60 or £80 for a call out isn’t what makes the difference. Pricing your service as cheaply as possible won’t have as much benefit as making sure the service quality is consistently good.”

Consistent service is also what will you see you through difficult economic climates according to Charlie Mullins of Pimlico Plumbers. “You’ve got to raise your game to stay ahead of the game,” he says. “Get your response times up and improve your customer service and you’ll get through the recession.”

Useful contacts for your business

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10 most sustainable sectors to start a business

Sustainable business isn't just about green and socially responsible enterprises. Find out which business types will survive downturns...
Written by lucy.nixon
Updated on 7 July 2025

Sustainable business: it’s a fashionable phrase, a buzz word. But when you hear it, you think ethical. Right?

Well, sustainable business isn’t just about green and socially responsible enterprises. At base level, sustainable business is all about longevity: it’s about the long term maintenance of a healthy profit.

In these tough economic times, businesses are tested to their limits. Consumers are risk averse: they only want to deal with firms they know and trust. The upside of this is, people will do business with companies if they believe they’re going to stick around for a while.

Assuming you want to be one of those businesses, you’d best get to know what makes an enterprise ready for the long haul. Just what kind of business is sustainable?

On a case-by-case basis, of course, you can consider a business’ fundamentals: its financial statements and health, its management and competitive advantages, and its competitors and markets. But to speak generally, there are some sectors that are more likely to produce the kind of solid, sustainable business that will see out – or even benefit from – the downturn.

These are some of the most sustainable business ideas:

  1. Online retail

    High street sales are plummeting and consumers are disappearing: but online sales creep up and up.

    How is it possible? Well, web-based enterprise has all the qualities of a sustainable business: low set up costs, low running costs and the potential to garner a broad client base. If done well, it’s virtually immune to economic change.

    With no high street overheads to speak of, no geographical or time restrictions and no need to display stock, online retailers are not only the shopkeepers of the future, they’re also the ones cleaning up right now.

    So whether you’re thinking of selling a niche service online, plan to go live with an online information product, or aim to trade as a web-based retailer, don’t let the downturn hold you back. Because if you’re online, it won’t.

  2. Funeral parlour

    Setting up a funeral home might sound a bit grim, but hear us out.

    Human needs remain the same no matter how the economy fares: food and shelter are everyday necessities. Illness can strike at any time. And one day, ultimately, the clogs are going to pop. It follows: businesses like funeral parlours do well no matter what the GDP.

    From a demand perspective, accommodation providers, healthcare and food suppliers have the sustainability hallmark too. Even so, you have to watch out for changes in the market.

    It’s worth noting that restaurants do badly in lean times, for instance. And then, the recent collapse in prices means that investment property is probably not the best way to go… But buying to let is a profitable alternative route. And supermarkets and convenience stores are a short but lucrative step away from catering.

    Healthcare supply and funeral care are constants though. Business-wise, pine boxes – and pill boxes – are a safe bet.

  3. Pound shop

    The closest thing to ‘free’ is a 99p sticker.

    It’s recession time, and customers are cutting back on expenditure. High street units are emptying across the country. If you want to set up shop and you’re keen to avoid risky ventures, you can’t go wrong opening a store full of bargains.

    Toys, toilet roll and tat: these outlets aren’t classy. But they’re reliable in their offerings and are a one-stop-shop for children’s parties, Christmas lights, cheap chocolates and candles. And your stock is as cheap to buy as it is to sell.

    Just make sure plastic flowers and ‘Made In China’ signs are to the taste of the high street in question.

  4. Luxury goods

    It may be counterintuitive, but the upper end of the market is generally immune to financial flu.

    High-end products, from luxury holidays and designer handbags to artisan ice-creams, are defying the consumer spending slump. Back in the downturn of the nineties, Haagen Dazs did a booming trade; your business could be the surprise luxe success of this recession.

    The logic goes like this: even if skint, the modern-day consumer is accustomed to the odd treat. But instead of buying ten middling things, as was their wont in the good times, consumers are more likely to go for quality than quantity now. They’ll go for one good item — even if it’s a bar scented soap or fancy chocolate.

    There’s still money being spent out there: you’ve just got to create the right net to catch it.

  5. Domestic tourism

    With the pound down against the euro and the dollar, and job-security at an all-time low, it’s likely holidaying abroad will be a low priority for Britons this year.

    But families still want to keep their commitment to their annual holiday. As a result, those camping holidays in Cornwall and those breaks in north Wales might well be back in vogue.

    Whether you have plans for a budget B&B or your eye on a seaside hotel or campsite, now’s the time to get listed in holiday guide books. Similarly, bus tour operators, historical guides, hiking and adventure organisers – and those running local culture and music fairs – should plan for a busy summer.

    These are gloomy times, but the sun may yet shine on businesses offering a traditional British holiday.

  6. Maintenance/repairs/cobbling

    If consumers are not buying anything new, older items – from clothes and shoes to cars and home fittings – will still need to be repaired eventually.

    There are happy side-effects to a conservative economic climate: cobbling, home, car and general repair firms look set to benefit from a resurgence in popularity. Sustainable living – in the green sense – works well for these businesses.

    So if you are a skilled tradesman or mechanic, or if you have a passion for professional-standard DIY, now could be the time to turn your hand to setting up on your own.

  7. Green and ethical business

    Now that fewer people can afford to buy organic, green business has lost some of its cachet. But this is a sector that fits with the frugal mood.

    Ethical retailers, offering fair trade, locally sourced or organic produce, tend to have a loyal customer base that looks for more than the cheapest price. And green still has promise: sustainability is, after all, its motto.

    Demand for green goods remains high, and the rising cost of energy and other resources means that eco-friendly business makes good business sense. Investment in green goods, such as energy-saving light bulbs or solar panelling, saves the consumer money in the long run.

    So don’t let the pile-em-high, sell-em-cheap brigade get you down: your start-up eco business may soon have competitors green with envy.

  8. Consultancy

    If you have specialist knowledge, there are people out there who are willing to pay for it. This is a business with sustainability written all over it.

    Whether you’re thinking of becoming an IT consultant or manning a business consultancy, your job will be to act as guide to your clients. You fix problems, both minor and large scale. As you can imagine, during a downturn there’ll be lots of demand.

    But if you’re good, you have a guaranteed client base, downturn or none.

    The great thing about becoming a consultant is the low entry cost: it needn’t involve an outlay of precious savings or expensive borrowings, which makes the risk much more manageable.

    If you have the knowledge, the motivation and the interpersonal skills, why not break out of the box and set up on your own?

  9. Money lending

    An unpopular one, this. After all, bad debt is what got us into trouble in the first place.

    But if you have money, you can make money: and the rates of interest on small sums lent, and hence the return you can expect, are generally high.

    Low set-up costs and minimal running costs make this business relatively stable and sustainable. Especially if your enterprise is based online.

    High street banks take up the greater portion of the money lending market, but there are opportunities for smaller businesses offering on-the-spot cheque cashing and payday loans, as well as home credit and sums as small as £100.

    But beware: operating without a credit licence makes you a loan shark. Sharks are deservedly unpopular, bringing disrepute to legitimate lenders by targeting vulnerable borrowers.

    If you go down the money lending route, just make sure you operate within the law.

  10. Debt collection

    And you thought money lending was unsavoury. But, with the fervent hope that collectors aren’t all bad, we offer you debt collection as a prime example of sustainable business.

    These are tough times, and as customer debt grows, the demand for non-court action debt collection increases.

    Debt collectors chase so-called ‘delinquent debts’, through snail mail, telephone and email, for businesses. The older the debt, the higher the commission you can collect: rates run as high as 60%.

    Minimal overheads and low start-up costs are in debt collection’s favour. Many debt agencies operate from a home base, and if you network well, and establish good word-of-mouth, you can quickly build up a client base.

    But remember, Shylock is a fictional character: if you’re doing it right, you will not need to go ‘heavy’.

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How to get past the buyers and get your product stocked

Winning over the high-street gatekeepers can be an arduous task. Here's our guide to getting listed
Written by lucy.nixon
Updated on 7 July 2025

Seeing their products on view in the multiples is the dream of many entrepreneurs. A space on the shelves of the country’s leading retailers is one of the most public and esteemed endorsements your product can get. And with the right approach you could see your sales, and profits, soar.

But getting there can be a hard slog, and even if you’re offered a deal, there are many factors to consider to ensure it’s commercially viable. We asked the buyers to tell us what they look for in a supplier, and spoke to the entrepreneurs who’ve made it onto their shelves about how to get there and then make it work.

Before you even think about approaching a retailer, you need to do your homework. Buyers agreed that a surprising number of businesses fall down due to a lack of research. “You need a compelling sales case,” says Mark Langley, sales director at sports nutrition brand Maximuscle, which sells in Argos, Tesco, Boots and many more. “You need to understand how they work as a retailer, what makes them tick and how your proposition would appeal to them and their customers.”

Retail buyers only have a finite amount of shelf space, so tell them why your product fits with their brand, offers something new and will help their business grow, as well as yours. Knowing who you’re dealing with is crucial. The Firebox brand, for example, is synonymous with breaking new products. You go there to find gifts you won’t see on the mass market. “If suppliers approach us with something that’s being sold on the High Street, it’s less likely to be something we’re going to get excited about,” says Firebox managing director Christian Robinson.

Research will tell you if a retailer’s brand depends on an element of exclusivity, but often this can work to your advantage, too. “Because of our reputation, people look at Firebox to see the next big thing. Our suppliers then get calls from some of the very big retailers,” says Robinson. He adds that their PR effort focuses on their products. The greater exclusivity they get, the louder they shout about it and the more demand and buzz is generated.

Finally, every product category has its own quality and safety standards at UK and European Union levels, and retailers won’t touch products that don’t comply. Check the websites of official government bodies for your category, such as the Food Standards Agency (FSA), and be prepared to produce the relevant paperwork.

The approach

“You’ve got to figure out who your buyer is, what category your product is in, explain why they should take something off their shelves to put yours in its place, and say why yours will sell better,” advises Paul Lindley, founder of healthy kids food brand Ella’s Kitchen.

Of course, there is no blueprint for getting listed, but you can help your case. Retail buyers will be inundated with offers, so make yours stand out. Sending samples can help. “Everyone has an inbox full of stuff, and it’s too easy to email,” says Shed Simove, a designer of novelty products sold in retailers such as Joy and Urban Outfitters. “Send a prototype or a visualisation in the post with a box of chocolates.” Robinson agrees, adding: “An email is less likely to elicit enthusiasm from us than actually sending the product itself.”

Persistence also pays. “I really had to chase and work out whether I’d approached the right person,” recalls Lindley, who sent an introductory letter and presentation followed by endless phone calls and emails.

If you’re targeting the supermarkets, timing can be everything. Find out when they do category reviews, which occur once or twice a year, explains Lindley: “You only have certain opportunities to get launched, which is when retailers rebuild their area, working out what new products to introduce, what they can move and how the shelf will fit back together.”

Trade fairs are a great way of meeting retail buyers face-to-face. Rather than shelling out for a stand, Simove contacts exhibitors from the previous year, and asks them to sell his product for a slice of the money, leaving him free to wander round and make contacts. “There’s always a way to do it cheaply,” he says.

The meeting

Before you can close a deal, buyers will want reassurance that you can meet the volume requirements, delivery timetables and manage your supply chain effectively. Turning around two weeks into your trial when you’re late with a delivery and protesting that the van broke down isn’t good enough. “They will need products packed in a particular way and there’s no room for error,” says Langley, who advises entrepreneurs to think carefully about the logistics before agreeing to supply. He adds: “Can you cope with huge volume demands from a space and a cashflow perspective?”

When meeting the buyers, think about what they might ask you and ensure you’ve got all bases covered. “They expect category information and details on your own sales and market share,” continues Langley. “They’d expect to see a plan delivering a certain amount of profit to them in a 12-month period.”

Although some, like Firebox, will want to work together on marketing and PR, most will expect to see a plan, detailing how you intend to promote the product once it’s in-store, along with your own marketing strategy.

The deal

There’s always scope for negotiation, and several factors can strengthen your position. Naturally, it hinges on how much they want your product. “If it’s a me-too or has no real point of difference, their only reason for stocking your product is that they get a better margin, so you’ve got to be able to make it cheaper,” says Lindley. If you have a differentiated product or a brand that ticks their boxes, you’re in a stronger position. If you’ve got sales elsewhere and can market it yourself, even better. The more you’re going to have to rely on the retailer to generate demand, the greater margin you’re likely to have to give as an incentive for them to work harder selling it.

However, if the numbers don’t add up, or the margins or payment terms are not viable, you have to walk away. “It’s very tempting, when you’re looking for your first listing, to accept something that isn’t sustainable from your perspective,” says Lindley. “But it’s very difficult to claw back margin later.”

Langley concurs: “You can only offer what you can afford. You have to stick to your guns. If your business can’t cope with the volumes they ask for on an operational or cashflow level, or they squeeze you too hard on margin, there’s no point going ahead. Keep profit at the top of your mind, not the glory of selling more.”

“The only way to stay on the right side of the retailer is to keep growing your sales,” says Langley, adding that you must be in a position to deliver either sales or margin growth. “If you’re a business like us, you deliver sales growth by investing in marketing, bringing more consumers to what is still a relatively small category. If you’re in a more mature market, you have to produce new products and design formats that entice people to buy them over someone else’s.”

Robinson adds that tight processes are important too. “Suppliers that are efficient in terms of stock turnaround are good to work with,” he says. “Quick product shipping, accurate and efficient invoicing, and great post-purchase customer service are all really important.”

Just remember, there’s always someone else knocking on their door. They’ve only got so much shelf space and they need to make it work best for them.

How to impress a buyer

Be Different

Make sure your product is original and different enough from products we already stock – we will be less interested if we sell an identical product (and not interested at all if you are pitching a “copy” product)

Research

Look through our existing range and approach us with products that look like they will fit our brand values and customer base

Approach Early

Don’t wait till you’ve got your product stocked by other stores

Email First

Send us a brief email with an overview of the product concept, its unique selling points, target audience, suggested retail and cost price

Be Reliable

Have a clear understanding of your launch timelines and product availability

Be Responsible

Establish what safety certification will be required

Provide Service

Provide post-purchase customer care, technical support (if appropriate)

Stay on the Ball

Move quickly, be responsive, keep up communication, remain flexible

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Finding a web designer for your small business site: 6 top tips

Are you building a small business website? You need a top-quality designer to keep your site running smoothly and attracting customers – here’s how to find one.
Written by lucy.nixon
Updated on 7 July 2025

Startups.co.uk is reader supported – we may earn a commission from our recommendations, at no extra cost to you and without impacting our editorial impartiality.

As a small business owner, you should conduct proper market research, read customer reviews, and compare rival costs to ensure you are sourcing the best, highest-quality designer when it comes to building a business website.

Why should you do this? Well, choosing a good website designer will help ensure that visitors have positive interactions with your brand. And, if you own a small ecommerce business, a savvy designer will know how to make it simpler and more alluring for your users to make purchases – a win-win!

Poor design, on the other hand, can have a disastrous effect on your business. According to a 2021 survey by TopDesign Firms, 42% of consumers will leave a website because of bad functionality. So finding an experienced designer that is aware of common pitfalls and knows how to delight users is a crucial first step to setting up your business website.

No time to compare the market youself? Don’t worry – our specialist team of website researchers has designed a handy web designer comparison tool that matches you to quotes from the top UK web design services. It’s quick, simple, and 100% free to use.

Or, if you prefer, read on for our full step-by-step guide. We’ll go through the six best tricks and hints to selecting the ideal web designer, from the initial research stage to the website launch.

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Follow these six steps to find your dream web designer:

Decide between a web design company or freelance designer

You’ve decided to invest in a designer for your business website, rather than build one yourself. You want a site that promotes your business to new customers and has lots of features – and one that doesn’t compromise on functionality or user-friendliness.

So how do you get started?

The first step to choosing a web designer is to work out whether you want to work with a web design company or a freelance web designer.

Why choose a web design company?

Web design companies are typically creative or specialist developer agencies that work to deliver projects to different clients.

You should use a design company if you want a quicker turnaround time and better communication.

Design companies also typically work closely with branding and marketing teams, which means you’ll get support with aesthetics and SEO as well as web functionality.

Because of benefits like these, a design company will usually be more expensive than a freelancer – so it won’t always be the best option for SMEs.

But a web design company will not only create your website – it will also help manage it long term.

As a result, we recommend this option to small firms with high-maintenance website needs, such as those requiring an ecommerce or content hosting site.

How do I find a web design company?

One approach to finding a web design company is to search a directory such as the UK Web Design Association. Here, you can browse through listings and check agency profiles.

Or, for a more bespoke recommendation, we’ve designed a simple web design service online tool that only takes a minute to complete. Once done, you’ll get quotes from the top web design providers matched to your business’s specific requirements.

Why choose a freelance web designer?

A freelance web designer is a self-employed designer – not an organisation – who works for clients.

The difficulty with choosing a freelancer to design your site over an agency is that freelancers typically have fewer resources to ensure they can stay on top of deadlines.

But a good freelancer is usually more customisable than an agency and more open to new ideas, as you only need to discuss your idea with one person. Freelancers are also typically cheaper than web design agencies.

For these reasons, you should use a freelancer if your website is an aspect of your business, but not your main source of income – if you run a high street cafe or shop, for example.

Look at portfolios

Wix portfolio example

Example portfolio

You wouldn’t hire a portrait artist without first wanting to see their work – and finding a web designer is similar.

When searching for the best design company or freelancer for your site, make sure you get a proper, detailed look at their previous work – it can usually be found on their website.

Why is this important?

If your website is going to be effective, it needs to look great and perform brilliantly. It should also be unique to your business, so take care that the company you’re considering isn’t trying to palm you off with a templated design that’s used by countless other businesses.

It’s a good idea to have a look around the web to find sites that you like the look of, are easily navigable, and that you feel are effective in their market.

Usually, the designer will be credited on the site. If not, you could get in contact with the business itself and ask them who’s behind their build – which brings us to our next point…

Read customer reviews

Effective web design tends to recommend itself. If the sites that a designer has created do appear to be professionally designed and bespoke to each client, it’s time to check the designer’s reviews.

Sites like Trustpilot are useful forums to get feedback from, but there are also tools that can give you more industry-specific analysis, like Clutch.

Web designer customer reviews

Should a prospective designer really be reliable and capable of designing professional-looking websites, then their customer testimonials will prove it.

Alternatively, scout around and ask friends or fellow businesspeople if they know of a web designer whose work has been successful.

An unreliable and unproductive designer will not get a personal recommendation, so you will be assured of their quality this way.

Ask about their CMS

It’s important that the company you choose to create your website has a built-in, easy-to-use content management system (CMS).

Without one, you’ll be left with a site that’s impossible to update.

Being able to edit your website is crucial, as you need to regularly add fresh content to ensure it performs well in search rankings and accurately reflects your business over time.

Without a user-friendly CMS, you may find you need to contact the designer every time you want a change made, and this could mean steep charges – and a long wait – for even the smallest of website edits.

Examples of popular CMS systems include:

  • Joomla
  • Drupal
  • Magento

WordPress is also one of the top website management choices, and simple to get to grips with. Learn more about WordPress pricing in our expert guide.

Compare costs

Your website is an investment, but that doesn’t mean that handing over thousands of pounds at the outset is the right thing to do.

Not only should your website be affordable, it should also be tailored exactly to your needs. Beware of companies that try to bamboozle you with tech-speak in order to make you shell out for website features you really don’t need.

Designers can charge between £200 and £10,000 depending on the website you want to build. That’s why it’s really important to use our online tool and compare the market before signing anything. You’ll know exactly what you’re paying for and can watch out for hidden costs.

Companies that ask you to pay for your entire website in one lump sum could charge you for new features once it’s live, leaving you with an expensive outlay or a website that will quickly become outdated.

To find the best costs from the top web design providers, use our specially designed web design comparison tool. We’ll give you the best prices from the market in minutes – and all for zero charge.

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Communicate your idea

Even the best ideas can get lost in translation if they’re not communicated properly to your design team.

The final step for finding the right web designer is to confirm your vision of the website to them. This way, you know that they are fully onboard and capable of carrying it out.

Before signing any contract, make sure you sit down with the provider and let them answer any questions you might have (and vice versa).

Don’t let the late-stage aspect of these talks scare you into settling for a design that you’re unhappy with. You can always return to back-up options should you feel unhappy about a designer after your chat.

Ana Abrantes is a senior designer at a large-scale tech company. Abrantes says it is important to think of working with a website designer as a collaborative experience.

“The designer is there to help you and your business, so it’s all about trusting the specialist you’re working with. It’s easy to be impatient and want work to be done fast, but it’s important to remember that you’re working with a professional. Share your opinion politely and be open for follow up questions.”

Why should I find a web designer?

Designing, or redesigning, a website requires a great deal of time and work, which is why using a third-party expert can prove more efficient (if also more expensive).

Working with a web designer has lots of benefits. They can:

  • Help with SEO
  • Manage your website – and fix any bugs – long term
  • Offer more design experience
  • Provide access to extra resources
  • Save you time

Website builders are a cheaper alternative you can use to build your own website, but these are not without risks.

Startups that are completely new to web design will struggle with the more sophisticated builders like Adobe Dreamweaver, which requires a lot of coding knowledge. Builders can also take a lot of time to learn and set up.

We recommend Wix as our top-rated small business website builder, thanks to its superb list of website features and great design flexibility. Try its 14-day free trial today to get started.

Want to find the best website builder deal?

We’ve been working with UK SMEs for over 20 years, and we know that time is precious when you’re running a small business.

Our specialist team has built a simple comparison chart to give you the pros and cons of the top builders on the market. Try it today and get the best prices for zero charge.

Choosing a web designer or web design company: summary

Our six simple steps to discovering an accomplished and effective web design agency or freelancer are:

  1. Decide between a web design company or freelance designer
  2. Look at portfolios
  3. Read customer reviews
  4. Ask about their CMS
  5. Compare costs
  6. Communicate your idea

Overall, we think that web design companies are the better choice (if you can afford them).

Whilst typically more expensive, this option tends to give you a more experienced designer. Their larger teams can also ensure that your site will be delivered on schedule.

Alternatively, web design freelancers are a budget-friendly choice for SMEs that need a website simply to have an online presence, and don’t need lots of bells and whistles.

But in terms of overall value for money, we recommend that small business owners go the agency route. It offers much-improved functionality and near-guaranteed customer satisfaction.

To get started with a web design company today, use our free online service that finds the best quotes from the top UK web designers for your business – all for zero charge.

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How to start a waste and recycling business

Looking to set up a business in the waste and recycling sector? Check out our step-by-step business guide here...
Written by lucy.nixon
Updated on 7 July 2025

There’s an obvious attraction to setting up a waste and recycling company – the resilience of the sector. No matter what we’re doing, we’re usually creating waste that needs to be gotten rid of one way or another. And the rapidly increasing importance of sustainability means that more and more attention is being focused on recycling, a key part of the UK’s efforts to combat climate change.

Overall, waste and recycling businesses weathered COVID-19 pretty well. As building sites and manufacturing facilities were forced to close, commercial and industrial waste volumes fell – however the impact was balanced by an 8% increase in household waste volumes.

Like many sectors, the market is dominated by a small number of large companies, but there are real opportunities out there for savvy new business that can target specific niches and offer excellent service. If you’re thinking about starting a waste and recycling business, this guide is full of expert insight on the main challenges of the industry, the rules and regulations you’ll need to follow, and how much it might cost to get started.

Looking to start your own business? Our guide to starting a business includes expert advice for getting your business off the ground.

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💡Key takeaways

  • A waste and recycling business collects, processes, and reuses or disposes of waste materials.
  • Demand for waste management is rising as the UK and EU rules fine businesses for sending too much waste to landfills.
  • There are many rules around waste management, primarily the Waste Framework Directive and the Environmental Protection Act.
  • Major costs include premises for storage, a fleet of vehicles, and machinery.

What is a waste and recycling business?

On the face of it, it doesn’t look like the best time to set up in the waste and recycling sector. Despite lots of green talk, local councils across the UK are stockpiling sorted household waste in warehouses. People are more environmentally aware than ever, but recycling companies are just sitting on their waste paper, scrap metal and plastic bottles. Not processing anything, mind, simply …waiting for the market to bounce.

The whole market for recycled output is in a state of flux. This is mostly because commodity prices have been bitten by the credit crunch: a sharp fall in demand from markets in the Far East has put a once booming sector in a tough spot.

Jason from AnyJunk.co.uk, an eco-friendly waste removal company based in London, explains the situation: “When I started this business around four years ago, we were getting about £50 a ton for mixed metal. Up to around three or four months ago it was £200 a ton. And then not too long ago it was down to £5. Most people who don’t have large accounts and stuff were being paid nothing.”

So, from the perspective of a company involved in pure recycling, things are bad.

That’s not to say that it’s not a good time to start up in waste or recycling, however.

With governmental and Europe-led policies such as the Waste Framework Directive making green targets concrete, and pressure rising on commercial organisations to manage their waste responsibly, demand is set to grow in the waste and recycling sector. Even now, all boroughs are subject to considerable fines if they exceed their quota of waste sent to landfill and until very recently, such was the extent of demand that most of the waste collected for recycling was sent abroad for processing.

But demand or none, times are tough: to be successful, you’ll probably have to be a bit inventive in the type of waste or recycling business you set up.

In the start ups league, a recycling company is most likely to be either a service, collecting recyclable waste from businesses and consumers for instance; or a small scale niche processor, using recyclable and recycled material to make new products. As generally low income, high growth vehicles, start-ups aren’t all that suited to mainstream recycling. Setting up your own glass recycling plant backed by millions in debt is not really an option.

The waste and recycling sector is a broad one though, and there are lots of areas that remain unexploited — often because big recycling companies and waste management outfits believe the market value is too small. You could focus on collecting materials that are difficult to retrieve or tricky to recycle, like certain plastics, carpets, and synthetic fabrics. And there are many examples of small glass companies and recycling-focused companies that come up with innovative ways of using glass for instance.

Who is the recycling business suited to?

But there are niche opportunities in the way that services are offered too: new companies can innovate and tailor-make waste solutions for individual producers of waste. Think: how might you cater for a business’ particular waste needs? Are there materials that local councils do not take? Are perfectly retrievable items going from households to landfill because it is too difficult for people to do anything else with them? Service-centric waste and recycling firms need to focus on the hassle factor and exploit it.

Our case studies are service-led companies which think this way: AnyJunk.co.uk is a waste removal service which sends 70% of collected content away from landfill and Green Works collects, reuses and recycles quality second-hand office furniture.

Colin Crooks from Green Works believes service is key to small scale waste and recycling ventures: “The people who will survive in recycling are those who provide an excellent service. The material is not of any value to the person who’s sitting on a load of it: they just want it gone out of their premises.”

Colin is confident the market is ready for fresh waste and recycling startups, and says there are a lot of things that could be recycled better or recycled more. Equally there are a lot of things that are being recycled currently where there are opportunities to provide a higher level of service and win contracts: you could decide to start up a man-and-a-van enterprise tomorrow and do pretty well if your service was good; you could become a dealer in scrap metal (though really, now’s probably not the best time); or you could try something different, as Jason from AnyJunk.co.uk suggests. Think niche and you could be on to a winner: “Crockery, for example,” he suggests “I’m sure there’s quite a niche market for it. It could be used for road building if it was crushed up.”

It’s worth bearing in mind though, that even if you find a great recycling idea, recycling itself is not the main battle. Getting the material in the first place is a lot more difficult, Jason warns: “One of the big challenges of recycling is not the processing of the materials once you’ve got them. It’s trying to get the materials out of the waste you get from various organisations.”

You should also bear in mind when sourcing your clients: if you are making money at the producer end, they are also your suppliers. The service you offer at collection point should be at the top of your list.

At the end of the day, the trade in waste is motivated by profits, not ideals of sustainability and it’s not only do-gooder hippie types that get into the recycling game. It’s not all milk bottles and good intentions – or even mobile phones and toner cartridges: there is a lot of money to be made in waste, and the recycling sector is generally dominated by very large corporates.

However, if green thinking is your motivation, don’t despair. There are plenty of successful, ethically minded companies out there. Colin Crooks of socially-motivated enterprise, Green Works, tells us that while the recycling sector has a corporate culture, a lot of companies are socially motivated too. He explains: “It’s fifty-fifty: a lot of people look at recycling as a tremendous investment opportunity, and there are certainly fields wide open in which they can make some money.

“But it’s also something that people feel passionate about and want to take part in. A lot of these companies will do it even though it’s not financially viable in the material sense. They’re driven by other factors – by passion for the environment.”

It’s important to remember, however, that just because you’re a green enterprise, it doesn’t mean that your competition is limited to other green organisations. You may have to compete with large corporates and well-established medium-sized firms who will be out to make a profit – even if you aren’t.

Rules and regulations

Legal issues really must be top priority if you decide to go into waste and recycling. All kinds of waste disposal and recycling initiatives are subject to stringent rules and regulatory requirements — even if the material your organisation deals with is not hazardous.

It is a very complicated area and different rules apply depending on what type of business you plan to run, what materials you’re handling and the volumes you’re dealing with as well as how long you’re keeping them for. A number of health and safety laws only become relevant when you start to grow and have a certain number of staff members too. Small or large, though, legislation is not something that you can neglect. Jason of AnyJunk.co.uk explains:

“What tends to happen is that people go into waste and recycling without ticking all the health and safety boxes. They don’t get the licenses and then they realise that they’re in breach of everything. And it’s all over.”

Falling foul of legislation is very easy for a start up to do, and likely one of the reasons why waste management and recycling companies tend to be quite large, with dedicated departments for such things as legal compliance.

In overview, there are four areas that you should consider: waste legislation; planning consent; legislation dealing with the carrying of waste and transporting it; and health and safety.

The heavy hitters regarding waste legislation are: the Waste Framework Directive and the Environmental Protection Act. And if you plan to run a waste removal service for businesses, you must also be aware that all businesses you work with:

  • Have a ‘Duty of Care‘ requiring them to ensure their waste is disposed of safely and properly even after it has been passed on to another party such as a waste contractor, or  recycler. This ‘Duty of Care’ has no time limit and extends until the waste has either been disposed of or fully recovered;
  • Must ensure waste is transferred only to an authorised person or to a person for authorised transport purposes;
  • Must transfer a written description of the waste that will enable other persons to avoid the unauthorised or harmful disposal of the waste and to comply with their own ‘Duty of Care’.

Although at present, there are no legal requirements on the waste industry to enforce health, social and environmental standards for exported recyclable materials, waste and recycling companies in the UK are under great pressure to supply all licenses and literature documenting and proving their good practice.

Planning consent – which every waste company needs to get from their local authority or council – is often difficult to get. Your ideal site or waste transfer centre may be in a central location within an urban environment, but it likely won’t happen. Local residents often object to and even block waste projects.

To find out exactly what your legal obligations are regarding licensing, registration, and operation, the Department for Environment, Food and Rural Affairs and its public body, the Environment Agency should be your first port of call. It can also be difficult to get relevant licensing from the Environment Agency, as specifications are quite particular.

For licensing of vehicles you should contact the Driver and Vehicle Licensing Agency. These bodies will be able to tell you exactly what your company’s responsibilities are, depending on your specialty.

The Chartered Institute of Wastes Management and the Environmental Services Association offer training courses on everything from waste carriers and related controls to Duty of Care and environmental permitting and exemptions.

It’s worth noting that if your company has overlooked legislation, but has made every effort to comply, you’ll most likely get your knuckles rapped and get a fine, but no more. A lot of authorities are understanding if you can provide evidence that you’re trying your best.

However, as Jason says, you should try to get things right from the start: “People should definitely not factor in fining! They should try get it right the first time round. The Environment Agency is happy to help.”

How much does it cost to start a waste and recycling company?

Depending on what area you are going into, start-up costs for waste and recycling can vary. According to Colin of Green Works, it has become more expensive of late – possibly as a result of the drop in commodity prices:

“Startup costs were initially very low, and there was relatively easy access. Those costs have risen quite considerably, but it’s still not as expensive as the cost of entry into other forms of business like financial services for instance – because the quality of the staff you need is quite different.”

There’s a degree of investment, and just how great this investment is may depend on your focus; i.e. whether you’ll need space for storage or a workshop; machinery for processing or manufacturing; a fleet of vehicles; or skilled staff.

If you require a large square-footage for a warehouse most of your money will go into premises.

A vehicle fleet can cost a lot too, depending on what kind of product you’re picking up, and exactly what model you go for. Trucks can vary from £30,000 to £10,000, to just a few hundred in the waste business, depending on your specification.

You also need to factor in costs for applying for planning consent, licensing your service and your fleet.

Remember however that you can subcontract out a lot of these things: you don’t necessarily have to have a fleet, machinery and premises yourself, particularly when first starting out.

 Tips and advice for a waste disposal business

Do your homework before jumping into anything.

Contact all the industry bodies and government agencies and research your proposition thoroughly: get as much advice as you can. The legislative side really is the main challenge in waste. Jason of AnyJunk.co.uk suggests that for particularly tricky pieces of law, it may even be worth it to bring in a consultant.

“For health and safety, we struggled. So we just used a consultant to come in and review our processes and help us. For any business that involves manual handling or moving parts and that employs lots of people, it’s definitely an investment worth making.”

Like with any startup, it’s important to have a very focused service offering.

People need to know exactly what you do.

This is a bugbear of AnyJunk.co.uk’s Jason, who says: “An awful lot of people in waste talk about ‘waste disposal’ as their thing, or ‘waste recycling’, but they don’t actually talk about the service.”

He advises that you focus on the front end, on what the customer is getting, or how they’re going to order it. You also need to consider who’s going to help your customer effect their order as well as how they’re going to be invoiced and what information they’re going to get.

The waste and recycling sector is very tough, and much of your competition will be larger and more established.

When you’re starting out, it’s worth taking the time to find bigger brands to sit beside. If appropriate, look for big clients – even if they do not necessarily use you very often, it will give you more credibility.

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Online retailers report increase in price comparison usage

New research suggests consumers are becoming more price savvy when shopping online
Written by lucy.nixon
Updated on 7 July 2025

Online retailers are being encouraged to market their products via comparison sites as new research reveals a recent increase in consumer use.

Around 43% of online retailers said the proportion of sales coming through from price comparison sites had increased over the last 12 months, according to a survey by online research firm E-consultancy and DoubleClick.

Online retailers said, on average, 10% of sales were referred to them via price comparison channels.

The period of austerity we have entered is driving more people to comparison engines so it makes sense for most retailers to make sure they are visible on these sites,” said Linus Gregoriadis, head of research at E-consultancy.

Retailers are making hundreds of millions of pounds in sales as a result of comparison engine traffic and the proportion of sales attributable to this channel is increasing.”

However, despite reported success with sales being driven from price comparison sites, many retailers are still having trouble managing data and measuring exact values, the research found.

More than a third of retailers reported difficulties in keeping feeds updated and tracking return on investment.

According to the survey, over a fifth of online retailers are not currently using price comparison sites, while 16% use just one. The most popular site among retailers was Google Shopping, followed by Kelkoo and PriceRunner.

© Crimson Business Ltd. 2008

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Dog walking license and regulation information: what you need to know

Startups takes a look at dog walking laws and dog walking qualifications in the UK
Dog walking license and regulation information
Written by lucy.nixon
Updated on 7 July 2025

Although there are relatively few regulations specifically targeted at dog walkers, businesses providing a service must get public liability insurance when starting a dog walking business.

In fact, according to a recent report from insurance company Insurantz.com, many professional dog walkers are putting themselves at risk by not being adequately covered.

“We are doing everything we can to raise standards within the industry,” says Lewis from NarpsUK. “We currently sit on government committees to create Model License Conditions and Best Practice Guides. Our members sign up to our terms and conditions and code of practice and we insist they have insurance, criminal record checks for holding keys and local authority licences where required. They also receive support and guidance from us.”

View this step-by-step guide which has everything you need to know about dog walking insurance and the cover you’ll need.

NarpsUK members can utilise service agreements drawn up by the organisation’s legal team and it offers a discount with one of the UK’s leading pet sitting and dog walking insurance companies.

Other precautions NarpsUK suggests taking before embarking on starting a dog walking or pet sitting business include:

  • Meeting owners prior to the first booking
  • Restricting the number of dogs walked to no more than four at a time
  • Keeping records of all work undertaken
  • Protecting clients’ personal information

If this is the start-up business idea for you, be aware you may have to deal with dogs injuring other dogs or people while in your charge. It’s vital to have the right insurance cover to deal with legal claims, should they arise.

The Kennel Club’s dog law site also lists a number of rules and regulations people working with dogs must abide by, including:

    • The Clean Neighbourhoods and Environment Act 2005 You could be fined up to £1,000 if you: fail to pick up faeces, fail to keep a dog on a lead or put it on the lead when directed to do so, or allow a dog to enter land from which dogs are excluded.
    • The Control of Dogs Order 1992 All dogs in a public place must wear a collar with the owner’s name and address on.
    • The Dangerous Dogs Act 1991 It is against the law for a dog to be ‘dangerously out of control’ in a public place. The Kennel Club says something as simple as the dog chasing, barking at or jumping up at a person or child could lead to complaints, so make sure it is under control at all times.
    • The Road Traffic Act 1988 Dogs must be on a lead at all times on roads. If the dog you are walking is injured in a car accident, it is up to the driver to stop and give their details to you.
    • Dogs (Protection of Livestock) Act 1953 It’s against the law to allow a dog to worry livestock on farmland. If a farmer catches a dog worrying his livestock, he has the right to stop the dog – even if that means shooting it.
    • Dogs Act 1871 It’s an offence if a dog is dangerous and not kept under proper control, which is usually regarded as not on a lead or not muzzled. The law applies wherever an incident happens.

Read our full guide to starting a dog walking business.

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How to start a dog walking business

Wondering how to start a dog walking business? This guide features unique insight into setting up, the rules and regulations you need to follow, and the costs involved.
Written by lucy.nixon
Updated on 7 July 2025

If you’re considering starting a business, and you love animals, then what about setting up a dog walking business?

Pets provide huge business potential, and with around 36% of households in the UK now owning at least one four-legged friend, there are plenty of customers and opportunities out there if you know where to find them.

We’ll explain how to start a dog walking business in just nine steps, and provide you with all the expert tips and insights you need to walk your way to boneafide business success.

You can also use the below steps to build your business plan. If you haven’t already, check out our business plan template for more guidance on what to include.

💡Key takeaways

  • You don’t need a formal qualification to be a dogwalker, but you should get a certificate in canine first aid and CPR to build client trust.
  • You must check local council rules on dog walking, obtain public liability insurance, and adhere to RSPCA guidelines.
  • The cost of starting a dog walking business is relatively low, typically £300-£400.
  • If you need experience, volunteering at a local dog shelter or kennel is a great way to start.
  • Some good niches include specialising in particular dog breeds, offering dog-sitting services, or focusing on short or long walks.

This article will cover:

Step 1. Earn your qualifications

You don’t need any formal experience or qualifications to be a dog walker.

That said, it’s a good idea to familiarise yourself with handling dogs of all breeds and sizes. Different breeds have specific requirements and temperaments, so we recommend undertaking a technical competence certificate in pet sitting if you don’t already have dog handling experience.

The best courses will also provide opportunities for upskilling, such as gaining certificates in:

🐶 Canine First Aid
🐶 Canine CPR
🐶 Animal Health, Husbandry and Handling
🐶 Animal Nutrition

Upskilling not only helps to educate you, but will put potential clients’ minds at rest that their pets will be well looked after and in good, confident hands (meaning you’ll also be more likely to win more clients as a result).

If you don’t have any existing experience looking after dogs, consider volunteering at a local kennel or dog shelter to help you gain valuable skills and ensure it’s the right career choice for you.

Step 2. Research the market

It’s important to research the market to work out where your business fits.

You’ll need to determine what dog walking services are in demand in your area, as well as the businesses that are already in operation. This is also known as competitor analysis.

When carrying out competitor analysis, ask yourself:

  • Is there a gap in the market that I can fill?
  • Who is my target market?
  • What demand can I cater for?
  • What are the customer needs? Are people looking for weekly or seasonal help?
  • Will I have access to parks and fields, or must I travel further afield?

You’ll need to find a niche for your dog walking business to stand out. Examples include specialising in certain breeds, short or long walks, or combining dog walking with home-sitting services, or even dog grooming.

When choosing your niche, think about what your SMART goals are and what you hope to achieve with your dog walking business.

Step 3. Understand the regulations

You must comply with various dog walking regulations when setting up a dog walking business to ensure you are operating within the law.

You don’t need a specific licence to become a dog walker, but it is your responsibility to check what your local council’s rules are. Some are stricter than others, especially if you are planning to offer at-home services such as dog sitting.

For example, Wandsworth Council recently introduced laws that mean all dog walkers must apply for a licence to walk their dogs in nearby parks and green spaces. Consider also:

Pet insurance

You must take out dog insurance that covers public liability (PL), animal accidents and injuries, and loss of animals.

Comprehensive insurance for a dog walking business starts at around £80 per year but it is invaluable for protecting you and your business.

Remember, if you hire a member of staff to help you then you will also need to take out employers’ liability (EL) insurance too.

Criminal record checks

Whilst it’s not essential to have a criminal records check, applying for one helps to build trust with clients who are leaving their beloved pets in your care.

You can apply for a standard DBS check online, with prices starting from £18.

Number of dogs

There are no formal rules on the number of dogs you can look after and walk at the same time. But it is recommended by RSPCA guidelines that no more than four dogs (each with their own lead) should be walked at once.

Some local councils are also beginning to set and enforce their own rules surrounding the dog:walker ratio that they will allow.

Consider how many dogs you can safely look after at once before you start taking bookings, and check with your local county council website to ensure you can continue putting one paw in front of the other!

Heath checks

The RSPCA guidelines also provide advice on how to look after dog health. As a dog walker, you should ensure that:

  • All dog clients must be vaccinated, wormed and treated for fleas regularly, unless certified exempt by a veterinary surgeon
  • Any dog in a public place wears a collar with the name and address (including postcode) of the owner engraved or written on it
  • In the event of an emergency, you have the contact details of all of your dog owners accessible at all times

Paying tax

Just like any UK business, you will be responsible for registering as self-employed with HMRC and paying tax.

As you’ll need to fill out a tax return, you might also consider upskilling in areas such as bookkeeping to ensure you can turn a profit and keep on top of your tax requirements.

Step 4. Calculate your budget

You should budget betwen £300-£400 to set up a dog walking business.

While the setup is certainly cheaper than most business ideas, there are still some costs involved with starting a dog walking business. Some of the things you will need to budget for include:

🐕 Insurance – this is essential to protect you from any unforeseen expenses. Comprehensive plans usually cost between £80 – £150 per year
🐕 Equipment – including leads, dog bowls, poo bags, balls, a harness and a first aid kit. For this, we suggest budgeting around £150 – £200
🐕 Transport – you may need a car or van if your customers are not close to you. We recommend waiting until you are confident you can commit to a long-term dog walking venture

5. Set your terms

An important step when getting started as a sole trader is setting your employment terms.

As a self-employed dog walker, you’ll be in charge of when, where and how you work, so you must set clear terms before you start onboarding clients.

Some of the questions you’ll need to ask yourself when setting your terms include:

🐶 What days and hours will I work?
🐶 What type of dog do I want to walk?
🐶 Will I focus on certain breeds?
🐶 Will I have a maximum size/weight of dog?
🐶 Will I exclude any particular breeds?
🐶 What will my pricing strategy be?
🐶 Do I need a business website to take bookings?

Step 6. Fetch your clients

When you start taking on clients, you’ll need to think logistically.

You’ll need to be somewhat selective when taking on new clients as a dog walker. First of all, you’ll need to design client forms to gather all the necessary information about your pet patrons, including:

🦮 Booking form
🦮 Service agreement
🦮 Essential release form (outlining the rights and obligations of your clients)
🦮 Veterinary release form (giving you permission to take the dog to a vet in an emergency)

Proximity is also important. If you need to visit parks and fields that can’t be reached on foot, then you’ll need a pet-friendly mode of transport. Many dog walkers opt to purchase a small van that’s suitable for dogs, to drive between clients.

Make sure you aren’t committing to walk dogs that are miles apart from each other, and give yourself plenty of time to get to where you need to be. You’ll need to allocate dog walking time, plus travel time, when planning your diary.

Step 7. Set up your business

It’s time to officially register your business. There are three main steps involved:

📛 Register your business name

You’ll need a name that’s unique to you, not already in use and that represents your business offering. Ensure it’s something people will find easy to pronounce and remember.

Once you’ve decided on your name you can register it online with Companies House for a minimum of £50. Be wary of sites that promise to register your business for free.

🏷️ Decide on your branding

Your personal brand will help to sell your business and enable you to stand out from the crowd.

Branding covers everything from logos, font styles and colours, to the tone of voice you use (e.g. funny, informative, or professional).

💻 Build a website

Setting up a website is a great idea for those running a dog walking business. Your website can act as a central point for all of the information about your services. And you can get started at no cost using a free website builder.

Your website should include a client portfolio. Adding a booking system or a QR code on your website will also allow users to book a dog walk directly, or you  can direct people to your website in your marketing activities.

Most website builders will also give you a business email address. You should use this to contact customers and create a professional-looking port of call for prospective clients to reach out to.

Step 8. Promote your business

To secure clients for your dog walking services, you need to promote your business.

Marketing is essential if you want to build up a loyal following. Ways to promote your business this year include:

  • Social media – set up business accounts on Facebook, Instagram, or TikTok. From these, you can create and share content relevant to your business, and post in local community groups to advertise your services.
  • Flyers – these should feature your name and logo, and include key details such as your services, rates and contact details. Distribute your flyers to homes and local businesses such as vets, kennels, pet shops and shelters.
  • Local events – setting up a stall at local fetes and markets to showcase your services can get your face and business known. Offer a promo code to those who interact with you to build up your customer base.
  • Customer reviews – people are far more likely to book you if your clients leave positive feedback. Ask customers to leave you a Google Review. You can also feature these on your website and in marketing materials.

Summary

If you’re a dog lover and have experience looking after our four-legged friends, setting up a dog walking business could be the perfect way to combine your passion and skills with making money.

The most important step to remember when learning how to start a dog walking business is that experience is key. Build up your skills, and don’t forget to ask for reviews to help boost your local reputation.

Many people decide to start a dog walking business alongside their existing job first, to be sure it’s the right choice for them and to provide space and time to build up a client base.

Once you’re ready to take the plunge, we recommend downloading our free business plan template so you can formalise your above ideas and un-leash your potential.

Lucy Nixon profile
Lucy Nixon - content writer

With 10 years experience in the digital marketing industry, Lucy is a content writer specialising in ecommerce, website building and all things small business. Her passion is breaking down tricky topics into digestible and engaging content for readers. She's also committed to uncovering the best platforms, tools, and strategies, researching meticulously to providing hand-on tips and advice.

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What legislation do you need to know about for recruitment?

Discover the various regulations and compliance documents you need to know about as an employer or recruitment agency during the hiring process.
Written by lucy.nixon
Updated on 7 July 2025

Wondering how to start a recruitment business? Find out all you need to know with our thorough guide.

For small business owners, the recruitment process can be both an exciting and stressful experience.

It’s not just about finding the right fit for the role. As a recruiter, there are various recruiting laws and legislation that you need to be aware of to ensure your hiring process is fair, inclusive and transparent.

Whilst there isn’t one single UK law that governs recruitment, there are various pieces of legislation that are relevant, and that help to protect both employers, recruiters and candidates when hiring.

In this guide, we’ll explore the legislation to ensure you have all the information you need to hire staff professionally and within the law.

This article will cover:

What are the laws governing recruitment in the UK?

Let’s take a look at some of the laws governing recruitment in the UK.

The Equality Act

The Equality Act 2010 ensures that individuals are protected from unfair treatment, and prohibits discrimination based on protected characteristics such as age, race, gender, religion, sexual orientation and disability.

When it comes to recruitment, The Equality Act mandates that every stage of the recruitment process must be carried out fairly, without bias and that employers and recruiters must treat every candidate equally.

This means that the decision to hire a candidate must be made solely based on their skills, experience, and fit for the role. Queries about protected characteristics might actually be illegal questions to ask in a job interview.

Employment Agencies Act

The Employment Agencies Act (EAA) 1973, is the piece of legislation that is most specific to recruitment businesses.

It includes various rules and requirements, stipulating that:

  • Someone looking for work cannot be charged a fee by a recruitment agency for helping them to find a position
  • When a candidate is hired, they must be given a written contract that details things such as pay, hours and holiday allowance
  • The candidate must be made aware that they are applying for a role via a recruitment agency as opposed to directly with the employer

GDPR and data protection

Under the The General Data Protection Regulation Act (GDPR) 2018, employers and recruiters are obliged to handle candidate data responsibly and in accordance with seven key principles.

These are:

  • Lawfulness, fairness and transparency – use personal data in a way that is legal, expected, and transparent
  • Purpose limitation – use candidate data only for the reasons it was collected
  • Data minimisation – limit the amount of personal data to what is necessary to do the job in question
  • Accuracy – ensure personal data is accurate and up-to-date
  • Storage limitation – only keep a candidate’s personal data for as long as it is needed
  • Integrity and confidentiality (security) – keep personal data secure and protected from unauthorised access, loss or damage
  • Accountability – take responsibility for data protection compliance, and keep records to demonstrate how this is and has been achieved

They must obtain all of the relevant consent from a candidate before they collect their data, ensuring the data is accurate and secure.

All candidates have the right to access or remove their personal data and a recruiter or employer is legally obliged to comply with these requests.

Right to work

As part of the Immigration, Asylum and Nationality Act 2006 employers must conduct right to work checks on all new employees. All employers must establish that a worker has the right to work in the UK before they are formally hired for the role.

Right to work checks can be done manually via an identity service provider or the Home Office Online Checking Service, identity digital service provider (IDSP), depending on the nationality and immigration status of the candidate.

While the above list covers the main UK legislations that recruiters need to be aware of, there are plenty of other acts and laws that can impact the recruitment process. Some others that it’s a good idea to familiarise yourself with include:

  • The Rehabilitation of Offenders Act 1974 – this allows candidates the right to not disclose certain past convictions unless applying for certain roles such as those working with children or vulnerable people (learn more in our guide to hiring ex offenders)
  • National Minimum Wage (NMW) and National Living Wage requirements – with the National Living Wage being higher than the National Minimum Wage, which is the amount of pay that all almost all workers are entitled to be paid per hour in the UK
  • The Health and Safety at Work Act 1974 – job adverts must accurately depict the working conditions of the role
  • Flexible working – while not directly related to recruitment, the Flexible Working Bill means an employee must allow a candidate to request flexible working from Day One of employment, meaning this is likely to come up during the recruitment process.

Do all recruitment agencies need a licence?

The short answer is no, recruitment agencies no longer need a licence to operate in the UK. There are various legislations however that they must comply with, which we’ve already discussed in this article, and there are some exceptions.

Certain sector-specific recruitment agencies will need a licence, or at the very least to be registered with a professional body.

For example, those recruiting staff to work in the care sector must be registered with the Care Quality Commission (CQC) and those recruiting for food processing, horticultural or agricultural roles will need a licence from The Gangmasters and Labour Abuse Authority (GLAA).

Employment contracts

Once you’ve chosen the successful candidate for a role, they then must be given an employee contract. An employee contract should include:

  • The employee’s new job title and a clear description of the job role
  • Specified working hours
  • Working conditions (e.g. is the role office-based, will it include site visits etc)
  • Salary and wage plus details on bonuses, overtime and payment frequency
  • Holiday entitlement
  • Details of probationary periods
  • Notice period – both during and after the probationary period
  • Any confidentiality or non-compete clauses

There are also different types of employee contacts, depending on the organisation and role.

Permanent contracts

A permanent contract offers employees ongoing employment with no end date.

Temporary contracts

A temporary contract is for a fixed period. The end date should be stated in the contract.

Zero-hour contracts

A zero-hours contract provides no guaranteed number of set hours for a candidate, but offers flexibility for both the employer and the candidate.

It’s important to note that the UK government has introduced changes to the zero-hour contract, including that employees now have the right to a contract that reflects the number of hours they regularly work. Employees can still opt-in to a zero-hour contract if they wish to do so.

What’s the importance of compliance?

Understanding and complying with recruitment laws and legislation is essential for employers and recruiters alike. Doing so ensures you are conducting fair and transparent recruitment and promotes a positive workplace from the get-go.

Failure to comply could result in fines and even legal action, not to mention a huge dent in your reputation. Some ways you can ensure you are always staying compliant are:

  • Keep a close eye on new and changing legislation to ensure you are always acting within the law
  • Implement a transparent hiring process that involves clear communication and feedback
  • Write inclusive job descriptions that do not discriminate against certain groups or characteristics
  • Conduct regular training sessions and workshops for everyone involved in the hiring process

Summary

Hiring new employees should be an exciting time as your business grows and new additions to the team create new dynamics and opportunities.

Whether you are an in-house recruiter or work for a recruitment agency, the rules and regulations around hiring staff remain the same.

Ensuring you are compliant and offer an inclusive and transparent process helps to boost your reputation and protects both employers and candidates from unnecessary stress and problems.

Remember, laws and legislation change all the time, so always do your research to ensure you are fully compliant and acting within all the relevant legal requirements.

Lucy Nixon profile
Lucy Nixon - content writer

With 10 years experience in the digital marketing industry, Lucy is a content writer specialising in ecommerce, website building and all things small business. Her passion is breaking down tricky topics into digestible and engaging content for readers. She's also committed to uncovering the best platforms, tools, and strategies, researching meticulously to providing hand-on tips and advice.

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Business Link the next chapter: Gov.uk

What has Business Link been replaced by in England? Find out here
Written by lucy.nixon
Updated on 7 July 2025

Business Link is now closed. It was originally created as a national network of business support agencies and was managed by the Small Business Service, a government agency set up to champion small business.

The network of more than 40 offices, a vast website, and a telephone contact centre was tasked with providing impartial advice, resources and information on all aspects of planning, running and growing a business in England.

While general business advice was provided free of charge, there was an expectation for client businesses to contribute to the costs of providing some services at a subsidised rate.

The Business Link network operated via the UK’s nine Regional Development Agencies (RDA), which were originally  launched in 1999 with the aim of bringing “fresh vitality to economic development and social and physical regeneration in the regions” through a business-led approach. Each of the government-funded organisations encompassed a Business Link service, designed to advise businesses on anything from starting up to international trade rules. All nine of the regional agencies, which had cost the government £154m, were officially shut down in late 2011 as part of the government’s austerity measures. Initially, businesses were still able to access information via Business Link’s online portal.

In October 2012 the Businesslink.gov.uk website, which had running costs of £35m a year, officially closed and was replaced by a pared back portal on Gov.uk.

The replacement service is reported to have a budget of £1.7m and unlike its predecessor, the Gov.uk site does not offer any practical one-to-one business advice.

Business owners can still access the old Business Link information through the national archives, however, this advice will not be updated beyond October 17 2012. Business Link will still be running a support telephone service on 0845 600 9006. Open Monday to Friday 9am to 6pm, the helpline offers both a quick response service to people with queries about starting a business, as well as providing more in depth help for people with complex enquiries.

In addition, and as a consequence of the ’emergency budget’, in 2010 the government announced that the UK’s nine government-funded RDAs would be replaced by Local Enterprise Partnerships (LEP).

Originally intended to be voluntary, self-funded partnerships between businesses and local authorities, it was later decided that the LEPs would be supported by the government to the tune of £24m.

Other UK business services

While provision of a government-funded advice service is no longer available in England, there are equivalent services for Northern Ireland, Wales and Scotland:

Scotland Scottish Enterprise. Tel: 0141 248 2700 www.scottish-enterprise.com Wales Business Wales Tel: 03000 6 03000 http://business.wales.gov.uk/ Northern Ireland Invest Northern Ireland Tel: 028 9023 9090 www.investni.com

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What is a Community Interest Company (CIC)? Business structure explained

Learn how Community Interest Companies work, their advantages and how to set one up in this comprehensive guide.
Social impact
Written by lucy.nixon
Updated on 7 July 2025

Thinking about starting a business with a social purpose? If so, you might have come across the term Community Interest Company (CIC), but what is a CIC and how do they operate?

A CIC is a unique type of limited company that is set up to provide community benefits or achieve a social purpose.

Whether you’re an aspiring social entrepreneur or simply exploring ethical business models, understanding what a CIC is, and how it operates, can help you decide if it’s the right fit for you.

Let’s take a look…

This article will cover:

What is a Community Interest Company?

A Community Interest Company (CIC) is a type of business that is formed with the aim of helping the community rather than making money for owners and shareholders.

A CIC still operates like a regular business but  must reinvest the majority of its profits into supporting its chosen social cause.

Just like any other business, a CIC is registered with Companies House and HMRC and usually no shares are issued.

A CIC can still make money and pay salaries however any dividends are capped at 35% of retained profit (more on that later!)

Is a CIC a charity?

While both CICs and charities must adhere to tight regulations, they are not the same thing.

Like charities, CICs are designed to achieve a social purpose but they differ in business structure, regulations and how they operate.

For example, while a CIC is a type of limited company, a charity can take various legal forms and is registered with the Charity Commission rather than Companies House.

Charities must also be entirely non-profit and operate via donations, grants and fundraising. A CIC meanwhile can and should raise a profit (that is then reinvested back into the CIC) and can raise money via investments and traditional trading.

How to set up a CIC: step-by-step guide

Starting a Community Interest Company (CIC) is a great way to run a business with a social mission.

Step 1: Choose the Right Legal Structure for Your CIC

Before you register your CIC, you need to decide on its legal structure. CICs can be set up in two main ways:

Company Limited by Guarantee – No shareholders, just guarantors who agree to support the business financially if needed.

Company Limited by Shares – Owned by shareholders who can receive dividends (capped at 35% of profits).

You’ll also need to undertake all the usual steps for setting up a business too, such as registering a company name, writing a mission statement and budget planning.

Step 2: Draft Your CICs Community Interest Statement

Every CIC must submit a Community Interest Statement (Form CIC36). This document explains:

  • What your CIC does
  • Who your CIC will benefit
  • What you will do with profits

The CIC Regulator will review your submission to ensure your company genuinely serves a community purpose.

Step 3: Prepare your essential documents for CIC registration

To officially register your CIC, you’ll need the following paperwork:

  • Form IN01 – the standard company registration form for Companies House.
  • Form CIC36 – your community interest statement
  • Memorandum and Articles of Association – the governing rules for your company including an asset lock, details on profit redistribution and a registered office address.

Once you have these documents ready you can submit them online or by post to Companies House.

How much does it cost to register a CIC?

To register a CIC it costs £27 if you register online via Companies House or £35 to register by post.

Running and regulating a CIC

Once you’ve set up a Community Interest Company (CIC), it’s important to understand how to run it properly.

CICs have specific rules to follow, including reporting requirements and how profit is managed.

These regulations help ensure that the business stays focused on its social mission while allowing room for business growth.

While a CIC aims to support the community, they can make a profit in order to achieve their social objectives.

CICs are required to use the majority of their profits to fund their social activities, however they can distribute a certain amount of shares to their directors as dividends.

The asset lock

The asset lock is in place to ensure a CIC uses its assets, such as land, property and income, to support their social cause and benefit the community, rather than for private gain.

The asset lock states that:

  • A CIC can only transfer assets at full market value, unless the transfer is to another CIC, charity or for community benefit. This includes selling goods, property, shares or making payments to staff and service providers.
  • If the CIC pays dividends to shareholders, they cannot exceed 35% of the company’s profits for the year.
  • If the CIC closes down, any remaining assets (after paying debts) must be given to another CIC, charity or asset-locked organization.

Reporting requirements for a CIC

Like all limited companies, Community Interest Companies must report their activities and finances each year.

Key reports include:

  • Community Interest Report – this is an annual report that details how the business has impacted its chosen cause, how profits have been used and how dividends have been paid (if applicable).
  • Annual accounts confirmation statement to Companies House.
  • Company tax return to HMRC
  • VAT and PAYE reports to HMRC if applicable.
Changing a CIC structure

As your CIC grows, your focus or operations may evolve. If you want to change the structure or activities of your CIC you’ll need to follow specific steps.

  • Purpose – to change the cause or activity your CIC supports you will need to get approval from the CIC Regulator.
  • Charity – To convert into a charity, a CIC will need to be dissolved and its assets will need to be transferred to a new charitable organisation.
  • Company – A CIC cannot convert into a standard limited company.
  • Close – If a CIC closes, its remaining assets must be transferred to another CIC, charity or asset-locked organization rather than being distributed to shareholders or directors.

Why choose a CIC structure?

If you want to run a business with a strong social purpose, a Community Interest Company (CIC) could be the perfect option.

CICs combine the flexibility of a business with the mission-driven focus of a charity, allowing you to trade, generate income and reinvest profits into a cause you care about.

Like any business model, a CIC structure comes with benefits and potential drawbacks:

Benefits of a CIC structure
  • A CIC is legally required to serve a cause, giving you a clear purpose and ensuring you are a trusted choice.
  • A CIC can trade like a business, for example selling products and services.
  • A CIC can have paid directors, giving you more control over operations.
  • You can access alternative funding options such as social investment loans and social enterprise grants that are unavailable to traditional businesses and charities.
Drawbacks of a CIC structure
  • Unlike charities, a CIC cannot claim Gift Aid or receive any tax breaks.
  • Funding can be trickier, with people traditionally opting to donate to charities over a CIC.
  • If a CIC has shareholders, dividend payments are capped at 35% of retained profits, meaning most earnings must be reinvested into the company’s mission.
Case study: Belu Water

Belu Water is a Community Interest Company. They sell bottled and filtered water as well as water filtration systems for offices and hospitality businesses. 100% of their profits are donated to Water Aid.

Is a CIC right for your social enterprise?

Choosing to set up a Community Interest Company (CIC) is a great way to combine running a business with having a lasting social impact.

With the flexibility to trade like a regular company while staying legally committed to benefiting the community, CICs can be the best of both worlds.

Although it’s worth remembering that CICs face limitations on tax benefits, strict regulations on profit distribution and require annual reporting to prove their social impact.

That said, consumers, investors, and communities are actively looking for and supporting businesses that create real change.

More people want to buy from, invest in and work for companies that prioritize social good, making now the perfect time to learn how to set up a CIC and get started.

Lucy Nixon profile
Lucy Nixon - content writer

With 10 years experience in the digital marketing industry, Lucy is a content writer specialising in ecommerce, website building and all things small business. Her passion is breaking down tricky topics into digestible and engaging content for readers. She's also committed to uncovering the best platforms, tools, and strategies, researching meticulously to providing hand-on tips and advice.

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Letterhead requirements: Legal procedures you need to follow

It’s easy to focus on design when creating business stationery but you also must adhere to the UK letterhead legal requirements. Here’s what to consider
Designing a letterhead
Written by lucy.nixon
Updated on 7 July 2025

When designing your company letterhead and order form you could be forgiven for solely concentrating on their design and the quality of paper they are printed on.

However, your company letterhead and order form need to follow several legal letterhead requirements. If you fail to implement these then hard work and vital cash will have been wasted.

Thankfully the requirements are simple when it comes to legal considerations for small businesses. However, they do vary by the type of business run.

Sole trader legal requirements

If you are registered as a sole trader you can trade under your own name or you can choose a different business name. If you choose a business name that is not your own name, you must include your own name and the business address on all letterheads and order forms.

Partnership legal requirements

If you are a partnership business your letterheads, order forms, receipts and even invoices must include the names of all partners and the address of the main office. If there are many partners then it is also acceptable to state where a list of partners may be found.

Limited company legal requirements

If your company is trading as a limited company the letterhead and order form stationery (whether printed or electronic versions) must include:

  • Your full registered company name
  • The company registration number and place of registration
  • The company registered address and the address of its place of business, if different
  • There is no need to include the names of the directors on the letterhead for a limited company, but if you choose to name directors all directors must be named

Most letterheads also include a telephone and fax number, a url for the business’ website and an email address.

Certain businesses must also state the following on their business letters and order forms:

For an investment company (as defined by section 266 of the Companies Act 1985) that it is such a company.

For a company exempt from using the word ‘limited’ in its name, that it is a limited company.

For a company with share capital, it is not necessary to state the share capital on stationery but if the company chooses to do so, the paid-up share capital rather than the authorised capital must be stated.

Charitable companies whose name excludes the words ‘charity’ or ‘charitable’ must state the fact that it is a charity on its stationery.

Specific industry legal requirements

In addition to all of the above, certain industries are required to provide further information. For instance, if your business is finance-related, you may need to state if you are a member of the Financial Conduct Authority. It’s worth checking with your industry trade body to ensure you aren’t missing anything crucial.

Failure to comply with any of the above requirements could lead to a penalty fine.

Want to find out how to create your company logo? Read more here…

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