Looking for small business ideas in UK you can start with little capital? Here is a guide that covers everything you need to know about the process. We also wrote about small business ideas in Norway, Cyprus, Cayman Island, Netherlands, Denmark and Italy.
The United Kingdom with its capital and largest city of London, is a financial Centre with over 14 million. The United Kingdom has the world’s sixth-largest economy. It is one of the world’s great powers, with significant cultural, scientific, technological and political influence worldwide.
What We Covered In This Article
How easy is it to start a business in the United Kingdom?
According to the survey done by the US News and World Report, the UK is the fourth-best country worldwide for entrepreneurs.
It can be daunting to start a new business anywhere globally, but about half a million new businesses start each year in the UK. These businesses are currently operating successfully and profitably, thus testifying how easy starting a business in the UK is. UK do require businesses to register, you can do this yourself through the government portal or contact a company formation agent to do so on your behalf for a fee
Is the United Kingdom a good business place?
In the 2020 Ease of Doing Business Report, the United Kingdom ranked eighth among 190 economies.
The UK is the fifth biggest economy in the world. It is a significant destination for foreign direct investment in Europe. Their legal system, language, time zone and funding environment make the UK one of the best places in the world for business start-ups.
How can a foreigner start a business in the United Kingdom?
Below are the steps required for foreigners who want to start a business in the UK
Get a UK visa
Before foreigners start a business in the UK, they must apply for a visa. It is essential to do so and apply for the correct visa.
There are two types of visas for entrepreneurs who want to start a business in the UK. They are the Innovator visa and the Start-Up visa.
Write your business plan.
Any entrepreneur who wants to start a business in the UK must have a business plan. It will ascertain if the company can flourish and be viable.
Choose your business structure.
Deciding on the business structure that best represents your start-up business is necessary.
There are four types of business structures in the UK. They are listed below;
- Sole Trader
- Partnership
- Limited Company
- Limited Liability Partnership
The business structure you select will affect various facets of your new business, such as the taxation, profits, and the quantity of administrative work.
Choose a company name and address.
Not all companies have to register their names, but this will stop others from trading under the name. Your business name must be unique and different from already existing names. You also need a business address to register your business in the UK for tax purposes and correspondence.
Register with HM Revenue and Customs
You must register your UK business with the HMRC for tax purposes.
To do this, you need to have a director and shareholders, along with the memorandum and articles of association.
Business ideas to start in the United Kingdom without capital
Most people worldwide are keen to start a business, but the cost of start-up capital discourages them from doing this. This part will highlight cheap and small-scale businesses anyone can start in the United Kingdom without money.
E-commerce store
The eCommerce market will rise to almost $6 trillion this year by 2022. Most people take advantage of how cheap and affordable this business fits entrepreneurs.
An E-commerce store is a business that will be profitable in the UK because retail and online shopping is currently among the top promising sectors in the UK. As of December 2021, the sales values of retail shops in the UK were above $55 billion.
There are many e-commerce platforms available to sellers. Some allow users to pay after a trial period, while others collect the fee percentage of the sales. Setting up an e-commerce store is as low as £5, depending on the platform.
Dropshipping
Drop shopping is another opportunity for people who want to start a retail business but have no money for storage, shipping, and logistics.
This business allows sellers to contact a supplier with a fixed price for the product.
Sellers can advertise the products at any price of their choice.
When someone orders a product, the seller sends the customer’s contact information and address to the supplier, who will ship the product to the customer.
Dropshipping is a business anyone can easily start in the UK because it doesn’t involve renting space or incurring expenses.
Cleaning business
A 2021 report from the British Cleaning Council showed that the cleaning sector in the UK contributes over £55 billion to the economy yearly.
The cleaning business is on the rise, and it’s a cheap business anyone can start in the United Kingdom. There is no need to buy equipment when starting, and many offices and homes have this equipment already. All you need is the skills and dedication.
Franchise opportunities in the United Kingdom
CAFE2U
Cafe2U is a top-notch mobile coffee franchise in the UK with over 200 franchisees worldwide specialising in distributing fresh espresso coffee and quality meals businesses and functions.
Anyone who wants to buy a Cafe2U franchise will partake in a four-week training program to ensure the business gets off to a good start.
The franchise fee is £20,950 plus tax, including territory licence, training, and marketing pack.
The Cafe2U van and other equipment cost £49,950 and can be paid between 3 and 5 years.
OSCAR PET FOODS
Oscar Petfoods is a pet care service franchise that provides home delivery for customers with nutritious pet foods, toys, accessories and health care products.
The minimum price of the franchise is £9,000, excluding other expenses.
Anyone who decides to buy an OSCAR franchise will enjoy the following;
- Simple training from experienced mentors.
- Accreditation from Companion Animal Nutrition Course.
- Corporate outfits and equipment.
- Online access to marketing tools and PR system
- Online discussion forum
Websites to find businesses for sale in the United Kingdom
RIGHTBIZ
Rightbiz was established in 2006 for business owners who needed to sell their business and connect to the ideal buyer.
With over 5000 locations and businesses worth more than £10 billion, Rightbiz is the best website and online marketplace to find and invest in companies for sale in the UK.
Since many buyers and sellers face different issues in the process of buying or selling a business, for this reason, Rightbiz offers a seamless transaction without hidden fees or hassles.
HILTON SMYTHE
Established in 2011, Hilton Smythe has enabled thousands of people to buy and sell businesses all over the UK.
Their website is one of the top business brokers in the United Kingdom that people know for excellent customer service and success rates.
They help clients get the best prices and deals when dealing with various commercial enterprises and have a committed team of specialists to help with all the financing for the business.
CHRISTIE & Co
Christie and co are the leading advisors for buying and selling businesses in sectors such as hotels, restaurants, health and medicine, convenience retail, leisure and tourism.
If you want to buy or sell a business in the UK’s top sectors, Christie and Co provide expert advice and collaboration to help you achieve your objectives.
Clients can access a well-managed network of potential buyers on the website.
Tech business opportunities in the United Kingdom
Telehealth and Virtual Medical Services
Virtual medical services have emphasised one aspect of the COVID-19 pandemic. Many tech companies are actively trying to merge technology and healthcare services. Many hospitals are also trying to improve their online services and offer healthcare to people from a distance. Anyone with knowledge of apps and websites can start a tech business focused on providing services to
EdTech Startup
Education technology start-up businesses are high in demand in the UK. The value has gone up to $12 billion in 2021
The cause of this development is the increase in online learning, which uses tools like educational apps, websites, games and resources.
Creating and selling these tools and resources can mean a high-profit turnout in the UK.
Many schools and academic centres are in a hurry to meet up with the online educational experience, so this can be a way to secure funds for them and tech entrepreneurs.
Financial technology
Financial technology aims to eradicate the usual financial services.
Every new fintech company tries to outdo the previous one with a unique service by achieving a higher milestone than those before it has not succeeded.
The use of cryptocurrency has made fintech more popular.
Investors in the UK are looking for Fintech business ideas for start-ups to invest in as shareholders or buy off.
Fintech offers many business opportunities to anyone who wants to start a tech business in the UK.
Benefits of doing business in the United Kingdom
Before starting a business, knowing if the company will thrive and if the environment will be conducive to the industry in any country is essential.
For anyone interested, below are some benefits of doing business in the United Kingdom:
Ease of Doing Business
The UK is a top ten country on the ease of making business list
Any business owner can testify to the number of opportunities in its primary industries like healthcare, manufacturing, tourism, and information technology. One factor that causes this is the absence of limitations the UK government has for entrepreneurs who want to start a business which is uncommon in many other countries.
Taxation System
Taxes can be an entrepreneur’s worst enemy, so it is necessary to understand the taxation system in a country before starting a business there.
Thankfully the United Kingdom has a low corporation tax rate, under a simple tax system, double taxation agreements with other countries, and Value Added Tax on goods and services.
Skilled Employees
With over 30 million workforces, the United Kingdom is home to many skilled workers. It is likely the only European country estimated to have a significant increase in labour supply in the coming years.
Labour cost is relatively low in the UK compared to the rates in other European countries.
Infrastructure for Business
For a business to grow and succeed, it needs robust infrastructure, and there is no better place to find that than in the UK.
Many infrastructural upgrades have been ongoing in sectors like Transportation, Energy, etc.
Currently, the UK has the most extensive air transportation system in Europe. Alongside the energy grid, high-quality road and rail systems, and over a hundred seaports.
Time zone
One issue common to many businesses around the globe is the time difference. Most have staff in various parts of the world, so the time difference can hinder communication and productivity.
But businesses in the UK face no such issue because they use a central time zone. For this reason, it is easier to host meetings and communicate with clients and employees without the obstacle of time difference.
Challenges of starting a business in the United Kingdom
There are also challenges that anyone who wants to start a business in the UK will encounter. Below are some of these challenges;
Business Registration
Registering a business in the UK can be slow compared to some countries. The introductory part of business registration in the UK is two days, but other essential things must be done afterwards, such as tax registration with the HMRC, which can take up to eighteen days.
Electricity
Another challenge when starting a new business in the UK is getting electricity to your business location. It can be a long and challenging process. Usually, the UK Power Networks takes care of the electrical connection of new buildings, but this process can last 50 days.
The business owner will have to submit the necessary documents while they would inspect the facility and make the connection.
Loans and Credit
The UK ranks 37th in the World Bank Doing Business 2020 report for ease of getting credit. The robust financial sector and diversified nature of acquiring credit give start-ups and developed businesses good access to needed funds. However, knowing which type of credit will suit which company is a daunting task that often requires assistance.
Taxation system
The process of tax registration and tax payment in the UK can be daunting to new business owners. This process can take like four days to finish the necessary tax payments. For this reason, many people use the local council tax support to pay their taxes.
Cultural differences
Many people are hesitant to do business with the British because of their reserved or standoffish personality. It can be a problem because both parties need time to get used to and understand each other, which delays decision-making.
30 profitable small business ideas in the United Kingdom
Here is a list of profitable small business ideas from these sectors in the United Kingdom.
1. Street Food Stall
Festivals in the UK are responsible for a high quarter of the country’s revenue, so it is best to take advantage of this by starting a street food stall in the UK.
This business allows you to be close to the customers and not spend too much on renting a property.
To start a street food stall business in the UK, you don’t need to have any particular degrees aside from an avid interest in cooking and the ability to bear the long hours.
Instead of building any structure, a mobile van or trailer will be sufficient for a street food stall costing around £3000.
2. Affiliate Marketing
Affiliate marketing works based on commission. This commission is paid per the traffic a person can generate to a merchant’s website.
This traffic increases the sales for the merchants of the brands’ websites.
You can start this business in the UK and be sure of not spending money on anything except for those who want to do paid advertising.
Although the business can seem risky because payment depends on your marketing accomplishments, such as the number of sales your link generated and the resulting commission.
3. Make and Sell Handmade items.
This business is for people who have a knack for creativity and art. You can start selling your handmade items on e-commerce sites like Etsy without breaking the bank.
Or you can also use Facebook and Instagram as your marketplace, where you can advertise your craft and meet your buyers.
The cost of starting this business is not expensive, but it can depend on the type of product you decide to make.
4. Sell digital product
The year is 2022, the world has gone digital, and the best assets are digital products.
Everybody prefers the digital version, from books to manuals to clothes, for many reasons.
Making Digital products is cheap because you don’t need to buy production materials. Therefore, digital products can be more affordable for the seller and buyer, who don’t have to pay for shopping.
Below are examples of digital products you can sell in the UK;
Templates; emails, blogs, resumes, planners, etc
Recipes
Ebooks
Music playlists
Logos, etc
5. Stock photos sales
Since platforms like Canva, Pexels and others became popular, people have noticed the similarities in images they see on blogs and websites.
Most people search for original photos they can use to make their blog or brand look unique.
Anyone with good photography skills can create and sell stock photos in the UK to platforms like Canva, individuals, or companies.
To succeed in this business, one must be conscious of the trends and likes of the public using social media.
6. Bed-and-breakfast business
The United Kingdom is a top tourism and business location, so travellers will need where to eat and sleep and feel at home.
Bed and breakfasts always have a charming, homely ambience, unlike hotels and other temporary accommodation.
The bed and breakfast industry is valued at more than $3 billion, and it is a good business idea for anyone who wants to enter the tourism sector.
If you want to start this business, space must accommodate the travellers and make them feel comfortable. The more rooms you have, the greater the income potential.
7. Souvenir shop
Over the next three years, the souvenir market in the UK is expected to reach a value of $12 billion.
Tourists don’t want to return home without buying souvenirs for their families and friends.
If the part of the United Kingdom you live in is in an area rich in history and culture, then you should consider opening up a souvenir shop with products from other artisans.
One form for such sales is Etsy; you can also approach tourist servicers like your guides, restaurants and hotels to have your products around where travellers can easily see them and be attracted.
8. Cooking Classes
People who love cooking enjoy learning new meals and knowing how to prepare them.
If you live cooking and know about different recipes, you can start a cooking Class, teaching recipes from your country.
Your cooking classes can be limited to travellers and visitors who want to learn about the types of food in the UK to prepare them when they return to their countries.
Medical transport
To start a medical transport business in the UK, you need to have a vehicle or a van, your driver’s license with other necessary driving papers and a good driving record.
Those with medical credentials can start a medical transport business after getting a contract from hospitals that must transport patients to other medical facilities for treatment. The van must be equipped with equipment like oxygen and provision for transporting patients in a wheelchair.
9. Water transportation
Another lucrative transport business is water transport. Although the business might be seasonal, it is promising because, during the boating season, everyone wants to be on the water on boat cruises and trips.
There are different kinds of boats for various purposes, so you need to decide the one you prefer that suits your business needs.
The start-up capital for boat transportation is not very expensive but also higher than some might expect.
You also need liability insurance for the boats you transport if there is an accident or misfortune.
10. Moving van business
Starting a moving van business in the UK is relatively straightforward.
The Start-up capital includes the cost of buying one or more trucks in different sizes to accommodate the number of properties people want to move and parking space for when there is no moving.
Although many young people are entering this business, you have to set yourself apart by being professional and offering other services that will make customers prefer to patronise your business.
11. Computer Repair
To be a computer repair specialist, you must understand computer systems and their programming.
Many businesses need a computer repair technician to fix and replace their computer hardware and software.
They don’t have these individuals on payroll so you can run a computer repair business from your home as a freelancer.
As a freelance computer repair technician, you must go to the business office or home to do the repairs. You can also offer other computer services like security and anti-malware setup etc.
12. Desktop Publishing
A person with computer skills, creativity, and an understanding of graphics can start a desktop publishing home business in the UK.
Desktop publishers can get paid after performing tasks such as producing magazines, books, brochures, designing graphics, logos, etc.
There are services that Many online entrepreneurs need help with their brands. Or you can also work for individuals who want to design gift items like photo calendars and invitations.
13. IT consultant
An IT consultant can be a freelancer or an agency that a company hires to ensure their software and other technologies are in working order so their productivity won’t reduce.
The job of the IT consultant is to suggest and enforce changes to improve productivity.
An IT consultant agency will do a profitable business in the UK because the country has a lot of modern enterprises that need technology to ensure things are running perfectly.
14. HR consulting
Human resources consultants are people who support businesses by providing employees with hiring and training, retaining satisfaction, and resolving conflict. Sometimes people in this consulting line are also brought on to recruit or hire new employees.
Although it depends on the company, the requirement to start and finish this job can vary from place to place. Educational background is not needed in some areas, while in others, you need accreditation from specific organisations.
You can obtain some of these through online courses.
15. Financial consulting
Another profitable business in the UK is financial consulting. Here you can assist companies in managing their finances effectively.
Some small businesses that don’t have the budget to hire a full-time finance manager will need a freelance financial consultant to Take over the role.
While more significant enterprises might need outside financial advice to direct them on the right path.
The financial consulting business needs someone with a finance foundation like a Bachelor’s or Master’s in finance, or the person can have a CFA accreditation.
16. Automobile Spraying Workshop
Everyone wants their cars to look elegant and different. Most of them go for automobile spraying services, making the vehicle stand out from the common ones.
Therefore, if you like automobiles and want to do a business in the automobile industry, starting a spraying and branding workshop may be an excellent choice!
17. Vehicle Restoration Business
The restoration of old vehicles is not very common because of a scarcity of skilled workers.
You can start a car restoration business in the UK alongside other related services.
Those ancient types of cars are now in vogue for various events, festivals, fashion shows, photoshoots, etc.
If you know cars and their repairs, you can start this business and be sure of getting customers.
18. Healthcare Mobile Apps Development
Developing healthcare apps would be wise if you want to start a high-income-earning business in the UK.
Mobile apps are being used today by patients, doctors and specialists for virtual consultations and online drug delivery, which is more popular than in-person visits.
You can either build a healthcare app or outsource it to a reputable mobile app development agency. Or, you can deliver mobile app development services to hospitals and healthcare centres.
19. Online Healthcare Insurance Agency
People don’t have plenty of information about health and insurance. There are various health insurance organisations in the world. Many of them are confusing because they have a lot of features.
So you can start this business by selling and advertising health insurance plans with excellent and unique features.
You can also educate people on various plans and health insurance so they would pick one that is suitable for them.
20. Medical Records Management
No matter the size of a healthcare centre, preserving its medical records is challenging.
If you are a skilled software engineer and can build healthcare inventory management software, you can sell this invention to hospitals, medical labs, and other health practitioners.
The other way to do this business is by becoming an agent and providing medical records management or some training to aid their staff in managing their medical records.
21. Construction site management
There are many things involved in successfully running a construction site, and construction companies usually need to hire help to manage and keep the job moving on schedule.
If you are skilled in construction management, you can offer to survey lands and evaluate them before building starts.
You can also manage the logistics of materials being delivered to the construction site so that all the materials arrive on time.
22. Construction cleaning business
Building construction can be very messy, and if you can clean up after yourself and others, this is a good business opportunity to start in the United Kingdom.
There are several cleaning services you can offer to construction companies. You can provide daily cleaning to remove the debris at the end of each day—or you can give those services to just completed buildings to prepare them for incoming residents.
23. Construction supply
Construction companies need building materials; starting a construction supply business is a high-earning income in the United Kingdom.
You have to decide on the construction companies to sell raw materials to. Some construction materials are roofing, bathroom tiles, slabs for the outdoor verandah, gravel, sharp sands, cement, construction equipment etc.
24. Gift Shop
A gift shop sells gifts such as greeting cards, flowers and souvenirs. It is a comprehensive business that sells portable goods as gifts at all kinds of gift items at all seasons of the year.
These gift items are usually packaged collectively and are bought by customers during seasonal periods.
25. Start an Ecofriendly clothing line.
Eco-friendly clothing is the most expanding sector in the UK under sustainable fashion, growing 11.6% yearly.
Reports have shown that these fashion brands have amplified consumers’ awareness of the environmental issues in clothing production.
This awareness has brought a great opportunity for small businesses new to the sustainable clothing by selling recycled clothing. You can start an eco-friendly clothing line in the UK, especially for baby clothing or set up an online store for other recycled wear.
26. Recycling business
Electronic waste is now the fastest-growing waste stream in the world.
The Shift Project report shows that most e-waste isn’t properly recycled, and the UK will soon become the highest European producer of e-waste in Europe by 2024.
This field is not as common as others, so it can be a profitable business to start in the UK.
Entrepreneurs can go into recycling, refurbishing, and reselling waste after researching more about the business.
27. Vegan restaurant/stand
Vegan restaurants and stands are becoming popular because of the increase in vegan eaters. Health education has made people aware of what they ingest and how it affects their health, so there is a demand for more restaurants that cater to vegetarians.
Although there are many vegan restaurants in the United Kingdom, you can create your vegan recipes by tweaking existing cuisines if you are a good cook.
28. Conference room rentals
Businesses need conference rooms for business meetings and seminars. Sometimes they have no space to do this in their company’s building, so they look for a space to rent.
Suppose you have a property in the United Kingdom. In that case, you can renovate it into a meeting space for the rental business or collaborate with building owners to design the space for renting out to businesses and event organisers, giving them a small cut for letting you use the location.
29. Proofreading services
Proofreaders have a good grasp of language, grammar, and structure. It is necessary to edit and proofread written content before printing or posting. You can start this business in the UK with a good grasp of grammar and language. Proofreaders can earn around €30 for a 1,000 words article or content. There is also no need for any capital as it is free to start a proofreading service, although you might have to pay for an editing app like Grammarly.
30. Vinyl Cutting Business