On average, about six out of ten businesses make it to the 5-year mark. This means 40% of businesses do not survive more than 5 years.  To help maximize the chances that your new business will keep thriving long after this period, a company formation expert at Your Company Formations UK shares key tips to create a sustainable business.

Choose future-proof sectors

There are many sectors you can choose to do business in. However, not all are viable and some offer better sustainability than others. Market trends are strong determining factors that influence the survival rates of newly created companies. Businesses in commerce, accommodation, catering, and real estate have the lowest rate of sustainability. On the other hand, businesses in the transport, warehousing, education, and health sectors enjoy better longevity.

Improve and fine-tune your business plan

Careful development of your business concept is crucial. Here you must make sure that there is a demand for your product/service. It is important that you conduct a market trial to test your product before launching it.

Build a competent team

Your team will have a huge influence on the success or failure of the business project. Each team member must be competent in their respective position. Team members must also be compatible with each other to promote collaboration and teamwork. Everyone must share a similar vision and work towards common goals.

Secure funding

Underestimating the need for financing is one of the main causes of young companies going under. For a company to be sustainable, it must have sufficient funds to operate (settling its suppliers, paying employees, taxes, etc.). The need for financing covers not only the initial capital but also the short-term financial needs generated from the day-to-day business activities.

Choose a suitable company structure

Company structure options in the UK are numerous. Options include Sole proprietorships, Partnerships, Public limited companies (PLC), Private companies limited by shares (LTD), Companies limited by guarantee, Unlimited Companies (Unltd), Limited liability partnerships (LLP), and Community interest companies. Keep in mind that limited liability companies are almost twice as likely to be in operation 5 years after their creation than sole proprietorships.

Find an ideal UK business address

The address of the company plays a major role in its sustainability and growth. In the majority of cases, it goes a long way in helping to strengthen the business’s brand image and add a touch of professionalism that will inspire confidence and trust in customers and investors. According to experts, the best business addresses any business in the UK can have is in Central London. An EC1 address on your company website or business card will make a powerful first impression and communicate that you are a competent, trustworthy business that is to be taken seriously.

Get expert help starting a sustainable UK business today

If you are an aspiring entrepreneur looking to start a sustainable business in the UK, please get in touch with the friendly team at Your Company Formations today.