Starting a new craft business can be exciting — but also confusing. If you’re a first-time business owner, you might have a lot of questions. What do you need to do from an official perspective to begin trading? How do you register for self assessment? Do you need a business licence to sell crafts?

We’ll begin this guide with a brief overview of how to start a business, and then we’ll talk about business licence requirements in the UK.

  • Set up your business in five steps
  • So I need a business licence to sell crafts?

Set up your business in five steps

If setting up a business sounds intimidating, don’t fret. Follow the five steps outlined below and you’ll soon get your venture off the ground. 

1) Write a business plan

Most successful entrepreneurs write business plans before they do anything else. In a nutshell, writing a business plan can help you understand your business better. In it, you’ll outline your financial strategy, explain your products and define your goals. 

Well-written business plans also help savvy startup owners get financial support. To learn more about business planning, read our helpful guide here.

2) Register your business

Next, you need to select a business structure. The majority of all businesses in the UK in 2020 — 59 percent, in fact — were sole proprietorships. During the same time period, a further 34 percent of businesses were limited companies, and roughly 7 percent were partnerships.

The right business structure for you will depend on your unique needs. You’ll need to register for self assessment with HMRC via the Government Gateway, and if you plan to create a limited company, you’ll need to register with Companies House, too. 

3) Calculate startup costs 

Writing the financial strategy section of a business can help you figure out how much money you need to launch your company. Some craft businesses don’t need very much investment; others require a lot of initial capital. Take equipment costs, rent, supplies, insurance premiums, shipping costs and other expenses into account.

4) Get a business licence

Some craft businesses need licences, while others don’t — and we’ll dive into that below. If you do need a business licence(or multiple licences), you’ll need to obtain it (or them) before you begin trading. 

5) Choose an accounting solution

As a self-employed person or limited company owner, you’ll need to track your business finances, calculate tax and pay tax to the government every year. A comprehensive accounting strategy can help you monitor outgoing expenses and your business’ overall financial health.

If you don’t have a complicated business structure, a Countingup business current account could fulfil most of your accounting needs. Countingup current accounts come with a Mastercard, and they include an integrated range of accounting tools.

Do I need a business licence to sell crafts?

Some craft ventures need business licences, while others don’t. Let’s unpack which businesses might need licences, and how business owners can get the licences they need.

Which businesses need a licence?

First, the good news: craft businesses don’t need a specific licence— in fact, there’s no such thing as a craft business licence. You will need to get licenced to do specific things at your business, though — and licensing laws depend on where you’re located in the UK.

Let’s begin with England and Wales. If you plan to employ young people aged between 13 and 16 in England or Wales, you’ll need a child work permit — and permission from the child’s parents. If you want to put a clapboard on the street to advertise your business in either country, you’ll need a pavement or street display licence. If you decide to sell your crafts at a market, you’ll have to get a market stall licence

In Scotland, things are a little different. You won’t have to get a child work permit to involve young people in your business, for example. There’s a Scotland-specific permission to use street or pavement space for displays licence, too. 

Northern Ireland licensing requirements are different again. If you want to display a sign on the road outside your business, you don’t need a licence to do that. You might still need to comply with local planning permission laws, though, so contact your local council before proceeding.

Some licence requirements apply to the whole of the UK. If you want to play background music in your shop, for instance, you have to get a licence to do so. If you plan to offer your customers in-house credit options for expensive items, you’ll need a Consumer Credit Licence.

How do I get a business licence?

Finding out which licences you need is easy. Simply visit GOV.UK’s licence finder, answer a few questions about your company and then indicate what you plan to do at your business. You can apply for many of the licences online. In England and Wales, child work permits are available from local councils.

Track your business finances with Countingup

As a brand new craft business owner, you’ll have plenty to do and a lot to keep track of. The Countingup app can make life easier by helping you manage your finances. When you sign up for a Countingup business current account, you’ll receive free accounting software with a range of time-saving tools. 

Simply log into the app to create and send invoices, get financial insights, and see income tax estimates. To find out more or sign up for a three-month free trial, click here.