The Basics Your Business Needs.... 

aka. How to set up a legally compliant business?

Date: 22nd May 2024Average Read Time: 5 mins

There is a lot of information online and a lot of things to think about when you’re starting a business… 


It can be really confusing to know what you do and don’t need to set up your business properly. After starting a few different businesses, I have become pretty familiar with what you definitely do need which is why I have written this post to help you. 


It doesn’t matter what type of business you are running or whether you are running your business as a sole trader or limited company, there are certain things which all businesses need in order to make sure they are set up properly.


Here is my checklist of 5 things that every business needs to be considered properly set up & legally compliant:

1. GDPR Compliance (which include ICO registration if a UK business)

As a business owner, you will be collecting personal details which means you need to comply with any applicable privacy laws in order to protect the personal information and privacy of your customers and employees. 
These laws are different for every country but for any businesses (or sole traders/individuals) working with customers &/or employees in the UK, this means complying with General Data Protection Regulation (GDPR). 
As part of this, any UK based business that processes the personal data of individuals based in the UK must register with the Information Commissioner's Office (ICO) as they are the supervisory body that enforces GDPR in the UK. 
The ICO will want to see that your business has certain processes in place to demonstrate you are obtaining, handling and storing personal data in accordance with UK guidelines. It only costs £40 per year to register with the ICO but failing to do this or comply with this legal requirement, can result in a fine ranging from £400 to £4,000 and legal action!

2. Business Policies

As explained in the point above, you will need to abide by certain legislation when it comes to particular aspects of your business. This includes having certain legal policies in place to outline to your customers how you are doing certain things…. 
There are lots of different policies that businesses can have & the most common include a privacy policy, cookie policy, employment policy, code of conduct policy, health & safety policy, and environmental policy. The only policy you will need to legally create is a privacy policy and potentially a cookie policy. 
As I explained above, the General Data Protection Regulation (GDPR) requires all businesses that process the personal data of individuals located in the UK to have a privacy policy. As a result, it is a legal requirement for any businesses in the UK to have a privacy policy in order to comply with GDPR if your business collects personal information (which it will if it’s serving any customers or employs any staff). 
A privacy policy is essentially a document which outlines to your customers how you handle their personal details (even if you don’t have a website this policy should be readily available to all customers you work with). 
A cookie policy is another policy that is legally required for any business owner with a website. Again, this should be readily available on your website for your customers (& anyone using your website) to see how you are using cookies (which you probably will be even if you aren’t sure exactly what they are).

3. Terms & Conditions

As a business owner it isn’t a legal requirement to have these in place but it is definitely best practice (you’ll struggle to find a professionally-run business which doesn’t have them). Terms & conditions are essentially a document outlining the contract between yourself & your customers. 
It provides both yourself and your customers with a clear outline of your rights & responsibilities, ensuring that your business and your customers are protected in the event one party doesn’t fulfil their obligation(s). The transparency that your terms & conditions provide is really important when it comes to managing customers expectations & it reduces the risk of disputes. 

4. Business Insurance

It can be a legal requirement for a business to have insurance, depending on what type of work the business does. For example, businesses based in the UK that have employees (with employment contracts) are legally required to have employers' liability insurance. Likewise in the UK, public liability insurance is a legal requirement for businesses that operate in certain industries, such as construction, manufacturing and retail. 
If you’re unsure whether or not a specific insurance is a legal requirement in your country, you should contact your local government or insurance company. 
As most insurance covers are optional, insurance is often regarded as unnecessary. However, it can save you and your business from difficult financial situations in the event someone makes a claim against you. For this reason as a minimum I would recommend you strongly consider having professional indemnity +/- public liability insurance to protect yourself and your business!

5. Industry Specific Regulation & Compliance

As a business owner you may need to hold additional qualifications, permits, licences, registrations or memberships in order to comply with any applicable industry regulations and run a compliant business. These will depend on the industry & nature of your business. These additional regulations are set out by professional regulators that govern your industry. 
For example, a personal trainer is required to have a level three personal training qualification if they’re working in-person or as an online/hybrid coach. It is illegal to run a business that does not comply with any applicable industry regulations. I strongly advise that you do not just copy what someone else is doing in the same industry as you and assume that they are correct, take time to research what you need yourself.

It might feel like this is a long list of things that your business needs to have but it is essential you have these basics in place to protect yourself & your customers.


It will take some time to get them in place but the time invested will be worth it especially when it comes to being faced with legal action for not running a compliant business. It also helps to demonstrate to your customers that you are running your business professionally, with their interests at the forefront of your mind. 


I really wouldn’t advise anyone to start trading without these things in place. 


It is possible to set up and get all of these different things in place yourself, you do not need to get companies to do it for you & you don’t need to get solicitors to write your policies from scratch. 


Just send me an email (elle@gabrielletodd.com) if you would like any more specific help with setting up your own business.


Did you know? You can join me on the Business Idea Incubator programme where over the course of 6 weeks you will learn how to go from “no idea” to setting up your business in the most effective & efficient way possible. I will cover the different steps you need to take to launch your business & start serving your first-customers without breaking yourself or the bank. Learn more about the programme here. 

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