Thinking of starting a business?

Hospitality Hub > Starting Out

It can be a real minefield to navigate when you’re considering starting a business but it doesn’t need to be. There are some things you MUST do and others are optional.

Sole Trader vs Limited Company: Pros & Cons

Choosing the right structure for your business affects everything from tax and liability to how you’re perceived by clients. Here’s a quick comparison:

Sole Trader


Pros:

  • Simple and inexpensive to set up

  • Fewer reporting requirements

  • Full control and access to profits

Cons:

  • Personally liable for business debts

  • May pay more tax as profits increase

  • Can appear less credible to larger clients

Limited Company

Pros:

  • Limited liability – your personal assets are protected

  • Potentially more tax-efficient

  • Often seen as more professional and established

Cons:

  • More admin and regulatory responsibilities

  • Annual accounts must be filed with Companies House

  • Profits aren’t immediately accessible – they belong to the company

There are also other structures that may be better suited to your needs but sole trade and limited company are the most common set-up.

Practicalities

Running a hospitality business involves more than great service — there are essential practicalities to get right to stay compliant and protected. Key considerations include:

  • Public liability insurance – protects you if a guest is injured or their property is damaged.

  • Employers’ liability insurance – legally required if you employ staff.

  • Food hygiene certification – needed if you prepare or serve food; inspections are carried out by the local authority.

  • Premises licence – required to sell alcohol, provide entertainment, or serve hot food and drink late at night.

  • Health and safety compliance – includes risk assessments, staff training, and maintaining a safe environment.

  • Music licences (PPL/PRS) – if you play recorded or live music on-site.

Getting these essentials in place helps build trust with customers and avoid costly legal issues.

Suitable Premises

Choosing the right premises is more than just finding a space with a kitchen. You’ll need to:

  • Check planning permission – not all commercial units can be used for food.

  • Destination or passing trade – make sure the site offers the visibility you need from footfall

  • Speak to the council early – Environmental Health, Planning and Building Control all have a say.

  • Ensure the layout works – you’ll need separate handwashing and prep areas, good ventilation, and proper waste storage.

  • Register your premises – this must be done at least 28 days before trading.

  • NEGOTIATE! – leasing a commercial premises isn’t like renting a house. You can and SHOULD negotiate a rent-free period to get you set up while you’re moving in and getting the business fine-tuned

  • Legal advice – a solicitor isn’t a legal requirement - but pinching the pennies here could cost you far more in the long run.

If your setup includes seating, be aware it could affect your VAT position. Not sure what qualifies? Ask us.

Got questions? Book a FREE 30 minute call

Payroll & Tronc: Getting It Right

Payroll in hospitality can be complex, especially with variable hours, seasonal staff, and tips to manage.

Key areas to consider:

  • Weekly/monthly payroll – including zero-hour and part-time contracts

  • Real-Time Information (RTI) submissions to HMRC

  • Statutory pay calculations (e.g. sick pay, holiday pay, parental leave)

  • Pension auto-enrolment setup and compliance

  • Tronc scheme setup and management – for fairly distributing tips while remaining tax-efficient

  • P45s, P60s, and payslips issued promptly and correctly

Managing staff pay and tips correctly builds trust and protects your business.