Good morning!
My friend has around £1 Million so far to start up...
Thats quite an impressive amount of starting capital! Keep in mind that you don't have to buy your aeroplane(s) with that money, you only have to pay the leasing rates. Expect something like 1-2 percent of the aeroplane value per month.
Plan to use a substantial amount of of your starting capital for publicity. Before you have not spent at least 100.000 Pounds, no one will even know that your company exists. Always allocate monthly funds for publicity. Even if you really find your own littly niche, you will always have to face a lot of competition. And once the competition has found out about you and your niche, they will start aiming at your customers offering better aeroplanes at lower prices for the same service. If they are big enough, they will push you out of the market in no time, especially if you neglect your own publicity efforts (learnt this the hard way myself).
Do not underestimate the time it takes to get an EU-OPS operating license for a startup business. A year passes like nothing! And you need to have access to an aeroplane all that time (and pay the associated bills), because without an aeroplane, you cannot apply for the license. Get in touch with your CAA as soon as you can (today!) and listen to their advice. Also, you need qualified (!) postholders for your operation. Again, ask your authority how many posts can be held by a single physical person. You may have to pay all those people during the idle time that it takes you to be issued your operating license. You will need to have access to instructors and examiners (class rating or type rating depending on the aeroplane) for every type of aeroplane that you have. This fact alone may exclude some exotic types from your list... (e.g. how many MU2 examiners are there in the UK? And are they willing (and allowed) to co-operate with your company, that might be in competition with their usual employer? How much do they charge for a checkride? How much will it cost to fly them in and put them up in a hotel? I know these things from my Metroliner days, believe me...)
Just to check that im not totally wrong on something its is correct that in the UK an EU no single engine aircraft is allowed to fly at night VFR or IFR for a commercial operation which would include for example a C208B?
Yes, this is correct. I don't exactly know about night VFR (that might differ between variuos contries), but SE IFR commercial is definitely a no-no all over Europe. In my country (don't know about the UK), SE commercial operations are not EU-OPS regulated, but like other forms of aerial work they are under the authority of local aviation administrations instead. Therefore, the plan to start with a single engine operation and add larger aircraft once it is up and running does not work here, because there are totally different authorities involved. Again, that might be different in the UK, though.
I have heard that the BN2T will not climb on single engine...
I have flown quite a bit on multi-engine piston aeroplanes (still do as an instructor) and believe me: The only place where an MEP will climb on one engine at MTOM is inside the publicity leaflet of its manufacturer. Any Part 23 MEP at least. All of them. Because Part 23 does not require specific climb rates/gradients on one engine, but simply "positive" climbing capability. And obviously 0.01ft/min is positive enough for certification.
I for myself (after the third egine failure) have sworn that I will never ever again fly commercially with a piston aeroplane. I will never allow my wife or son to get on board a commercially operated piston eroplane. With no exception whatsoever. (Instructing is different because you do not fly at MTOM, therefore you have some reserves for single-engine operation - which is still marginal however!)
...carrying capacity of 7 pax and 1 pilot and its ability to land and take of on short strips...
Twin Otter. Do228. But only with two pilots please.
Good luck,
Max