mad1 Posted January 29, 2013 Report Share Posted January 29, 2013 Hi all the job I am doing is offering redundancys .. Question is how much work is involved in starting my own business prob with a small unit .. I want to go about it the right way rather than just jumping in with both feet and realising there's more involved than I thought ! Yes I will obviously go seek help when the time comes but I was just putting the question out there to those who work for them selves is there any grants or aid avail ?? Many thanks Quote Link to comment Share on other sites More sharing options...
castletyne Posted January 29, 2013 Report Share Posted January 29, 2013 I did it 20 year ago and have never looked back now have 2 high street shops There nothing to it just register with the tax man If your looking at unit I would try get it on a short lease to start with Quote Link to comment Share on other sites More sharing options...
Chr15j Posted January 29, 2013 Report Share Posted January 29, 2013 Tax tax tax tax tax! Open a notice account and put a % or each months takings in there (say 20%) this forced saving will mean no nasty surprises. also beware of year 2 tax liability as you will also pay 1/2 as must again on account for year 3 (ouch) Good luck. Quote Link to comment Share on other sites More sharing options...
kenj Posted January 29, 2013 Report Share Posted January 29, 2013 I started my own business during the 80's recession under Maggie, when my whole company was closed, having started as an apprentice. I don't know what you intend to do, but the best advice I received was to find a good accountant. I asked around and found a young accountant just starting out, who was happy to listen to my idea for the business and even helped me with a name. I started as a sole trader from home, building the business to a small factory unit, then to much larger premises with a dozen workers. I was lucky, being able to build on my work experience and contacts. I had two young children and a big mortgage and some people thought I was crazy taking a chance, but it worked for me for 27 years. Good Luck and follow your dream. If it doesn't work out, you can always get a job. http://www.urbanfieldsportsman.com/ Quote Link to comment Share on other sites More sharing options...
UGM Posted January 29, 2013 Report Share Posted January 29, 2013 Consider making any business a Limited Company and pay yourself a wage. Then the business will pay tax on profits and whatever's left goes to the shareholders. Possibly you and your wife. Also it can mean if the business fails your house is safe. A sole trader can lose the heap if they go under. Quite often I hear that you don't need to pay tax in the first year but if you make a profit then that means you must pay tax. Also if you put your redundancy money into a business you can make it a Director Loan to the business and get the money back over 3-5 years. Anything you purchase either get it on finance or using the money from the Directors loan. I think its done on % allowance per year. But it's been a while since I had to do it. I bought a van and borrowed the money of my dad. I paid him back in the first year, yet the tax relief on the van was only 50% at the time. I believe it changed to 25% after that. So I paid £3,500 and was only allowed tax relief on £1750 and had to pay tax on the other £1750 and then get relief on that over the following 2 years. Best bet is to get advice from a good accountant. Another thing is that if you buy a vehicle for the business then you may get hit for personal usage. The way my best mate does it is he claims a mileage allowance on his personal vehicle to pay towards his car costs. He also is a limited company and has his mother as a director and pays himself a wage and then I think the business pays 12% tax on profits. Which he then gets what's remaining. Another suggestion I would make is start small scale. Don't get a big fancy unit, or brand spanking state of the art machinery/tools. Get good bargains, buy second hand if you can and buy smaller machines that may not be just as good as what you are used to but get the job done for a fraction of the cost. Once you get going and are getting enough regular business and then you can justify the necessary expense in something state of the art. You need to consider how much of a return each thing is going to make you on your initial investment. No point buy 10 grands worth of machinery and only making 10 grand from it. You will have no excess to pay rent, rates, electric, phone/Internet, insurance, wages accountants fees etc. whereas 5grand on machinery means you have 5grand to go towards those other bills. If you need to use suppliers try to get your credit terms for as long as possible. Some may not give you any credit terms during the first 6 months to a year, others may require that you provide security(a personal guarantee that you will make payment no matter what) others may give you 30 days credit which could be increased to 60 or 90 days. And if you are making profit then start putting 25% away every week to allow for the tax man. Also remember if your turnover exceeds £77,000 pa or £1480.00 a week then you must become Vat Registered and then start charging VAT on your sales. This will have an effect more so on your labour and mark up on materials. If you charge £200 for labour that becomes £240 and if you have £100 mark up on materials then that's £120. So the customer then pays an extra £60. But you need to then pay that to HMRC at the end of the quarter. Although you can reclaim all the VAT back that you pay out. So your 6000 a month turnover becomes 7200 instantly but if you were paying out 600 in Vat you then deduct that from the 1200 and pay the remainder. Again get a good accountant and have him monitor and advise on a regular basis. It may cost you to pay him but there's nothing worse than HMRC coming chasing you especially if you don't have it. I know a mate that runs a video shop. He wasn't charging VAT but his turnover was over the threshold at the time. £50k approx back then. When the tax man seen his turnover they notified The VAT man and he had to pay the VAT even though he hasn't been charging the customers VAT. His prices were lower than the other video shops in the town because he wasn't charging VAT which was what put him over the threshold. So he had to start charging 50 p more per video. Some of this may not be 100% correct as its been a good while but that's why I suggest a good accountant. Hopefully it gives you some necessary info to check up on. You don't say what business you are doing (been writing this on and off for a while so you might have updated by now) Good luck with your possible venture. Hope it works out in your favour. Quote Link to comment Share on other sites More sharing options...
UGM Posted January 29, 2013 Report Share Posted January 29, 2013 (edited) Duplicate post. Edited January 29, 2013 by UGM Quote Link to comment Share on other sites More sharing options...
neil3728 Posted January 29, 2013 Report Share Posted January 29, 2013 If you are serious about working for yourself, the best advise I can give is go talk to an accountant now. They should, if any good explain the difference between a Limited company a sole-trader / partnership or an LLP. How to set each one up, how to maintain the correct accounting records, (as HMRC can now fine you for not doing so, we have one client who the MHRC are looking at fining for this). Most will offer an initial meeting for free, as long as you sign up to use them in the future, so ask all the questions you want no metter how silly. Trust me they will have heard far worse question, I know I have. Quote Link to comment Share on other sites More sharing options...
working dog Posted January 29, 2013 Report Share Posted January 29, 2013 (edited) A lot of what has been said before. A good accountant is a must. Depending on your line of business and your target market, there may be an expectation for you to be VAT registered. If your customers are limited companies they will assume a level of company stability if you operate a limited company. Create a business plan. Understand what you are providing, the markets you are focussing on, expected startup and ongoing costs, simple P&L forecast. This then gives you a baseline to track if your business is performing on target. That said, dont be afraid to change your direction. If another area is proving more attractive and more lucrative, move in that direction. Have as much completed up front of the business go live - web site, stationery, business cards, flyers, bank account etc. as appropriate. Bear in mind that these may be the only 'window' for your customers to your business - create the right impression, even if reality doesnt quite match the image. Expect to have lean times before the money starts to come in. One that I didn't do until the end of my first quarter and my first VAT return - invest in basic accounting software. Tracking your invoices and bills will be a serious headache without this. And good luck ! Edited January 29, 2013 by working dog Quote Link to comment Share on other sites More sharing options...
mad1 Posted January 29, 2013 Author Report Share Posted January 29, 2013 Thanks for your advise lads ! I'm making an appointment as we speak .. Iv been doing the job now as a time served tech working for the same place for 19 year so I know the job inside out lol I def see a market for it but not on a massive industry as I'm in now as its falling to bits around us .... I have all the contacts and advise from the reps iv met over the years I just feel like if I just sit back and watch things fail then iv failed myself and my family I'm lucky enough my wife is working and earns enough for morg etc ... Iv got the attitude as people who know me as in " I'll have a go if it works great if it fails at least I can say I tryed !!!) Thanks every one Ps of it takes of I will offer Pw discounts :-) Scott Quote Link to comment Share on other sites More sharing options...
kent Posted January 29, 2013 Report Share Posted January 29, 2013 Best advice is don't try and buy yourself a job with your redundancy! If you have a workable plan go for it and the redundancy and savings helps tide you over fine - BUT DON'T EVER BUY A JOB! Quote Link to comment Share on other sites More sharing options...
Catweazle Posted January 29, 2013 Report Share Posted January 29, 2013 From experience, I will add that if you decide to start a partnership make absolutely sure that your partner is at least as good at the job as you are. There is nothing worse than building a business whilst carrying around a dead weight. Pretty soon you will end up doing all the work and your partner will be relegated to paperwork and meeting clients for a chat, which he will imagine is "management". Trust me on this. Quote Link to comment Share on other sites More sharing options...
ME Posted January 29, 2013 Report Share Posted January 29, 2013 From experience, I will add that if you decide to start a partnership make absolutely sure that your partner is at least as good at the job as you are. There is nothing worse than building a business whilst carrying around a dead weight. Pretty soon you will end up doing all the work and your partner will be relegated to paperwork and meeting clients for a chat, which he will imagine is "management". Trust me on this. ^^^ Good advice. Been there done that. Got rid of that dead weight in the end and now much happier. I never did a business plan. I have never done cash flow forecasts and all that stuff and I only use our accountants for the end of the year stuff. Most people that work for themselves often say that they wished that they had done it years ago. Being employed is the same as being self employed but being employed means you only have one customer (your employer) You will work harder that you ever have done for any employer and that is for good reason - no one is going to give it all to you on a plate. Keep your overheads low and remember that you and your finances come first. I have recently kept on an employee because my heart ruled my head. I paid her for six months longer than I should have done financially. In the end she took all her holiday entitlement, took days off paid over Christmas, found another job and then left without giving much notice. I will never do that again! Good luck with it mate. Quote Link to comment Share on other sites More sharing options...
kenj Posted January 29, 2013 Report Share Posted January 29, 2013 Sounds like you've got the right attitude mad1 and there has been some excellent advice offered today. What working dog said is right, start off with a professional outlook and invest in all the stationery, print shops will even design a company logo free, if you give them a decent order. I registered for Vat before I'd sold anything. On the application it asked for expected turn over and I gave a figure above the threshold. You will be selling to Vat reg. companies and your suppliers will also be registered, so it makes sense. I was offered a good job and turned it down, when I was made redundant, because I didn't want to be made redundant again. I'd put in years of hard work with my old company (GEC) all for a kick in the pants. If you have a skill, some one will want to pay you for it. Get out there and go for it! Quote Link to comment Share on other sites More sharing options...
ME Posted January 29, 2013 Report Share Posted January 29, 2013 One that I didn't do until the end of my first quarter and my first VAT return - invest in basic accounting software. Tracking your invoices and bills will be a serious headache without this. Again, good advice. We use SAGE because that is what our accountants recommended and like. We used an excel P&L until a year down the line then had to put it all on SAGE. Get a decent accounts software and use it from the beginning. Don't just buy something because it was cheap or a mate recommended it, ask your accountants - they will have use it and will bill you accordingly. Quote Link to comment Share on other sites More sharing options...
Mungler Posted January 29, 2013 Report Share Posted January 29, 2013 (edited) From experience, I will add that if you decide to start a partnership make absolutely sure that your partner is at least as good at the job as you are. There is nothing worse than building a business whilst carrying around a dead weight. Pretty soon you will end up doing all the work and your partner will be relegated to paperwork and meeting clients for a chat, which he will imagine is "management". Trust me on this. I too have that T-shirt. I joined a partnership and the dead weight was already in and with his feet under the table. For 5 years I just thought it was "one of those things" and just one of those hidden costs that comes with the swings and roundabouts of working for yourself doing a job you enjoy, with people and clients you like. You can give training, guidance, do performance reviews etc. but you cannot cure congenital laziness. We got rid of him about 3 years ago and I wrote out a massive cheque and my other partner signed over an investment property to him as part of his 6 figure pay off (and to buy back his share of the business I built up). That's the thing about partnerships - everyone is equal (unless otherwise set in a partnership agreement) and so if 1 person does F-all, his wages will be paid by the sweat of the other partners who in turn will earn less because of the drain. At the time it was expensive and horrific but it soon passed and everything got better. In fact everything got much much better without him. I now know it was the best money I have ever spent. I should however have booted him out earlier and saved a few quid sooner. It helps if you can go into business with someone but you have to trust them like a brother / sister. You must be very careful who you choose. There's a good split of talent between myself and my partner and we work as a good team. Between us, we seem to have it all under control. Find a new mate who is an accountant and start talking to friends about business. You will be amazed what you learn and pick up for nothing simply by having grown up conversations with like minded business people. Edited January 29, 2013 by Mungler Quote Link to comment Share on other sites More sharing options...
Paddy Galore! Posted January 29, 2013 Report Share Posted January 29, 2013 what do you make mate? Quote Link to comment Share on other sites More sharing options...
vampire Posted January 29, 2013 Report Share Posted January 29, 2013 what do you make mate? I make a profit.end of Quote Link to comment Share on other sites More sharing options...
mad1 Posted January 29, 2013 Author Report Share Posted January 29, 2013 I'm not planning on have anyone working with me I like to work alone then if any things wrong I know the buck stops with me !! Quote Link to comment Share on other sites More sharing options...
Mr Rizzini Posted January 29, 2013 Report Share Posted January 29, 2013 I work as a graphic designer and would be happy to design you a company logo for free to help you out a little. Quote Link to comment Share on other sites More sharing options...
mad1 Posted January 29, 2013 Author Report Share Posted January 29, 2013 Mr rizzini that will be fantastic I will def take you up on that offer !!!!! Thank you Scott Quote Link to comment Share on other sites More sharing options...
Robin128 Posted January 29, 2013 Report Share Posted January 29, 2013 If you ever wish to borrow from the bank...they will require collateral..ie mortgage on your house, personal guarantee. Suppliers may also want cash up front or personal guarantee. Look around first and get as many soft loans as possible/required...it's surprising how much working capital you will need. Try and get a rent concession on your unit. Write a business plan covering marketing, production, personel, finance etc...make sure your forecast of sales is well under-pinned by your market research. Good luck...9/10 fail. Quote Link to comment Share on other sites More sharing options...
LondonLuke Posted January 29, 2013 Report Share Posted January 29, 2013 I started my own business during the 80's recession under Maggie, when my whole company was closed, having started as an apprentice. I don't know what you intend to do, but the best advice I received was to find a good accountant. I asked around and found a young accountant just starting out, who was happy to listen to my idea for the business and even helped me with a name. I started as a sole trader from home, building the business to a small factory unit, then to much larger premises with a dozen workers. I was lucky, being able to build on my work experience and contacts. I had two young children and a big mortgage and some people thought I was crazy taking a chance, but it worked for me for 27 years. Good Luck and follow your dream. If it doesn't work out, you can always get a job. http://www.urbanfieldsportsman.com/ I've noticed all your recent posts end with that link. Not sure admins would be too keen...just a heads up Quote Link to comment Share on other sites More sharing options...
kenj Posted January 30, 2013 Report Share Posted January 30, 2013 Cheers for your concern LondonLuke. I have observed PW for some time, but never joined til recently. I started the urban fieldsportsman web site in December, posting a variety of country pursuit items relating to my life in urban surroundings, probably similar to you. I have signed off on a few posts for people to see the site and return if they wish. It's non commercial and I have a link back to PW, which I know some of my visitors have used. One of my old work colleagues, who uses PW, recognized me from my site, posted it to other ex workers. One of them, a golfing, bridge playing spinster female, contacted me to say it was well written and interesting, even though she had no knowlege of the content. Knowing what an old battleaxe she is, that was a complement indeed! Ken Quote Link to comment Share on other sites More sharing options...
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