Start up business . What to do first?
Discussion
I have just started to explore the idea of setting myself up as a 'one man band ' carrying out blind installations.
I have done this as a job before ( it isn't rocket science) but I have just been a paid fitter and never had to get involved with sales and van rental etc.
All I have done so far is make some enquiries regarding suppliers and credit card facilities (to take payments while out and about) I have a business bank account set up already. I also have access to some good contacts in the form of of site foreman on large domestic developments so I can get my business cards given to purchasers , and there are absolutely shed loads of new houses going up within a 40 mile radius, for starters there are a planned 1500 houses going up in my nearest village 4 miles away. I also know some people in the glazing trade who would be in a good position to put my cards out.
As things stands right now, I am Self funding a period of unemployment and not having much luck finding anything that pays a living wage, so I don't have much to lose..I have some cash behind me that can be used for van lease and purchasing of tools and ladders and such like) only a fairly basic set of stuff is needed. I won't be making or repairing blinds. I also have funds available to pay up front for blinds ( and payment would be upon fitting so no waiting around for invoices to be settled, hopefully) but I assume as a trade buyer, I can buy now, pay later anyway.
I would like to be set up to go before I start but I am wondering if I am a better off registering the company officially or just get some cards and flyers printed up, some magnetic signs for the van and get cracking as a sole trader and then worry about things like going limited, and getting an accountant. and VAT registration etc etc, after proving there is actually an opportunity to make some wonga.
Or should I get an accountant first, and he can answer all these questions before I spend a penny of my private money??
I would be very happy to get any pointers or criticism of my naivety if you prefer.
Sorry this turned into a longer post than it needs to be I think
I have done this as a job before ( it isn't rocket science) but I have just been a paid fitter and never had to get involved with sales and van rental etc.
All I have done so far is make some enquiries regarding suppliers and credit card facilities (to take payments while out and about) I have a business bank account set up already. I also have access to some good contacts in the form of of site foreman on large domestic developments so I can get my business cards given to purchasers , and there are absolutely shed loads of new houses going up within a 40 mile radius, for starters there are a planned 1500 houses going up in my nearest village 4 miles away. I also know some people in the glazing trade who would be in a good position to put my cards out.
As things stands right now, I am Self funding a period of unemployment and not having much luck finding anything that pays a living wage, so I don't have much to lose..I have some cash behind me that can be used for van lease and purchasing of tools and ladders and such like) only a fairly basic set of stuff is needed. I won't be making or repairing blinds. I also have funds available to pay up front for blinds ( and payment would be upon fitting so no waiting around for invoices to be settled, hopefully) but I assume as a trade buyer, I can buy now, pay later anyway.
I would like to be set up to go before I start but I am wondering if I am a better off registering the company officially or just get some cards and flyers printed up, some magnetic signs for the van and get cracking as a sole trader and then worry about things like going limited, and getting an accountant. and VAT registration etc etc, after proving there is actually an opportunity to make some wonga.
Or should I get an accountant first, and he can answer all these questions before I spend a penny of my private money??
I would be very happy to get any pointers or criticism of my naivety if you prefer.
Sorry this turned into a longer post than it needs to be I think
If you want to become a "proper" business, my advice would be to find a good accountant and get him to register a ltd co name as well as register for VAT.
Then, as a business, sit down with your accountant and work out what your monthly outgoing costs would be and then see how much work you have to do to cover those costs before you know if you have a liveable amount left over. It takes a while to get a business going and longer to get a good cash flow.
Do remember though, as it's just yourself generating the money, you won't earn while you're on holiday so take that into account of your earnings too.
Good luck.
Phil
Then, as a business, sit down with your accountant and work out what your monthly outgoing costs would be and then see how much work you have to do to cover those costs before you know if you have a liveable amount left over. It takes a while to get a business going and longer to get a good cash flow.
Do remember though, as it's just yourself generating the money, you won't earn while you're on holiday so take that into account of your earnings too.
Good luck.
Phil
Thanks, I will set about finding an accountant first.. I am meeting with someone tomorrow who will be advising me as well, so I can discuss any suggestions that come up with him.
I am sure he knows a good local accountant.
Off the shelf companies are quite cheap to set up these days too..
I am sure he knows a good local accountant.
Off the shelf companies are quite cheap to set up these days too..
I'd be more inclined to kick the LTD and VAT cans down the road a bit, and go Sole Trader initially, with a view to incorporation and VAT as you get more established.
Accountancy costs for a LTD Co are quite a bit more expensive than simple Sole Trader accounts too.
However, it's your decision to make, you need to look at the advantages and disadvantages of each form of trading.
In terms of VAT, there isn't a lot in it in profitability, what you gain from being able to claim back purchase VAT you lose in your final invoicing, unless you increase your prices accordingly, then you might make yourself uncompetitive. VAT's a minor headache that I'd leave off the list for a little while, you've got to turn over a reasonable amount before it becomes compulsory anyway.
I'm sure you'll get a variety of different opinions on this, but it's a relatively straightforward business, at least, to begin with, I wouldn't be inclined to complicate matters just yet.
Accountancy costs for a LTD Co are quite a bit more expensive than simple Sole Trader accounts too.
However, it's your decision to make, you need to look at the advantages and disadvantages of each form of trading.
In terms of VAT, there isn't a lot in it in profitability, what you gain from being able to claim back purchase VAT you lose in your final invoicing, unless you increase your prices accordingly, then you might make yourself uncompetitive. VAT's a minor headache that I'd leave off the list for a little while, you've got to turn over a reasonable amount before it becomes compulsory anyway.
I'm sure you'll get a variety of different opinions on this, but it's a relatively straightforward business, at least, to begin with, I wouldn't be inclined to complicate matters just yet.
I'd suggest that you can work out overheads, costs, margins etc without an accountant. In fact you don't need an accountant unless you incorporate (form a limited company) (you don't need one of those either). A bookeeper will be 1/4 the price and can add up numbers/deal with HMRC perfectly well. This is one bloke fitting blinds. Buy a blind for X, add Y margin if you can get away with it, add Z labour/travel and invoice X+Y+Z. Keeping overheads down is essential - every £1 you spend on overheads is £1 you earn but don't get.
If you are going to sell blinds, find and negotiate with suppliers before you start, otherwise you don't know your costs. The more you buy the better the unit price but you don't want a garage full of unsold blinds so be careful. The fact you are officially 'in the trade' and can prove it should immediately qualify you for some sort of discount I'd have thought.
Do the maths before charging into VAT registration - yes you can reclaim VAT paid on purchases (presumably blinds) but you will have to add 20% to your prices, which will make you much less competitive.
If you are going to sell blinds, find and negotiate with suppliers before you start, otherwise you don't know your costs. The more you buy the better the unit price but you don't want a garage full of unsold blinds so be careful. The fact you are officially 'in the trade' and can prove it should immediately qualify you for some sort of discount I'd have thought.
Do the maths before charging into VAT registration - yes you can reclaim VAT paid on purchases (presumably blinds) but you will have to add 20% to your prices, which will make you much less competitive.
As far as stock goes, I simply won't have any. There is no point in me keeping blinds that are made to fit specific windows, the chances of me ever having the right style and size sitting about would be slim!!
Everything will be ordered as required, any surplus or used blinds I end up with will be burnt/ sent back/ chucked away, what ever is easiest and cheapest.
The company i used to work for had hundreds of the damn things sitting around taking up space , no good to anybody but they didn't want to chuck them out.
Everything will be ordered as required, any surplus or used blinds I end up with will be burnt/ sent back/ chucked away, what ever is easiest and cheapest.
The company i used to work for had hundreds of the damn things sitting around taking up space , no good to anybody but they didn't want to chuck them out.
Shuvi McTupya said:
As far as stock goes, I simply won't have any. There is no point in me keeping blinds that are made to fit specific windows, the chances of me ever having the right style and size sitting about would be slim!!
Everything will be ordered as required, any surplus or used blinds I end up with will be burnt/ sent back/ chucked away, what ever is easiest and cheapest.
That's fair enough - in that case just get your suppliers sorted out, discounts and credit terms agreed, and make sure of their leadtimes. You don't want to promise customers a timescale your suppliers can't keep. You're only as good as your suppliers - if they fEverything will be ordered as required, any surplus or used blinds I end up with will be burnt/ sent back/ chucked away, what ever is easiest and cheapest.
k up, so do you...Simpo Two said:
I'd suggest that you can work out overheads, costs, margins etc without an accountant. In fact you don't need an accountant unless you incorporate (form a limited company) (you don't need one of those either). A bookeeper will be 1/4 the price and can add up numbers/deal with HMRC perfectly well. This is one bloke fitting blinds. Buy a blind for X, add Y margin if you can get away with it, add Z labour/travel and invoice X+Y+Z. Keeping overheads down is essential - every £1 you spend on overheads is £1 you earn but don't get.
If you are going to sell blinds, find and negotiate with suppliers before you start, otherwise you don't know your costs. The more you buy the better the unit price but you don't want a garage full of unsold blinds so be careful. The fact you are officially 'in the trade' and can prove it should immediately qualify you for some sort of discount I'd have thought.
Do the maths before charging into VAT registration - yes you can reclaim VAT paid on purchases (presumably blinds) but you will have to add 20% to your prices, which will make you much less competitive.
Completely agree, if you're going to be your own boss then the financials at this stage you should be able to work out and be comfortable with. Besides, setting up a LTD is so easy you really don't need an accountant to do that for you.If you are going to sell blinds, find and negotiate with suppliers before you start, otherwise you don't know your costs. The more you buy the better the unit price but you don't want a garage full of unsold blinds so be careful. The fact you are officially 'in the trade' and can prove it should immediately qualify you for some sort of discount I'd have thought.
Do the maths before charging into VAT registration - yes you can reclaim VAT paid on purchases (presumably blinds) but you will have to add 20% to your prices, which will make you much less competitive.
I would sort out your marketing first, as a sole trader (but pick a name/brand with one eye on names taken with Companies House and free domain names). If you can't market yourself and get customers interested in your services then any time and money spent setting yourself up will be wasted. Get some flyers and business cards out and see what sort of response you get. That'll give you a good basis to see how realistic your business plan is.
Thanks guys, already working on the flyers and cards, doesn't gave to be anything to fancy..I am even thinking I could hold off of on leasing a van until the money us actually coming in.
But, I want to try and look like I am set up for business from day one, maybe I need to look at short term van rental for a bit rather than jumping straight into a lease.
Originally I was thinking I don't need or want a huge great big van but more I think about the size of some if these blinds, I actually think I need to get the biggest one I can get otherwise I will simply not be able to deliver the things...
But, I want to try and look like I am set up for business from day one, maybe I need to look at short term van rental for a bit rather than jumping straight into a lease.
Originally I was thinking I don't need or want a huge great big van but more I think about the size of some if these blinds, I actually think I need to get the biggest one I can get otherwise I will simply not be able to deliver the things...
Buy a cheap van, don't saddle yourself with debt from day one, you will have tough times ahead (you really will), so getting a bit of money in the bank to cover the tight months is important
don't setup a Ltd Co or VAT register initially- you can turnover £81k before needing to pay VAT- if you are close to that threshold you are better off not working for a couple of weeks quite often than registering!
Get a bank account and website setup, but most of all go and sell something!
Everything else is irrelevant if you aren't actually selling stuff.....
don't setup a Ltd Co or VAT register initially- you can turnover £81k before needing to pay VAT- if you are close to that threshold you are better off not working for a couple of weeks quite often than registering!
Get a bank account and website setup, but most of all go and sell something!
Everything else is irrelevant if you aren't actually selling stuff.....
Simply from an IT side I would spend a tenner and get the domain name you want registered and have a "proper" email address that can go on cards/signs/van etc.
Nothing worse than seeing someone who's had their van professionally signwritten with joesparks8845@aol.com because a) it looks st and b) you won't remember if you see the van out and about.
Nothing worse than seeing someone who's had their van professionally signwritten with joesparks8845@aol.com because a) it looks s
t and b) you won't remember if you see the van out and about.bhstewie said:
hstewie said: Simply from an IT side I would spend a tenner and get the domain name you want registered and have a "proper" email address that can go on cards/signs/van etc.
Nothing worse than seeing someone who's had their van professionally signwritten with joesparks8845@aol.com because a) it looks st and b) you won't remember if you see the van out and about.
I hate this. Had a guy come to me for signwriting with a 15 plate Transit Connect Custom last week and his email read very similar to that. He also doesn't have a website! I put him onto my uncle who does websites and told him I'd change his email and put the website on FOC if he gets it done.Nothing worse than seeing someone who's had their van professionally signwritten with joesparks8845@aol.com because a) it looks s
t and b) you won't remember if you see the van out and about.Better to have something simple and memorable than look unprofessional IMO.
Spanna said:
bhstewie said:
hstewie said: Simply from an IT side I would spend a tenner and get the domain name you want registered and have a "proper" email address that can go on cards/signs/van etc.
Nothing worse than seeing someone who's had their van professionally signwritten with joesparks8845@aol.com because a) it looks st and b) you won't remember if you see the van out and about.
I hate this. Had a guy come to me for signwriting with a 15 plate Transit Connect Custom last week and his email read very similar to that. He also doesn't have a website! I put him onto my uncle who does websites and told him I'd change his email and put the website on FOC if he gets it done.Nothing worse than seeing someone who's had their van professionally signwritten with joesparks8845@aol.com because a) it looks s
t and b) you won't remember if you see the van out and about.Better to have something simple and memorable than look unprofessional IMO.
PugwasHDJ80 said:
Buy a cheap van, don't saddle yourself with debt from day one
Yep. The world is full of affordable second-hand vans. Just buy one and depreciate/offset it through the books (you may need help with this). Rentals and leases are overheads. Buy a van for a few K. If the business goes phut sell the van.Agree too with the need for a smart professional image so put some time thinking about your trading name/logo/etc.
Simpo Two said:
PugwasHDJ80 said:
Buy a cheap van, don't saddle yourself with debt from day one
Yep. The world is full of affordable second-hand vans. Just buy one and depreciate/offset it through the books (you may need help with this). Rentals and leases are overheads. Buy a van for a few K. If the business goes phut sell the van.Agree too with the need for a smart professional image so put some time thinking about your trading name/logo/etc.
You're not going to have much option anyway, other than short term renting, as there's no way you'll get a lease without a minimum of 1 year's trading behind you, and chances are, realistically, you'll need 3 years accounts.
I didn't realise I would find it hard to lease a van as a start up company, but I do agree that buying a semi respectable used van might well be the way to go.
I have also looked into domain names and email services etc..cheap as chips so it would be silly not too and the domain name I am after is available , I wouldn't need a full on website but obviously a page or two just to give me a presence is easy and cheap.
All very good advice , and much appreciated chaps.
I also need to sort out a second phone line at home to keep business calls professional, I can't believe BT want £130 to come and hook it up, I am assuming the wires already come into the house..anyone know any work arounds for that, can I just hook it up myself and ask them to switch it on or something??
I have also looked into domain names and email services etc..cheap as chips so it would be silly not too and the domain name I am after is available , I wouldn't need a full on website but obviously a page or two just to give me a presence is easy and cheap.
All very good advice , and much appreciated chaps.
I also need to sort out a second phone line at home to keep business calls professional, I can't believe BT want £130 to come and hook it up, I am assuming the wires already come into the house..anyone know any work arounds for that, can I just hook it up myself and ask them to switch it on or something??
Edited by Shuvi McTupya on Saturday 21st March 18:50
Super Slo Mo said:
I think BT have a monopoly on it all, so you're stiffed. That's my experience anyway. Get the line booked now 'cos it'll take them weeks to get you connected, their service is diabolical.
you appear to be confusing BT Group Plc, BT retail and OpenreachBT do not have a monopoly on retail provision
however unless you are in a Virgin cabled area Openreach will have to do the line work as it's openreach who 'own' and manage the GPO/Telecom network ...
it's funny how people cope with this concept for gas / electric / water but still stuggle to grasp it with telecoms
Edited by mph1977 on Saturday 21st March 19:59
Whover supplies it, he'll need a second phone line physically run to his house (though there may be some smartalec solution I'm too old to understand now). Hence the cost and delay.
BUT these things are valid setup costs. Not splashing cash is one thing but skimping is another - and all such things can be offset against tax. It doesn't make them free, but it helps.
Nothing worse that calling what you think is a business and getting a screaming child/barking dog in the background.
Website: I think this is about right www.wiresandpipes.co.uk - simple, honest, does what it says on the tin, no flannel. The photography is poor but that's not what he does.
BUT these things are valid setup costs. Not splashing cash is one thing but skimping is another - and all such things can be offset against tax. It doesn't make them free, but it helps.
Nothing worse that calling what you think is a business and getting a screaming child/barking dog in the background.
Website: I think this is about right www.wiresandpipes.co.uk - simple, honest, does what it says on the tin, no flannel. The photography is poor but that's not what he does.
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