Going full time with side business

[adamc987]

Hi, I have a business that I have been building up around my 9-5 job for the past year or 2. It’s motor trade related and I’ve ended up with getting a good reputation for my work.

I have been made redundant and I thought nows the time to take the plunge and try it on my own (even though it was a big shock!). I spoke to some existing customers who were waiting for work and I am currently booked up for the next 3 months.

But that’s where the good stuff ends….

It’s registered as a Ltd company (but registered and no accounts put forward) and I have a business bank account (starling) but I need to know about accounts/paying myself a wage and any other things (I.e wether to go VAT registered,business grants or tax reliefs). I’m 34 so I won’t qualify for the young startup grant but to be honest I’m not bothered about a grant but just don’t want to miss out if there is one available.

Would it be best seeing a run of the mill high street accountant or try find a business manager/financial advisor I can speak to? I’d ideally like to sit down for a couple of hours for someone to explain things to me in layman’s terms.

Any advice you would suggest or any business owners that would or wouldn’t do things differently. I’ve always worked for a company so all this is new to me

Edited by adamc987 on Sunday 20th March 19:21

[Prolex-UK]

adamc987 said:

Hi, I have a business that I have been building up around my 9-5 job for the past year or 2. It’s motor trade related and I’ve ended up with getting a good reputation for my work.

I have been made redundant and I thought nows the time to take the plunge and try it on my own (even though it was a big shock!). I spoke to some existing customers who were waiting for work and I am currently booked up for the next 3 months.

But that’s where the good stuff ends….

It’s registered as a Ltd company (but registered and no accounts put forward) and I have a business bank account (starling) but I need to know about accounts/paying myself a wage and any other things (I.e business grants or tax reliefs). I’m 34 so I won’t qualify for the young startup grant but to be honest I’m not bothered about a grant but just don’t want to miss out if there is one available.

Would it be best seeing a run of the mill high street accountant or try find a business manager I can speak to? I’d ideally like to sit down for a couple of hours for someone to explain things to me in layman’s terms.

Any advice you would suggest or any business owners that would or wouldn’t do things differently. I’ve always worked for a company so all this is new to me

Good accountant first port of call.

Is based in bournmouth poole area can recommend mine

[Simpo Two]

adamc987 said:

I spoke to some existing customers who were waiting for work and I am currently booked up for the next 3 months.

It’s registered as a Ltd company (but registered and no accounts put forward) and I have a business bank account (starling) but I need to know about accounts/paying myself a wage and any other things (I.e wether to go VAT registered,business grants or tax reliefs).

Would it be best seeing a run of the mill high street accountant or try find a business manager/financial advisor I can speak to? I’d ideally like to sit down for a couple of hours for someone to explain things to me in layman’s terms.

Any advice you would suggest or any business owners that would or wouldn’t do things differently. I’ve always worked for a company so all this is new to me

What do you mean by 'It’s registered as a Ltd company (but registered...'?

Seeing as it's all new to you, you've done very well to have 3 months' work in the order books. Accounting stuff you can learn, getting customers requires talent.

Seems to me you don't need a business advisor, you've already got the start of good business. Financial advisors (IFAs) are more about pensions and investments, not running a business.

Accounts - until you can talk to a professional, keep everything. All records and receipts of money going in and out. They can be added up in due course.

'Wage' - you have two options - salary (because you're an employee of your company) and dividends. You have a tax-free allowance of £12,500 for the first and £2,000 for the latter

VAT. IMHO the usefulness of VAT depends on how much stuff you buy in and whether your customers are VAT registered. At one end of the scale, if you work purely for fees and your customers are general public, registering will just put your prices up 20% and make you uncompetitive. At the other, if you buy in lots of goods to resell, and your customers are VAT registered, then you can claim back the VAT you pay on goods, and your customers effectively don't pay VAT because they can claim it back. Win win. So it's a juggling act depending on your situation. As it is, you can say 'There's no VAT to pay' and your (Joe Public) customers will love you for it.

Keep the books as tidy as your spanners and you'll be fine

[jonsp]

First of all congratulation on getting this working. Now

adamc987 said:

It’s registered as a Ltd company (but registered and no accounts put forward) and I have a business bank account (starling) but I need to know about accounts/paying myself a wage

As a director you should be a PAYE employee of the company. Pay yourself £730/month as a salary, from the company account in to your personal account. This means you pay no income tax/employee NI/employer NI but you still qualify for credit toward your state pension. You might need that one day - if there's any pension money left when you're 65!

You probably can't live on £730/month so pay the rest of what you need/can afford in dividends - they attract a lower tax rate and there's no NI.

But you must - absolutely must - keep your company and personal bank account separate.

adamc987 said:

I.e wether to go VAT registered

When you reach a certain turnover (~85k) you won't have a choice whether to go VAT registered.

Question is whether you choose to go VAT before your turnover reaches that - I'm assuming it hasn't yet. If you sell to businesses go VAT registered now. Companies don't care that your prices go up to £x + VAT, you can use the VAT for cashflow and reclaim VAT on your purchases. If you sell to consumers don't go VAT registered until you have to - clearly they will care that your price goes up by 20%.

Starting now get yourself a decent accounts package - I like Sage but others are available. Use it and record everything.

[DanCat]

If you have one put your website address in your profile too

[Eric Mc]

Talk to an accountant without delay.

[Knoxville2410]

I use Tax Assist who have been fab so far, and very reasonably priced.

Also, if you need a website creating or some marketing campaigns putting together, give me a shout, it's my bread and butter

[Simpo Two]

Eric Mc said:

Talk to an accountant without delay.

Is that like a minister without portfolio?

[adamc987]

Thankyou all, your answers have certainly given me more of an insight in to what’s needed, I’m booked in to go see a local accountant next Wednesday and at least now I’m not going in completely blind.

I haven’t thought about a website (most of my work comes from social media as I have a good name on the specific forums and pages and now word of mouth from it snowballing with other people hearing about me from friends etc) I have Facebook and Instagram where I take my bookings from (I took my bookings solely off an Instagram page when I was working for someone else,they would see my work on Facebook but only way to contact me was via Instagram)
So I think having a website may be another channel where I have to check and a bit of a pain? And maybe not worth it and just stick to my Facebook page and Instagram?

[StevieBee]

adamc987 said:

So I think having a website may be another channel where I have to check and a bit of a pain? And maybe not worth it and just stick to my Facebook page and Instagram?

Having a website gives you additional digital visibility and there's a certain expectation that businesses should have one so not having one may be detrimental. Doesn't need to be a fancy all bells type thing. A single page you make yourself on go daddy or similar is all you need. Just a brief intro, contact details and links to your socials. Once something like this is set up and running, there's no need to keep checking on it other than to make sure its there.

This also means that you secure the domain name that best suits your business stopping others from using it.

[Simpo Two]

Agree on the website. This is a proper business now not a hobby. Prospects will say 'Have you got a website?' because they want to see/know more, and not everybody plays on social media. Everybody can see a website. You don't have to check it, you can set up a contact section so they can e-mail you or fill in a form. It's virtually free advertising the world can see.

I think not having a website is up there with a Hotmail e-mail address or only a mobile number; it says you're not taking it seriously.

[WillB]

I personally think the days of 'having to have a website' for many businesses are gone, depending on your market

Put your efforts into Facebook / Instagram for now as you say. The website can come later, if needed

Is it vehicle detailing you're doing?

[StevieBee]

WillB said:

I personally think the days of 'having to have a website' for many businesses are gone, depending on your market

My accountant has made it this far into the 21st century without ever having had one. But as you say, it is very sector specific. Everybody has a web browser. Not everyone has (or wants) a social media account...although of course you can access the latter with the former... but you get the point.

[Simpo Two]

StevieBee said:

WillB said:

I personally think the days of 'having to have a website' for many businesses are gone, depending on your market

My accountant has made it this far into the 21st century without ever having had one. But as you say, it is very sector specific. Everybody has a web browser. Not everyone has (or wants) a social media account...although of course you can access the latter with the former... but you get the point.

I have a friend who only promotes himself on Facebook. He says people will like and share his posts and tell their friends and they will all come flocking. I tell him not everybody is on Facebook, and that they won't bother to tell their friends. He makes about £300 a year from it. He let his (very good) domain lapse because he 'didn't understand it'.

For the price of a website it's daft not to IMHO. You can only profit from it.

[NextSlidePlease]

Not only as a face for the company but for back end intel as to who is clicking on your site from where is useful for tying into your social media usage.

Also a good up-to-date website with a portfolio of work along with decent branding will generate trust and that's half the battle of aquirong new customers, moreso if you are offering a service rather than products.