Advice please: Starting a business

josh_sheffield

josh_sheffield

josh_sheffield

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8 Sep 2014
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188
Hi all, I'm hoping to start a business with a friend of mine. He's a talented craftsman but has struggled in the past with confidence and anxiety. Meaning he sells his work for less than it is worth and has never managed to work for himself.

I'm wanting to provide more of the admin and sales while he does the majority of the manual work. This will be alongside my day to day job. I'm not really wanting to get much financially from this, it is mainly to help out a friend. Plus it will give me access to a workshop space to make use of.

I've done some research and seem to think registering as a limited company is probably the way to go.

Does anyone have any advice, hints/tips, etc?
 
I read the first sentence.....that was all I needed to know.

Friends/Business/Money very rarely ends well.

Unless you have a water tight business plan/financial plan/long term agreement - it will struggle to work.

  • who gets paid what - you want to help a friend out, very nice, but what if it ends up being 15/20 hours a week???
  • how many hours are you contributing - what are you expecting your friend to do?
  • additonal tax/NI for you if your getting paid - what does your existing job/work say about working for someone else? Check your contract.
  • self assessment for you for any income earned/expenses etc
  • accountants fees/solicitors fees - who pays for them
  • business rates/overheads/insurance - who covers all this?

If he's never managed to make it work - how and why will you suddenly solve this for him??
 
Why do you think registering as a limited company is necessary? Unless there's a fair amount of profit I don't think that's the best way to go due to the paperwork involved especially tax wise.
 
booyaka said:
I read the first sentence.....that was all I needed to know.

Friends/Business/Money very rarely ends well.

Unless you have a water tight business plan/financial plan/long term agreement - it will struggle to work.

  • who gets paid what - you want to help a friend out, very nice, but what if it ends up being 15/20 hours a week???
  • how many hours are you contributing - what are you expecting your friend to do?
  • additonal tax/NI for you if your getting paid - what does your existing job/work say about working for someone else? Check your contract.
  • self assessment for you for any income earned/expenses etc
  • accountants fees/solicitors fees - who pays for them
  • business rates/overheads/insurance - who covers all this?

If he's never managed to make it work - how and why will you suddenly solve this for him??
Click to expand...


This is the problem.

jimjamuk said:
Can you sell the stuff on ebay/Amazon/Etsy/some other online marketplace

Maybe set is up for him - administer it. Set the prices and take a small cut
Click to expand...

This is the solution.
 
Thanks for the quick replies.

Ebay/amazon/etsy are all under consideration, plus we have a number of comissions lined up.

The reason for thinking of setting up a limited company is issues we have already encountered. Such as insurance. Having rented a space it was hard to find insurance for our needs outside of business insurance.

Also some suppliers will give us better rates as a registered business.
 
booyaka said:
If he's never managed to make it work - how and why will you suddenly solve this for him??
Click to expand...

Its a matter of combining skills. My friend essentially had minor mental health issues, such as anxiety, this makes it hard for him to do little tasks like pick up the phone and call a stranger. I dont. I also dont have his skills when it comes to making things. Hence I plan to help make it work by handling the elements which for him would be a struggle.
 
josh_sheffield said:
Its a matter of combining skills. My friend essentially had minor mental health issues, such as anxiety, this makes it hard for him to do little tasks like pick up the phone and call a stranger. I dont. I also dont have his skills when it comes to making things. Hence I plan to help make it work by handling the elements which for him would be a struggle.
Click to expand...

good luck - i do with you both the best. But please don't leave it as a friendly "business" arrangement.

Get it sorted properly/legally in terms of who own's what/who get's paid what. Otherwise someone will end up getting shafted and friendship will be over.
 
Try and keep it under the radar of HMRC and the local authority for as long possible.

When you start getting them involved it becomes infinitely more difficult to make money.

You can still pay taxes in the form of a "self assessment".

Good luck with your new venture :)
 
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