What do I need to do to get my own business going?

dodgem said:
I was giving a round figure from memory :p the actual current figure is £61k.... if you turnover more than £61k then you HAVE to be VAT registered, other wise you do not need to be VAT registered.
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If you turnover more than £125k or so you cant be flat scheme. Its on the link Ive already posted in this thread. i was looking at a full time business model rather than on the side I admit. Its total no brainer to go flat rate on a service product.
 
dodgem said:
eg. without being VAT reg, he charges £100 for a repair. It costs the customer £100 and Phate gets £100 of which he has to pay 22% or whatever it is atm in income tax so he actually gets £78.

being VAT reg, he charges £94.90+vat = £111.50 for a repair. It costs the customer £111.50 and Phate pays the VAT man £11.50 so he now has £100 of which he keeps £78 after income tax.

Phate is now more expensive than before but no better off himself. Yes he can claim VAT back on the goods he purchases for his business... yes ALL 3 OF HIS SCREWDRIVERS!!! Sure and other bits and bobs, but he is in service and so doesn't buy much...

(figues might be a bit out cos it's late)
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Thats actually wrong.

Why has his service gone down 5.10 (which happens to be the 5% you typically get from flat rate, ie 17.5-12.5). If he charged £94.50 from the start he would be worse off that if registered. I agree though that there is no put making his price higher than it has to be whilst trying to get into the market place and gain a customer base. It does look a little more professional maybe though. It totally depends on what type of customer hes pursuing. Mr and Mrs Jone next door or whoever finds him in the paper or newasgents noticeboard probably isn't where you would consider this type of registration so its largely a moot point.

If your on flat rate you cant claim VAT on incidentals and overheads, thats the point of it.
 
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Mickey said:
It sounds like you've been slightly misinformed (or you haven't taken it in). The flat rate looks much better than it actually is. You're not actually paying 11.5% as you think (65% of the VAT you've charged), you're paying 11.5% of the gross figure, e.g. if you do £100k of business + VAT, comes to £117,500, you pay 11.5% of that, so £13,512.50 is paid, that's 13.5%ish (77% of the VAT you charged). When it goes up to 12.5%, you'll actually be paying 14.7% (84% of the VAT you charged).

It can still be a good little earner in some situations though :)
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I probably just havent explained it that well, as I know its 11.5% of your gross. 84% payback to you keep 16% of it is better than a slap in the face? Your take home pay goes up, I cant see how that can look better than it is?

£120 a month is a pretty decent earner for doing nothing in my book. I fail to see how being 'misinformed' or not 'taking it in' changes that :confused:

EDIT: Infact looking back i havent explained it that well as I keep refering to a 5% difference. Ah well :)
 
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you need some decent screwdrivers, a wallet of CD's and a USB hard drive. maybe a couple of DIMMs of common RAM types and you're away. the RAM dimms dont even need to be big un's
 
get a better paid full time job. You are already working 7 days a week! You have a girlfriend? How happy is she with the potential to see you less?
 
Aside from the points already debated in here I'd suggest seeing if either Huddy or Jonny69 has any advice they are willing to give you because as far as I'm aware Jonny used to do this as a business and Huddy still does part time so they ought to have a bit of an idea.
 
My god Fox is so negative.

Anyway, i think it wont hurt trying Phate :) . You seem like you have your head screwed on and are willing to learn things and make an effort of it. Surely thats a good enough attitude for someone willing to try something new ?

I became an electrician 5 months ago and am now classed as self employed. I didnt really know what was going on but theres always people with advice and to tell you what to do. A decent accountant is one of those people, and will get the paperwork done (which wont be allot for you).

And lastly, good luck with it!
 
I'd say go for it.

Maybe look around as to how many people live in your area, how many others do this type of thing to get a rough idea the amount of work that could possibly be involved.

The only thing that may knock you back is the impatient types that want the pc sorted pronto and as you have 2 other jobs already, this may affect how much time you can put toward it.

I do it locally in the town where I live. I have a job full-time at home and also do part-time work for a local community center. It can be difficult sometimes to juggle the work around but as I work at home, I can put in a little more time into it inbetween other things.

You don't need a lot of gear. Like many have said, a good screwdriver set, a couple of sticks of RAM, multimeter, decent PSU, a flash drive (although a decent sized HDD in a USB Caddy I found was better), a refurbished laptop with wireless capability, a copy of XP & Vista and some patience.
 
It's no wonder I'm negative with some of the junk advice in this thread. Get an accountant? Are you serious? For a part time evening job fixing neighbours/friends computers?

Why not rent a retail unit as well and employ 12 staff and hire 15 vans whilst you are at it?
 
Just do the work and take the money. Screw telling anyone.

'Spec me how to ask to for money from my friends after I have fixed their Pc' :p
 
[TW]Fox;12267097 said:
It's no wonder I'm negative with some of the junk advice in this thread. Get an accountant? Are you serious? For a part time evening job fixing neighbours/friends computers?

Why not rent a retail unit as well and employ 12 staff and hire 15 vans whilst you are at it?
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It depends how big the business gets and how quickly. You are the one suggesting that Phate lacks financial nous, I'd have thought you'd be in favour of him getting an accountant to keep him on the straight and narrow then. It is likely to be unnecessary to begin with but then again it doesn't need to be hugely expensive to see one that specialises in small businesses so for the peace of mind and reassurance/removal of effort on your part it could be worthwhile.

And you are being silly about the staff and vans, even if Phate drives one himself that still leaves two vans sitting unused which is a poor use of resources. ;)
 
Accounting Software has never been easier to use.

Plenty of tutorials out there and if that doesn't float your boat, there will probably be one day classes somewhere you can take or even ask around to see if there is a friend who does book keeping. Your good old pub landlord is a good place to start. ;)
 
Draeger said:
Yes.

Tell me this then. Why should you not bother to pay an accountant to manage your business finances?.
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Because he is not going to be earning enough money to make it worthwhile.
I pay an accountant because they save me lots of money. Phate will not be in the same wage bracket to take advantage of this. Everything he needs from an accountant he can do himself.
 
Agreed.

Depends on how it pans out for him though.

I didn't think of taking an accountant onboard initially, but it did get to the stage very quickly where I felt the need to do so.

It may well happen for Phate, also. :cool:
 
Completely, it might go that way. But unless he gets a serious amount of business or moves into other avenues of cash flow (managed support for networks or whatever) I really cannot see simple PC repair being anywhere near enough to make an accountant worthwhile.
 
Personally I would take advice from an accountant to ensure I was doing things right like book keeping etc. Many accountants will give a free initial consultation and for example might tell him he is wasting his time because his projected earnings will take him in to the 40% tax bracket.

Then later, his accountant can do his tax return which doesn't cost a lot at all and will probably save him money in allowable expenses etc.

Put it this way, if you start a business and mess up your book keeping and tax affairs its going to cost a whole lot more to put it right than to take advice from the start.

Again, I have to agree with Fox, there is a lot of junk advice (in general) in this thread and I would advise to join a business forum but more importantly speak to your local Business Link for free advice.
 
Jambo said:
Don't start a Limited Company until an accountant has told you to..
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What is your reasoning behind this? LTD does have quite a few advantages (and, of course, disadvantages) to Sole Trader. They are not that difficult to start and often people think better of LTDs rather than Mr Sole Trader.

I am not saying going Limited is the right thing to do in this situation just wondering the rational behind you one-liner.
 
Phate said:
I do find it amusing how you can apparently tell that I currently have serious finance issues due to taking on more work.

Ever wondered if it was just for purely extra income? So I can go on more holidays, mod the car etc. Never cross your mind?
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Well, you are asking to borrow 1000£, which is tuppence if you are serious about starting a business. That screams major financial problems
 
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