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

D.P. said:
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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I didn't ask to borrow money. It was offered to me from the word go :confused: If you had read the thread you would see this.
 
LordSplodge said:
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.
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Because it is not tax efficient until you have reached a certain level of profit.

A limited company is not difficult to start but it is a more complex option and will result in much higher accountancy fees etc. It's more complicated to close down as well.

Best to have a dabble as a sole trader and then start a limited when (if) the time is right.
 
This thread is getting ridiculous.

He has posted a speculative question on how to start up as he is thinking of doing a few pc repairs on the side.

Accountants, forecasts, this is getting stupid. Phate you don't need a loan, any equipment which you probably don't already have. Just advertise and see how it goes, then buy things which you find you are missing. PC shops are open long hours, its hardly going to be a hassle to buy as and when you need little bits and bobs.
 
The thread title is a bit misleading.

A business isnt fixing computers for friends and family, so people have probably got carried away. Without any idea of turnover its not suprising we're getting both ends of the scale as their views of a business differ vastly.
 
First you need customers....
So start off getting a name for yourself round your family, friends, neighbours etc. then you have the stepping stones build from.
Keep the punters sweet and you're onto a winner.


Damn, lunch break over, I'll have to come back to it later..
 
How about competition? I assume the average Joe would think of the Purple Tech Guys as the first port of call. It's going to be hard to generate a worthwhile income from this because it's very reliant on reputation and trust.
 
Jambo said:
Because it is not tax efficient until you have reached a certain level of profit.

A limited company is not difficult to start but it is a more complex option and will result in much higher accountancy fees etc. It's more complicated to close down as well.

Best to have a dabble as a sole trader and then start a limited when (if) the time is right.
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At what point is it worth switching over and how easy is it to do said switch?
 
LordSplodge said:
At what point is it worth switching over and how easy is it to do said switch?
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I'm not an accountant so I don't know exactly. I think it is in the region of £15k but is variable.

It is fairly easy to switch and your accountant would deal with all the tax stuff. In some instances where you have established a profitable sole trader business you can sell the good will of the business to the limited company which as a result can give you some substantial tax free drawings from the limited.
 
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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Becuase business finance on the scale which justifies paying an account is NOT the sort of thing you earn from doing PC repairs on the side for friends and family and their friends, is it?

What exactly is an account going to do for somebody who is earning perhaps 40 quid a few times a week?
 
LordSplodge said:
Only 15k?

In that case I'd be tempted to go straight to Limited Company. Maybe not for Phate as I don't think her is aiming at more than 15K
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Talk to an accountant, things are changing ATM which are making it worth staying as a sole trader into much higher incomes.

It's not as simple as people are making out having a LTD company either, for one, it'll atleast double your accountants bills just for the extra work that needs to be done. Then you'll still need to fill in a personal tax return (or get your accountant to) and pay tax on a proportion of your dividends from the LTD company. And no offence intended, but some of the figures I've seen Morba quoting in other threads on the subject seem a bit unrealistic to say the least.
 
Dabbled in this myself a few years ago. Ended up a massive hassle & not worth the time via profit in my experience.

Forget all this accountant nonsense, loans, spare desks & testing machines etc.

All you need to do is spend a few quid on getting a few thousand leaflets printed. Distribute via your chosen method & expect an initial response of 2-3%. An ad in your local paper as well can help, although if you are only using a mobile no as a contact expect a lower response. Call other local people doing the same thing as a 'mystery' shopper to find the local market rates. Then price yourself accordingly. Always expect no fix no fee, & always ask for a referral at the completion of each job. Referrals are gold & the only real way of making this particular service area succeed.

Use existing tools as required initially & then hope you are good enough, & of course financially competitive enough to compete in a very small market. PC's are pretty much throw away tech these days for most, laptops from £200, printers £30 yada yada...So don't expect to make much I'm afraid. Maybe also consider offering OAP internet/email training etc..other related areas that will offer better profitability.

Then & only then worry about VAT, accountants, holiday homes :p etc..

Good luck, you will need it I'm afraid.
 
[TW]Fox;12270991 said:
Becuase business finance on the scale which justifies paying an account is NOT the sort of thing you earn from doing PC repairs on the side for friends and family and their friends, is it?

What exactly is an account going to do for somebody who is earning perhaps 40 quid a few times a week?
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Ok, fair point.

To be honest, I was talking about things as happened to me. I started out like Phate appears to be looking at doing, and soon found that the volume of business I started to pick up was greater than I first imagined it would be.

Especially with the web design side of things.

So what I mean when I mention getting an accountant on board, it relates to that - my own personal circumstances and experiences.

As someone else already mentioned, the first consultation with an accountant is generally free and they can sort you out with registering with Mr.VATman as a sole trader in a hassle free manner.

All I'm saying is that it takes a bit of pressure off you if someone who knows exactly what they are doing, takes care of the books, invoices etc.

Now that may not at this moment in time, apply to Phate, but you never know how things may progress.

It's a nice thing to know that all I do is keep an intray at home and everything goes in there, invoices, receipts etc and then gets dropped off at my accountants once every quarter. He then deals with it all and I don't have to concern myself with it at all.

That's all I was trying to get at when I said get an accountant onboard.

For someone starting a new business as a sole trader or LTD company, if you are going to go as far as registering with the taxman, you may as well get set up with a good accountant right from the start. You will only pay fee's to him/her in direct proportion to how much income you generate.

However, if, as you say, you reckon it's just going to be a quick couple of "£40-£50" earnings every week, then don't bother - just do it cash in hand and wait and see how things progress.

In my first year of trading as a sole trader, I've generated more income than I had any idea I would with the web design side of things and to be honest, account related paperwork is the last thing I want to deal with when I've got my head buried in websites most of the time. :p
 
Mickey said:
Talk to an accountant, things are changing ATM which are making it worth staying as a sole trader into much higher incomes.

It's not as simple as people are making out having a LTD company either, for one, it'll atleast double your accountants bills just for the extra work that needs to be done. Then you'll still need to fill in a personal tax return (or get your accountant to) and pay tax on a proportion of your dividends from the LTD company. And no offence intended, but some of the figures I've seen Morba quoting in other threads on the subject seem a bit unrealistic to say the least.
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What figures that I have posted seem unrealistic?
 
@OP just go for it.

Treat it as a hobby at first - no pressure. Just a sideline. If it builds up and you get into it then take it further.

Make sure you get public liability insurance, though, if you're going to be fiddling around with other people's stuff. Other than that .. get some business cards (vistaprint will do to for a start - find a promo code) and off you go.

If people insist on invoice/payment then I'm afraid you got to register with the NI/income tax .. there's an 0845 number to ring and you're done.

It's incredibly easy to setup.

Keep all receipts as well :)
 
Mickey said:
The figures on how much you save by having a LTD company over being a sole trader.
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Actually, I'll expand on this before you even ask.

Taking for example this post:
Morba said:
i believe it is the moment that you find out that you will be there for a minimum of 2 years that they start to treat you as an employee, not when you actually reach the 2 years.

so for people on a rolling 1 year contract, they find out pretty much as early as 1 year into the contract.

I am with SJD as well, find them very good so far. Going Ltd will save me a minimum of £15k in my first year, now, for even 1 hour a day i am sure we would all be happy for another 15k a year..
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Now without knowing your actual contract rate it's hard to show accurately, but lets assume £100k a year for an average IT contractor.

Sole trader:
Profit: 100,000
Class 2 NI: 120
Class 4 NI: 3,421
20% Tax: 7,200
40% Tax: 23,426
Total deductions: 34,167

LTD company:
Salary: 5,435
Profit: 94,565
Corp Tax (21% rate): 19,859
Income Tax (40% rate): 9,677
Total deductions: 29,536

A saving of £4,631. I'm also sure I've seen posts of yours where you say you're actually paying yourself more than the £5,435 personal allowance.


So yes, that's why I don't think your figures add up, and you also have the added accountants expenses when running a LTD company.
 
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