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Author: Subject: What's involved in setting up your own business?
smart51

posted on 7/6/18 at 07:06 PM Reply With Quote
What's involved in setting up your own business?

Things have come together to the point where I'm thinking of setting up my own business. I'm still a bit nervous of the transition of giving up my full time job and then getting enough orders to keep afloat but if I got enough interest, I'd probably do it. What's involved in setting up your own company.

I'm thinking of building garden offices and studios. There's enough money in it to pay my current salary to two people without having a full order book. I'm building the first one in my garage at the moment and I'm loving every moment of it. What would be involved in setting up a small business to do this kind of thing?

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starterman

posted on 7/6/18 at 07:40 PM Reply With Quote
Apart from a good support network the most important thing you need is to hold your nerve and not panic when business goes quiet. Whatever you decide, good luck.
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nick205

posted on 7/6/18 at 08:07 PM Reply With Quote
First of all good luck and as above keep your nerve.

Second I'd say make sure you can do your books, don't necessarily pay an accountant, but at least make sure you know what you're doing. Tax bills aren't pleasant at the best of times, but unexpected ones are worse.

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bi22le

posted on 7/6/18 at 10:41 PM Reply With Quote
Not being facetious, so how much have you really thought about it? I have never owned my own business but I have been integral to a couple of small ones ( a shop and 5Mill turn over manufacturing company). I would also love to do it one day, so have read a fair bit on it. Things to consider.

- Where is your work coming from
- If that dries up, then where is your work coming from
- Do you rely on any particular suppliers and what is your relationship
-If it goes really well, what next
-Do your sums
-Think of logistics for materials
-Reduce overheads and streamline your work
-What is your USP and why would people use you
-Set goals
-Set long term plans
-What is your get out of it goes good or bad
- identify risks and plan for them now





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David Jenkins

posted on 8/6/18 at 06:06 AM Reply With Quote
quote:
Originally posted by nick205
First of all good luck and as above keep your nerve.

Second I'd say make sure you can do your books, don't necessarily pay an accountant, but at least make sure you know what you're doing. Tax bills aren't pleasant at the best of times, but unexpected ones are worse.


When I was a self-employed contractor I kept my own books and dealt with the monthly VAT payments, but used an accountant for my end-of-year returns. I also needed the accountant to set up the company in the first place, register me with Companies House and HMRC (for VAT) - not something you can easily do for yourself unless you have prior knowledge. Running the payroll is also a PITA, even though I was the sole employee, and I needed the accountant to set me on the right track in the beginning.

One advantage of getting a reputable accountant to do the annual returns is that you rarely get an inspection from HMRC - I didn't a check in 10 years of running my business.





The older I get, the better I was...

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smart51

posted on 8/6/18 at 06:17 AM Reply With Quote
quote:
Originally posted by bi22le
Not being facetious, so how much have you really thought about it? I have never owned my own business but I have been integral to a couple of small ones ( a shop and 5Mill turn over manufacturing company). I would also love to do it one day, so have read a fair bit on it. Things to consider.

- Where is your work coming from
- If that dries up, then where is your work coming from
- Do you rely on any particular suppliers and what is your relationship
-If it goes really well, what next
-Do your sums
-Think of logistics for materials
-Reduce overheads and streamline your work
-What is your USP and why would people use you
-Set goals
-Set long term plans
-What is your get out of it goes good or bad
- identify risks and plan for them now


All very good points. I've done the sums. Even buying materials at DIY prices, the numbers are good. I can operate out of my double garage and home office initially to keep overheads right down. Being in the city, there are lots of suppliers for my materials. I'm not using anything special and can multi source everything.

I have two USPs that makes what I'll offer different to the rest of the market. Both are optional but useful.

There are a couple of things I'd have to contract out. Electrics is one of them. I would need to find a reliable spark. The only risk I see is once I have won enough orders to give up work, if orders dry up, I'll have to go back to engineering. It will take a few months to find job again. But then there's enough money in it to buy tools and build up a cash buffer to cover low orders. I'll hire a van as needed until I can afford to buy one. There isn't a huge capital outlay needed to get going.

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steve m

posted on 8/6/18 at 07:00 AM Reply With Quote
Not that ive ever been self employed, but I did make my self redundant two years ago, aged 56, and although its quite scary being out of work, and bills to pay, but money in the bank

I now work part time ish, and full time when I want some more money, delivering new cars around the country, its a zero hours contract, so I pick the days or hours I want to work, and the company gives me exactly that, and the reason I mention this, is if you could find something like this, ie delivering cars, it will supplement your business when the order book is low

Also you have to think about the winter, as a lot of people don't want work etc done in there gardens, as its wet cold and miserable, so you could be without an order for a few months, and no income

A friend who is self employed, buys and sells cars, as a sideline,

So my advice, would be to find a sidline business / job,

Good luck

steve





Thats was probably spelt wrong, or had some grammer, that the "grammer police have to have a moan at




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Sam_68

posted on 8/6/18 at 07:30 AM Reply With Quote
David Jenkins' advice is good rergarding book-keeping. That was the bit I found most daunting/tedious when I first took it on (and I had a business partner who was familiar with it, to hold my hand). There are several online packages available that are pretty easy to use (I use Kashflow - but find out what your accountant uses or is familiar with, as it sometimes helps if they can simply log on to your system themselves).

Steve m's suggestion of dipping a toe in the water to run it as a sideline, until you're confident that it will stand on its own two feet, is a good one, too.

Also echo all the stuff bi22le says, particularly about where work is coming from - the world won't beat a path to your door, no matter how good your product is. Website is a major factor and takes a lot of time, cost and effort to get right, both to set it up and maintain it. Other advertising costs (shows? homebuilding magazines? display models if you're marketing through garden centres, etc.?) can be substantial, too.

You can work from your garage until your neighbours complain about the noise of the power tools, then the Planners will slap an enforcement notice on you...

One minor technical point:

quote:
Originally posted by smart51
There are a couple of things I'd have to contract out. Electrics is one of them. I would need to find a reliable spark....


The buildings you create may - if they are designed and sited correctly - be exempt Planning and Building Regulations in most circumstances, but the bits of the B.Regs that apply to electrics still apply, regardless. And just because B.Regs don't apply doesn't mean that you're exempt H&S liability, so make sure you know the appropriate design standards.

I used to be Design & Tech Director of a timber frame company that manufactured these sorts of buildings (among others), and now run my own Architectural Design & Planning Consultancy, so U2U me in confidence if you have any specific technical or Planning-related questions.

It's a very competitive market, so your USP's will need to be good ones.

[Edited on 8/6/18 by Sam_68]

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peter030371

posted on 8/6/18 at 08:39 AM Reply With Quote
I have my own successful business, now over 25 years old and with 25 members of staff in a property that we own, and its been a good learning curve.

If I was starting again then I would do it differently but that's life. Best bit of advice I can get is find and use local small business advisers that are available for free (government or council funded), if they want your money (other than a few ) then they are, probably, not worth it for what you are trying to do. We are a member of the Federation of Small Businesses (www.fsb.org.uk) which we pay a small annual fee for and they do a start up help service for 129 for a year, that could be money well spent but you would need to judge that yourself.

A quick google of your area came up with this https://www.birmingham.gov.uk/info/50162/business_advice/1506/starting_a_business/1 and looks a perfect place to start and looks like its free

If you want it to succeed, and work hard at ALL aspects of the job (even the bits you end up hating...in my case marketing which IS the most important part of the business over and above all others despite what some might say, i know employee someone to do it for me ), then having your own business is very rewarding in many ways and not just financially

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907

posted on 8/6/18 at 09:19 AM Reply With Quote
During the 2008 crash the company I worked for made me redundant but made me work the notice and my holiday periods
even though we had nothing to do, and all stood round the one light and one heater we had on in the factory.

During this time by law I was allowed to go for any interviews or seek any advice without loosing pay. I literally went everywhere
I could think of for advice on self employment, business schemes, citizens advice, local gov schemes, my bank (Barclays),
other banks, you name it, I went there.

The only unbiased, common sense help and advice I received was from an accountancy business. A proper three story building
in the middle of town, not a bloke that does book keeping that works evenings at home but the sort of place that big business used.

I had a free half hour meeting with him and he became and still is my accountant.
He has saved me far more than I have payed him over the last ten years.


Paul G





The one and only member of the Suttol Owners Club. Now also the MX5 Owners Club. A few more in that one.

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myke pocock

posted on 8/6/18 at 09:36 AM Reply With Quote
I worked for myself many years ago and wish you luck. I found that sometimes you are doing things to pay the bills that you maybe dont realy like but the good bits make up for that. the only issue I would have in your details is working from home. I started out working in my garage until some nice minded person!!!!!! complained to the local council and I had a nasty letter from them. Your neighbors who may be good friends now could well end up enemies if you upset them with noise and dust etc.
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russbost

posted on 8/6/18 at 01:05 PM Reply With Quote
I would strongly second everything said about checking out viability, will work dry up etc etc & doing all the sums, I would add to that given the sort of business you describe - how seasonal is it likely to be, can you stand a 2 month "dry period" for Dec/Jan, can that be used sensibly to get stuff part built to speed build times when the work is there, I would again strongly second that a decent accountant is an absolute essential.

All that said, I left a very good job with Ford Mo. Co. some 38 years ago & have never really looked back, did we have problems thro' the early '90's recession, boy, yes, big time, however I was in a position to smi-retire at 44, spend far more time with kids & family & have since set up 3 further businesses almost accidentally - so no regrets

What is needed to set it up - if you're going to be a sole trader then tell the taxman within 3 months of starting trading & that's about it, don't forget insurance etc., as a sole trader you are liable if nothing is in place .... & get a good accountant, recommendation is always good

Good luck, hope everything goes well!





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Don't forget Stainless Steel Braided brake hoses, made to your exact requirements in any of around 16 colours. http://shop.ebay.co.uk/furoreproducts/m.html?_dmd=1&_ipg=50&_sop=12&_rdc=1

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Dick Axtell

posted on 8/6/18 at 01:55 PM Reply With Quote
Hi smart51,

Have read through these posts replying to your request for advice, and noted that several replies came from those who have already along the path of setting up businesses. bi22le's list of critically important factors seems to have provided a fairly sound starting point. His last item - "identify risks and plan for them" - reminds me of something I encountered during a business studies symposium. SWOT analysis - Strengths, Weaknesses, Opportunities and Threats. These will have to be identified, preferably by someone with a very clear view of your marketplace.

Regarding liability, I would definitely set up a private, limited liability company from which to start your business. Sam_68 mentioned the need for a website, and for someone to run it. Having been involved in both setting up and running a website, I fully agree with his comment that it will take up a lot of your time, more so if you deal with money online.

Lastly, but by no means least, good luck with your enterprise.





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David Jenkins

posted on 8/6/18 at 03:17 PM Reply With Quote
Another thought - learn all about managing cash flow. This is vitally important and can make or break a business, large or small.





The older I get, the better I was...

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smart51

posted on 8/6/18 at 05:01 PM Reply With Quote
Thank you everyone. All food for thought.

I have set up and run a website and social media for a local group, so I'm happy enough with all of that. Well except taking payment. Sorting out PayPal was a grade 1 PITA.

I agree 100% about the garage and the neighbours. It would only be until things get going.

I'm a software engineer by day, so I guess I could take up 3 month contracts during lean periods or over the winter.

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russbost

posted on 9/6/18 at 08:29 AM Reply With Quote
Only thing that I can add is that if you don't try, you'll never know ................. It does sound like you have a fairly secure safety net





Furore Formula Car - the only two seater modern Formula Car lookalike. I no longer run Furore Products or Furore Cars Ltd, but would still highly recommend them for Acewell dashes, projector headlights, dominator headlights, indicators, mirrors etc, best prices in the UK! Take a look at http://www.furoreproducts.co.uk/ or find more parts on Ebay, user names furoreltd & furoreproducts, discounts available for LCB users.
Don't forget Stainless Steel Braided brake hoses, made to your exact requirements in any of around 16 colours. http://shop.ebay.co.uk/furoreproducts/m.html?_dmd=1&_ipg=50&_sop=12&_rdc=1

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StevieB

posted on 9/6/18 at 09:17 AM Reply With Quote
I ran my own business for a while and enjoyed it very much - I'll definitely go back to it again as well since I loved the relative freedom it gave me and I found I had a whole different approach towards work when it was my own bottom line I was driving.

I did the same as David Jenkins - got my accountant to set up the business for me, talk me through the processes etc. and did my year end accounts. He also advised a lot initially about how I should run the business etc. so that over time I could learn to effectively self manage and then he'd only need to do the year end return, plus a half year catch up.

Things like quickbooks etc. are great as well now since they allow a whole new dynamic to account management and invoicing. Maybe also think about registering to take payment via PayPal Credit etc, as this will open up some avenues for your customers to take the plunge and place an order.

The thing I'd recommend most is to sit down and produce a very detailed business plan to look at not only what you was the business to be in the short term, but also what your long term objectives are and work them back to the actions you need to put in place now to achieve that. It feels a bit weird when you're running your own business, but running your own little workshop on a quarterly basis to review your progress is key. As a senior manager in a construction/engineering business, I quite often take a work from home day every few months and ask myself the following:

Where do we need to be in 5 years
Where do I need to be in 3 years to achieve that
Where do I need to be in 2 years to achieve that
Where do I need to be in 1 year to achieve that
Where do I need to be in 6 months to achieve that
Where do I need to be in 3 months to achieve that
Where do I need to be in 1 month to achieve that
What can I do this week to achieve that
What can I do right now to achieve that

I find this focuses the mind on what your long term objectives are and the road map to achieving this, but then brings the attention back to things you can action immediately to keep you on your way.

ETA - HSQE and insurances will be key for you as well

[Edited on 9/6/18 by StevieB]

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bi22le

posted on 9/6/18 at 10:32 AM Reply With Quote
All of this talk makes me want to start my own business.

I have a product in my head that I want to develop. It has a route to market and complimemtary product road map (spin off and associated sister products).

I need (already have outlined a plan to achieve these):

Development time
Patents
Capital Expenditure

Not as easy as chopping up some wood in your garage, but I do design products for a living so would like to think I know my onions.

So, what I really need is some time and bulls to crack on with it!!

Good luck OP . If you don't try, you will never know.





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Please read my ring story:
http://www.locostbuilders.co.uk/forum/13/viewthread.php?tid=139152&page=1

Me doing a sub 56sec lap around Brands Indy. I need a geo set up! http://www.youtube.com/watch?v=EHksfvIGB3I

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