What are things to consider when starting out on your own?

[ppelec100]

There are lots of issues around being a business, even down to choosing to be a sole trader, or a Ltd company, etc. They all have advantages and disadvantages, and really some of the decisions will need advice from a professional accountant, etc, depending on your circumstances and plans.

Make sure you have a separate account for your business. You are supposed to open a business account for this, and if Ltd company then no other options but all you get from a "business account" is lots of charges that you don't get on a personal account! So if doing small stuff first then at least open a separate account for work and remember that is for work, it is not your money, it is your business' money. You, as "your business", can decide to pay yourself money and obviously you need to, but keep them separate for accounting visibility or you will get in to all sorts of trouble down the line.

Accountants will advise you get familiar with some packages like Xero, Quickbooks, etc as they will save you time and money in the long term and HMRC now insist on digital tax returns for most people. We use Xero as our accountant recommended that and provides support for it, but whoever you have for advice might have one that suits you better.

As above, get insurance for your work. It can save your bacon if something goes wrong and letting folks know you have it is the mark of a professional.

If doing small stuff you probably don't need trade accounts at multiple wholesale outlets but having at least one with someone local who gives you decent prices (i.e. not CEF!) is very desirable. But you probably will find the likes of Screwfix are good for T&E cable, etc.

Same with scheme membership. For jobs falling under Part P it makes sense to pay the £500-ish per year and jump through the hoops due to the saving of not having to get LABC to certify stuff at extra cost as you would save the cost over a handful of such jobs, but for repairs and small jobs not worth bothering at first.

Thank you once again for an in depth answer.

I will have a look at some of the stuff you’ve mentioned

 

[Dartlec]

Thank you for this reply this helps a lot. I’ve seen rhino on bundys YouTube before. I’ve also seen tradify not sure if it’s him who mentions them or artisan or maybe both... have you ever used the platform?

I had a trial with Tradify but never found them that useful as a sole trader - But I already had my ways of doing thing fixed so it was hard to organise everything around it.

I'm pretty sure Artisan did a video on it. You may want to keep costs down as much as possible when you first start though.

 

[telectrix]

don't be conned into paying for ads in magazines for children/schools/ etc. at £200 a year. these are usually offered over a phone call, one is called forresters. nobody ever sees them even if they actually get distributed.

 

[Mike Johnson]

And get a decent answer phone, so you can switch off your mobile, nothing more annoying to a client than you/they being interrupted by your mobile and whilst working having to stop to answer it, take time during the day to access the answerphone machine and reply at your leisure.

 

[pc1966]

And get a decent answer phone, so you can switch off your mobile, nothing more annoying to a client than you/they being interrupted by your mobile and whilst working having to stop to answer it, take time during the day to access the answerphone machine and reply at your leisure.

I know a guy who had that on steroids - he paid for some answering service that took down the call details, etc, then faxed him at some point in the day, then at 4pm they had time set aside to deal with all of the day's queries and call folks back ,etc.

It seemed a bit excessive compared to an answer phone but I think his argument was folk were happier to get some secretarial staff to speak to to provide details of number and reason for call, etc.

 

[Mike Johnson]

These type of office accommodations seemed to spring up around the beginning of the 2000, they usually had office space available to allow meetings with client's and provide secretary service's and even accountants if needed, one of my colleges started one in Kent, but that went by the way as he could not get enough sole traders to make it worthwhile and it was expensive.

 

[Intoelectrics]

Some really great advice so far!

I think the key thing transitioning from employed to self-employed is that all of a sudden you are lumbered with the full responsibility. This can be very stressful and worrying, and certainly takes up masses of time, that you probably had spare previously.

Also as its already been stated time is money! So you must cover all associated costs within your hourly rate. This is something Joe public often fail to realise and appreciate, but don't give in and go cheap or you will find yourself a very busy fool!

I'd also consider tool and equipment insurance cover in addition to public liability. I've seen tradespeople get all their stuff nicked and its cost a pretty package to replace!

There are some benefits to being self-employed, but it isn't all rosy. You will get stung, you will get complainants and you will worry over everything. But you will learn to deal with all of this over time.

Good Luck!

 

[Timbo]

Get yourself a domain name for email address. To me nothing screams cowboy or cheapskate so much as a gmail or outlook address on your van.
Ideally decide on your trading name first to direct your choice of domain name.

 

[Mike Johnson]

I also found having a separate office is beneficial you can leave your work behind and it will still be there when you return in the same place you left it, many I know (myself included) had a room in the garden that was out of bounds to everyone else in the household, it also meant when you went indoors you had officially stoped work, using a spare bedroom does not work as well.

 

[pc1966]

Get yourself a domain name for email address. To me nothing screams cowboy or cheapskate so much as a gmail or outlook address on your van.
Ideally decide on your trading name first to direct your choice of domain name.

This!

Even if you are not your own business, having an ISP-independent email is a really good idea. In fact, get a few so you have one for highly spammy sites, etc, etc.

If you check around you can register your own domain (the "joeblogs.co.uk" part of web site www.joeblogs.co.uk and email [email protected]) for something like £10/year, and then you can get hosted emails for something like £5/month or so. It might seems like an unnecessary expense to begin with but it saves you trouble long term if you change provider, etc.