I'm a little fed up with lining someone elses pocket so have decided to look at starting up a small business. It is based around leasing out equipment short term.
Just looking for advice and tips from people who have tried and are reaping the benefits and those who have learned the hard way.
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Starting up a small business, what are your experiences/mistakes
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Posted 2 years ago #
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start the company up, open a bank account etc and just put the odd bit of cash through it so you build up a credit history. You can do this years before you need the new company and you'll find it so much easier to get accounts etc. so it has a trading history.
Don't buy an off he shelf company. Its as easy to start one from scratch
Don't bother with limited company for now. Just trade as the name you want to trade under. The cost of all the accounting for a limited company is lots....
make sure all your reciepts can be put through the business so you lessen any tax you might pay. Look at what the MP's spend their expenses on to see just how much you can actually get away with.. :lol:. No probably not a good idea.
Posted 2 years ago # -
I've done it for 20 years now. It just evolved really, I didn't need to borrow money to set it up, just bought equipment as I went along, I already had enough to start and replaced that as I earnt. The benefits being time to use as you wish to use it, the downside - salary. If you need premises, think not only of the rent/lease or purchase costs, add 40% plus for business rates, like council tax but higher, every month with no late payments tolerated by the authoritories! Think hard, the grass may or may not be greener - just different on the other side.
Posted 2 years ago # -
It's hard hard work. Remember you're effectively now the MD, the secretary, the marketing department, sales, implementation, support, accounts. *(depending on what you'd be doing)
Expect very long days to start off with. One good thing to do is network, go to meetings and make contacts.. Think twice about joining a breakfast club to start off with as they're expensive, but there are many that you can turn up and pay £10 per meeting.
I set up a business years ago re-selling epos systems but the retail sector was going through a bad patch, so the timing wasn't good. Over 6 months I made some good money though through consulting to top up the sales.
I decided that it wasn't for me running a business so ended up taking a position with the company that developed the software that I was reselling..
Posted 2 years ago # -
Thanks for all the advice. It's so easy to talk about, so hard to start. It's a business that already has 4 main operators in this country. I don't think they are doing it very well though. No advertising, no chasing of customers and seemingly no "spark". From what I can make out, the current operators are just waiting for the customers to come to them rather than chasing, I'm sure I could offer a better service, product and ongoing business relationship with customers.
Not much needed to start up either, I am selling my motorbike and borrowing a couple of K. Think I just have to dive in. To be fair, I'm not looking at re mortgaging the house so there is no huge risk.Posted 2 years ago # -
Don't make assumptions. There may very well be good reasons why they are as they are.
My best advice is to do your homework properly, and very thoroughly before you get into it. Asking random questions on an internet forum is not research, as you may get daft responses. Like for example the cost of doing accounts will cost you loads as a limited company, clearly overlooking that the majority of limited compnaies in the UK have no need for audited accounts as their turnover is less than the threshold. The issue about going limited is about reducing your exposure to risk. Sole Trader = Unlimited liability, Limited Company = Liability limited to the shareholders share value and any personal guarantees or indemnities given by the directors.
Try going to the Business Link website, they have a fairly good new business start up check list.
Posted 2 years ago # -
I took the plunge a few years ago to start a business in Telecoms - lots of ups and downs.
My advice is make sure you are a Limited Company as a sole trader your personal assets are your business assets which is risky. Annual accounts for small Limited Companies can be a few simple pages.
Cashflow is a big issue - getting paid late can really cause problems and you will find your salary can be up and down depending on performance.
In general go for it and see what happens if it works great and if not then get a job.
Posted 2 years ago # -
Market research!
This is the bit a lot of smaller businesses overlook. I'm still learning after 6 years.
Always give your ideas due diligence and don't rely on gut feeling alone. A business plan should be your starting point for any venture. You will soon discover the risks, an idea of the commercial potential and whether your idea is remotely viable. The process will raise questions that will force you to do your market research.
Business Link sometimes run start up courses.
Running your own business is no walk in the park. A stable regular income form a permanent job is a luxury, but you have to let someone else boss you around. If you can become independent and successful, it's the way to go.
Posted 2 years ago # -
It's hard work at the start. You may not actually earn any money for the first year or so. Holidays maybe few and far between. The customers are always right and can drive you mad, staying calm is the key here. Cash flow is always a problem.
However being your own boss is very rewarding. You can have time off when you like.
I started mine up when I was still in a permanent job, building up my customer base. Also this gave me time to start building up a relationship with my suppliers too
I love being self employed. Going back to having a boss and a strict timetable would do my head in.Good luck.
Posted 2 years ago # -
Bunnyhop, G and spongebob - would you be so good as to give a few more details about what you do. A little insight would be really helpful. You know, just industry and things as it will make it less abstract for us?
Huge Ta.
Posted 2 years ago # -
Certainly, I'm a partner in a small business making and distributing high end bathroom products. We originally started up in the back bedroom of my partners house about 10 years ago, have moved twice in ten years and now in a 10,000sq ft unit with 8 staff.
Posted 2 years ago # -
Lesson's I've learned?
Cashflow is king. Make friends with your bank manager, and make sure he/she has a realistic picture of the business you're in. Realise that you ARE a salesman whether you like it or not, whatever your business does is just "the product". What you do and say in front of customers is what will make the difference. Don't rely on others, they've not the investment in the business that you have.
Posted 2 years ago # -
nickc-you are so right about not relying on others.
I had a freelance fitter, who turned up when he felt like it ( not when he was booked in). He constantly lied to me and my customers. Unfortunately his workmanship was really good and there wasn't anyone else in the area that I could use, so my hands were tied.
I now end up giving out his phone number to a customer and leave it up to them to sort out any fitting arrangemnets.
menothim-I'm a softfurnisher ( of the highest quality, of course :-))Posted 2 years ago # -
Forgot to mention, if you are a soletrader it's worth looking into freebanking.
Posted 2 years ago # -
Been a sole trader most of my working life with a few breaks in paid employement. Its had its ups and downs, but I'd never go back, I'm probably unemployable by now anyway.
Three bits of advice I have picked up over the years, not that I can claim to have kept to them all the time:
Profit is an opinion - cash flow is a fact.
Some days you have to sell your breakfast so you can buy your lunch.
Don't f*ck with HMRC.
Posted 2 years ago # -
Have an exit strategy.
Don't gamble relationships on it.
Always plan what you are going to do next.
Don't read any management books or go on any courses.
Shop around for your business bank account.
Posted 2 years ago # -
Avoid partnership as much as possible. Know the technical work yourself rather than relying on others. I once relied on some software programmers only for them to stab me in the back by doing the business behind me.
Posted 2 years ago # -
Englishmastif- what you say sounds ideal i.e. no capital risk, you only need to "buy" a piece of equipment when someone wants to lease it, but you need to get your finance sorted, which at the moment isnt the easiest!
But good luckPosted 2 years ago # -
Will the business continue the same way without the current owners ? Whats its assets and liabilities ? What don;t you know ? <- thats the killer one. If they are spectacularly lazy and unimaginative then you have a sitter there, unless there is something you don;t know.
As said above there is some good advice in here. Cashflo wis indeed king, as is the ability to not panic when things get 'soft'. Do not expect to become instantly rich but do expect to become instantly interested in the business performance. Don't think if it as your money, think if it as an asset that will appreciate over time the more you put in, don't pay yourself too much, take it out later, have a big personal mortgage and raid that every month
, do go as a Ltd company and if it is a business where in theory you could be sued at some point then organise your affairs to keep everything you own out the way (i use trusts and secondary companies - I now own absoutely nothing :D), get a very good business plan written, go for it !
Posted 2 years ago # -
I run a proof reading company specialising in spelling
Posted 2 years ago # -
Cheers for all the replies, very helpful. I am looking at getting the web site designed at the moment.
To clarify, i am not buying a going concern but starting up a new company from scratch. I think I can finance the first couple of months with the sale os my bike!!!!!!!!!!:-( If the clients come my way, I will then be confident enough to aproach a bank and will have a proven, if small client base.
I am also in full time employement but have 4 days off in 10, usualy weekdays so it is wasy to work towards the start up.Posted 2 years ago # -
Get the money up front....
Don't assume people will pay you on time. Loads won't, and will need 'reminding'. A contract clause charging X% per day over a certain time limit, helps to encourage prompt payment.
And always have something for a rainy day.
Posted 2 years ago #
Topic Closed
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