Starting your own business

Anyone done it?
What did you do?

In need of inspiration.

Bought a run down launderette Nearly four years ago. Between pandemics and soaring gas prices it’s been an unusual period to set up in, if I’d had a business plan it wouldn’t have covered the reality of recent times. Luckily I’ve been winging it all along and doing ok.

Upsides. It still takes money while I’m out riding my bike.

Downsides. Never know when I’m going to get a call because there is a problem. Difficult to take a holiday.

No regrets though, I was utterly fed up with office life

I’ve started three. Two with friends/people I’d worked with. This time just me (and my better half). Things I learned:

– running your own gig with your friends can end badly in terms of friends and the business
– (at first) it’s all consuming, it’s all you think about, I started my first when my kids were very young and I definitely missed out as I prioritised the business
– be clear about what you want. First one we started (when I was a lot younger), we had grand plans, ended up being about 50 people but we were always just chasing business. Didn’t really have an exit strategy. Also when it gets big, I didn’t want to be in it as all the stuff I liked doing, other people were doing and all the stuff I didn’t want to do, I wasn’t very good at (people mgt specifically!)
– Now I run a ‘lifestyle’ business. It’s not saleable as it’s just me and my wife. I am trying to semi-retire and have taken on (not employed) an associate who I’m gradually handing work with deadlines to. I’ll stick with the coaching/mentoring as I like doing it and it’s not time pressured.
– Even after 20+ years of working for myself, I still think ‘what happens if nobody wants what we sell’ or ‘can I really do this work to the standard I set myself’. It never goes away (nor should it)
– Finally painful as it is to pay for it, you have to be realistic about getting help for stuff you’re not good at. Accountants – easy, marketing/sales etc not so easy but I’m glad I did- made a huge difference to us, not working any harder but doing stuff we want and there’s more of a pipeline.

Still hardest thing for me is to switch off. Sure you can take a week off but you’re not earning (unless you’re doing stuff that doesn’t need you, we’re moving into that now) and you worry about crashing your bike and not being able to work the next Monday.

Anyway TLDR- it’s hard work, when it’s hard it’s really hard and when it’s great, it’s amazing. I wouldn’t change it and I’ve enjoyed 90% ish of everything I’ve done, met some great people, worked on some very cool stuff and have zero corp politics/admin/big company stuff. I’m ex big4 consulting and when I left all I knew is I wanted to work 100% differently to that.

Yes.

Content writing and management agency.

Saw a big opportunity with lots of demand for what I had a track record of doing (and had good contacts), took redundancy and convinced one of my colleagues to come in with me, we had a great five years or so and then gradual decline as the internet giants hoovered up all the ad revenue and client budgets shrunk.

Wouldn’t do it again unless I saw a similar good opportunity and felt I was well-placed to deliver.

Yep. Slightly complex situation at my last proper job meant I had some free time and a bit of cash. I set myself up doing the same job but on my own. Built a website, did a bit of linked-in and some other industry related social media (borderline spamming, maybe). First year or so was slow. picked up some random jobs using my tech skills in another field that kept the bills paid. Wife was also working full time. Within a few years I had a steady stream of work that came in without effort from me. Wife then left to go self employed too. We now both have plenty of work coming in and can be fairly choosy with jobs and hours. Sometimes miss the teamwork but love the flexibility. Money is about the same as I was on when employed but for a lot less hours and a lot less politics. Busy now until the summer. Don’t know where the next job is coming from, if nothing comes in I’ll take the summer off but I’ll be surprised if that happens.

Downsides. Never know when I’m going to get a call because there is a problem. Difficult to take a holiday.

This is true for me too. Whenever I complete a job I’m slightly on edge waiting that phone call that something has gone wrong. It happens in my line of work. I’m always sort of always working, checking emails etc. Easily done on a smart phone so I can take time off but its never 100% time off. Doesn’t bother me as I get plenty of free time.

Yup – did it 18 years ago with a colleague who was also a cycling buddy – we had nothing, no investment, just a £5k loan from our bank to buy some Macs. It’s had its ups and downs over the years (a fortuitous inheritance coming at the same time as the financial crash in 2008 meant I could keep the business afloat – I did get all the money back though) then the sheer terror of March 2020 and closing our doors without knowing what would happen next. Fortunately we have come out of the other side stronger, now employ 16 staff and turn over around £1m and we haven’t borrowed a single penny off anyone in that time (other than that initial £5k).

I still work as hard now as I did when I was employed – possibly more so, but I have always enjoyed what I do so it doesn’t bother me.

Would I do it again? Absolutely. I wish my mum and dad were around to see that I make a success of something and that is my one big regret (if that’s the right word in this context) in the whole journey – my dad always wanted to set up a business but never quite dared take the plunge and I would like to think he would be proud of what I have managed to achieve.

Yea, twice. Would do again, no problem. It’s so easy to setup a business in the UK (compared to other places).

1. Find a niche/usp – there has to be demand for it (do some market research first)
2. There is no ‘hometime’, but you get to make all the decisions.
3. You pretty much get out what you put in – have some morals/standards about how you operate, though.

Start small, grow it organically. Get as much help / advice as you want – you don’t have to follow it.

I imported new cars from Europe to the UK and had a firewood processing/gardening business.

I bought an existing village shop with my wife 7 years ago. It was run as a lifestyle buisness at the time, had very very load annual turnover and was failing. Initially she ran it with staff, I had a good middle management job (but high stress) and good wage separately. Now we both run it along side an Airbnb – I got p’d off with corporate life and left 5 years ago. The buisness is doing far better than it was, but there’s always room for improvement.

It’s hard work, long hours, but very little stress and the ‘easiest’ day to day job I’ve every done. It’s also extremely rewarding, and tbh I really enjoy the community aspect, something that I wouldn’t have thought I would have done. I’m generally the buisness brain and wife is generally the customer service end of the buisness.

Down side are little to no holiday (at least together), ever…. We take a family week in January for a UK trip and that’s it, shutting the shop for that week. Very long hours, & like rubber buckaneer your tied to the buisness so if something does go wrong and your not around you have to drop everything. Most weeks are a 7 day working week (Saturday I prob work 4 hours, same on Sunday).

*** I’M NOT AN EXPERT ON THIS, BUT THIS IS THE ADVICE I’VE BEEN GIVEN ***

Self-employment: you are personally responsible and liable for anything that goes wrong.

PLC etc.: you aren’t personally responsible or liable for anything that goes wrong (the business is a legal entity in its own right). if something goes wrong, your business itself is essentially sued (not you personally) and your house/savings are safe.

A PLC allows you to take risks that you would never even consider if you were self-employed.

If you are a Director of a PLC, you take 1/12th of your annual tax-free allowance as a salary each month (so you’re not paying a penny of tax), and then top it up to your desired amount via. dividend. Dividends don’t attract as much tax or NI as a salary or personal drawings from self-employment – so as a Director you can earn more and pay less tax whilst you are doing it.

*** I’M NOT AN EXPERT ON THIS – SEEK THE ADVICE OF AN ACCOUNTANT OR LAWYER***

if something goes wrong, your business itself is essentially sued (not you personally) and your house/savings are safe.

yeah I wouldn’t rely on that being the case if I were you 😬

Small scientific consultancy (ltd co), basically a vehicle to enable my wife and I to get paid by a couple of colleagues out of some spare grant money they had. Very easy to set up and run, no costs really other than the minimal charge of a business bank account (my wife does the accounts). Currently going dormant, thanks Brexit. But it was fun for a while.

PLC etc.: you aren’t personally responsible or liable for anything that goes wrong (the business is a legal entity in its own right). if something goes wrong, your business itself is essentially sued (not you personally) and your house/savings are safe.

A PLC allows you to take risks that you would never even consider if you were self-employed.

Be careful… if you’re sole (or only a couple of) director and one of a very small team there is case law (from 2009 I think) that said the action of the company and the action of the director are as good as one and the same and you can become personally liable if the company can’t cover debts owed in some circumstances. A PLC may not be the barrier you might hope for in a small company. I have a LTD Co for a project, it’s financially insignificant and was really set up to distance me from liability risks but since setting it up in 2008 I’ve become less confident that’s the case for very small + sole director businesses. IANAL / it only applies in some areas of responsibility.

More general advice, regardless of whichever legal form you business takes:

1. people NEVER pay on time, and you’re going to spend a lot of time & effort chasing payment. Even if your invoice and the contract states 30 days, in reality there’s nothing you can really do until 90 days have passed. You won’t believe how lame the excuses for non-payment can be.
2. cashflow is EVERYTHING. It doesn’t matter if you have a cheque for £30m that’s going to clear on Wednesday, if it’s Tuesday and you need £10 you don’t have it, you’re f**ked. And there will be no shortage of sharks that are just circling, waiting for people like you who find themselves in that position, so that they can jump in and shaft you.
3. the bank is not your friend. It’s the bank’s job to paint you into a corner where they can **** you furiously. What they refer to internally as “trapping customers in the circle of debt”. By way of an example I had £13k sitting on a Company Credit card. The bank pulled the plug without warning, and transferred me to another department that specialised in ‘helping’ clients in my position. ‘Helping’ involved raising my previous APR from 14.9% to 34.9%. I was very fortunate that I was in a position where I was able to clear the balance completely and walk away. They seemed quite surprised by that – quite perturbed in fact. They did everything they could to try and stop it from happening. But for every one of me, the bank knew there would be 100 more individuals who had no option but to bend over and get reamed. This practice would later be revealed as business strategy, and the scandal got nation-wide press coverage – but not before it had ruined countless businesses and lives.
4. try to bank at least 6 months of takings. You’ll be able to sleep well at night knowing you are safe for six months, and if your income streams dry-up you’ve got six months to try and figure out a solution.
5. legally, you can’t charge interest or fees on late payment of invoices, but legally there’s nothing to stop you offering a voluntary discount for timely payment. If you would normally invoice £3k for project/product/service X, invoice £5k instead, with the option to qualify for a discount of £2k if it’s paid by a set date.
6. the bank is not your friend.
7. the bank is not your friend.
8. the bank is not your friend.
9. the bank is not your friend.
10. the bank is not your friend.

I did many years ago set up a decorating business with friends

It really did not suit me at all.  I discovered I need for my own piece of mind to know where my pay is coming from and not to have to wait for folk to pay me

It didn’t last long and fortunately the 3 of us didn’t fall out over it.

Its not for me

If you want to keep it small then the main priority is to do something you enjoy. Happiness first, money second.

If you want to make a killing and are looking for inspiration – then you are too late already! You’ve missed the boat. :-)

yeah I wouldn’t rely on that being the case if I were you 😬

Good to know.

I’ll run that by Business Gateway again, entirely possible that I’ve picked that up wrong, the advice on the million and one options was coming thick and fast – hence the warning on the first and last lines of my post.

I’m planning on forming two companies in the next month. If forming a company doesn’t provide me with that level of protection, there’s no point in doing either at all. One company is related to healthcare/prescriptions, whilst the other involves explosives – so there is ample opportunity for things to go horribly, horribly wrong.

No way I’m risking what I already have, I’d rather do nothing and be safe.

One company is related to healthcare/prescriptions, whilst the other involves explosives

They sound like mutually beneficial companies to me.

Blow ’em up and then fix ’em up.

set up 4 so far, 2 are still operated by me and third by my other half and myself. The 4th I would up with no loss (but no gain) as it wasn’t going anywhere. Just about to set another one up for another new venture.

I would recommend:
– Setting up as an Limited company with you and whoever else as directors. Someone mentioned a PLC – that’s a publically traded company, not where you’ll be at (at least initially!). I personally would avoid being truly self-employed, or setting up as an LLP. A Limited Company should provide your personal assets with protection – however, as someone mentioned above, if the failure of the company can be proved to be the direct fault of your misconduct, they will come after you. Genuine ‘bad’ business decisions don’t fall into this by the way!
– Actually have a business plan – timelines, goals & exit strategy/end game.
– Pay yourself. One of the businesses is a pub, and one of the provisos was that we paid my other half a proper wage to run and manage, and if we couldn’t we would walk away – in that particualr sector there are too many owner/operators hoping to pay themselves as dividend from profit that never comes. Don’t fall into that trap.
– Get a good accountant – they will save you many, many times more than you pay them.
– Don’t dig holes – if what you’re doing isn’t working, solve the issues. If that doesn’t work, then get out. Don’t dig yourself into borrowing just to pay the bills in the hope that it’ll turn around when you’ve tried everything.
– Related to my first point – keep your nose clean. Do things the right way, and in theory you won’t get hunted down. Also related to ‘get a good accountant’ – check with them the right way to do things of a financial nature. They love nerd questions!

Be prepared to work hard to get where you want but also know that it’ll be your decision if you want to go ride for an afternoon, then you only answer to yourself and you can catch up when you want. It will test friendships if you go into business with friends – true colours will reveal themselves for good or bad!

Anyone done it?
What did you do?

In need of inspiration.

I’ve done it twice.  If you need inspiration its not for you.  I often have friends say they wish they could come up with an idea to run their own business.  I’d say the people who are successful at it have an attitude thats the opposite from needing inspiration – they need calmed down to stop everything the see being their next entrepreneurial idea.  However I’d say you either need to be good at marketing and sales type stuff or already have a very obvious customer base who know and trust you because of who you are.  Doesn’t matter if you are cleaning windows or launching satellites – your buyer has to know you exist and want to buy from you.

I think lots of people think it would be great but they are often only thinking about the upsides like nobody to answer to*, incredible flexibility**, and maybe some tax advantages*** etc but they don’t understand the downsides – like panicking how you will meet payroll this month because your customer didn’t pay on time, making people who are probably friends redundant during a crisis, having the VAT man turn up for an audit (even if all is in order), every problem is ultimately your problem etc.

* unless you are in the lucky position of having enough cash to fund it, there is always someone to answer to – a bank, another shareholder, even just the huge customer you can’t afford to piss off.

** owners are essentially 24/7 365 “on call”.  You can be 3 days into your family holiday and if shit happens you are likely to get at the very least disturbed, and possibly need to go home to sort it.  Of course its possible to lifestyle it to avoid this, but only if you have nobody to answer to!

*** A lot of the tax advantages of old have been clamped down on (IMHO quite rightly), unless you want to play fast and loose with the rules doing dodgy off book stuff etc.  Anything you do that looks good from a tax perspective almost always looks bad from a mortgage perspective etc.

If forming a company doesn’t provide me with that level of protection, there’s no point in doing either at all. One company is related to healthcare/prescriptions, whilst the other involves explosives – so there is ample opportunity for things to go horribly, horribly wrong.

No way I’m risking what I already have, I’d rather do nothing and be safe.

For a lot of things forming a Ltd company will protect your personal assets BUT:

– not if you are shown to have acted improperly as cx_monkey says (e.g. continue to trade whilst knowingly insolvent and you’ll be liable)

– not if you personally have done anything illegal (with both explosives and healthcare theres potential for YOU to break the law as well as the company)

– not if you have had to make any personal/directors guarantees – which are not uncommon if banks are involved

– the tax man often starts from the presumption that your were scamming him and expects you to prove otherwise.

Not wanting to be facetious but getting insurance in either of those fields for a business that gets its legal advice from ‘Business Gateway’ and where the director knows there is massive opportunity for stuff to go wrong but wants to cover his own ass first and foremost is going to be interesting.

Yep. nearly 2yrs ago. as a civils/drainage/flood design consultancy

got 3 employees now. software costs are a bugger.

i`m loads happier but the nagging worry about work/cashflow never goes. spoke to a mate who runs a carpentry business (3-5 employees) and he said teh same. outsourse accountancy/payroll seo/marketng etc. we focus on the work that needs doing.

happily take time off for hols and biking. flexible working.

Loads of money and no ideas?
Buy a business!
https://uk.businessesforsale.com/

I’m in the process of doing so for a 2nd time.

1st time round I ran a small design consultancy took me 3 years to get the business properly working. Then we had our 1st kid and I decided to take a job as an employee for the security of income.

This time round I am developing analogue film cameras to sell to photograph enthusiasts. Got backed on Kickstarter last year and am just in the process of building the 1st batch of 200 cameras! Still holding down a full time job while I get the business off the ground. At some point soon I am going to have to switch to full time… can’t wait as it is a business I am really passionate about. Definitely benefits from my skills experience and passion.

“Yep. nearly 2yrs ago. as a civils/drainage/flood design consultancy”

Cool, I had no idea! I started my own business (related to my obsession of bass playing, music and sound) somewhat by accident 15 years ago (whilst working in sales for a multinational).

I’m never sure what to say when someone says they’d like to run their own business – I suppose the main thing I’d be concerned about is having a real world USP (not just some marketing fluff – see last night’s Apprentice for some fine examples of that).

Don’t underestimate the amount of tiresome admin or all the hidden costs – and remember that everything you spend means you need a whole lot more turnover to generate enough profit to pay for that spend. I’m glad the core of my business is something that I’m very good at (audio equipment design) and something I care a lot about – so the good stuff can be fun and certainly plays to my strengths.

The money side of it can be v stressful – and I’m pretty laid back, optimistic and came from working in financial sales with difficult targets and salary dependent upon hitting goals.

I did spend a few days this week making demo videos with a sparkly new guitar, so there are definite upsides! 🤘 😉

– running your own gig with your friends can end badly in terms of friends and the business

make friends through work but don’t work with friends

Not wanting to be facetious but getting insurance in either of those fields for a business that gets its legal advice from ‘Business Gateway’ and where the director knows there is massive opportunity for stuff to go wrong but wants to cover his own ass first and foremost is going to be interesting.

On the explosives side of things, the safety of my product has to be verified by a qualified third party who provides a certificate. As long as my product doesn’t vary from the sample I’ve sent them, there is very little that can go wrong.

On the medical/prescription side of things, the main concern here is getting hacked/GDPR infringements. The medical data that the company will be handling will be HIGHLY confidential. There is also the chance that I’ll need to host payment processing. I’m advised that these two types of data are the most tightly regulated that you can get.

Should be interesting…

One company is related to healthcare/prescriptions, whilst the other involves explosives

They sound like mutually beneficial companies to me.

Blow ’em up and then fix ’em up.

can be the same thing – nitro glycerine is available on prescription