New Business Advice

Woblee

Woblee

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Lee
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I thought of asking in the business section but it isn't really photography related.



My other half is pretty handy at face painting and there doesn't seem a lot of other people doing it in our local area. So she has decide to take on doing birthdays, weddings, fetes, etc. We already have sorted PL insurance and starting to amass the gear to do the job.

BUT, neither of us know a bean about running a business, so where do we start? Is there an idiots guide that we can follow?

The main things we need to learn about is tax and registering as a business. Should we just phone up our local tax office or is there someone better to speak to? Also does anyone provide grants for new businesses?
 
She should join Facebook Groups, get flyers made up, talk to local play areas to see if they need people or if she can give them some flyers.

Website would be good, Facebook page (with regular different designs).

Does she do any other work or will this be her only employment?
 
for goodness sake do not ask the tax office for advice,I did and the advice they gave me was not good. Ask an independent accountant,he/she will point you in the right direction and tell what you do and do not need to pay, how to pay it and when.

Have you decided on whether it will be a Ltd company,sole trader or partnership? You can register your business on line using a plethora of companies that will do it for you for a few quid.

There is a whole host of information on the net regarding setting up a business and keeping it running.
 
Blimey, I've just had a shock! In the past I have recommended that people starting out also look at Business Link - it contained a wealth of information, documents and links to relevant government websites. But it's gone and has been replaced by an absolute abomination of a site call gov.uk!

Some of the information still appears to be there but looks like it's aimed at a 5 year old :(
 
yeah the govt cut the funding for biz link as part of the 2010 austerity package - way to stimulate the economy mr cameron :shake:

By the way if the OPs girlfreind is under 30 the princes trust may be worth a look, also most banks have small business advisers, you local chamber of commerce may have someone, and HMRC are usually suprisingly helpful so long as you play fair with them ( I note mex's post to the contrary above, but my experience was positive, and it does also depend on the scale of the business - chances are ltd co will be overkill for someone doing a bit of face painting - sole trader is usually your best bet if its simple and low key)
 
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Thanks for the replies.


We have a Facebook page and a website up and running (although we do need a bit more content and tons of photos).


Technically she is still employed, but not working currently.


I think she would want to be classed as sole trader/self employed rather than a full blown company. Could it be changed later if it really took off?


Yep, under 30 so that may be worth looking into.
 
Woblee said:
Thanks for the replies.

We have a Facebook page and a website up and running (although we do need a bit more content and tons of photos).

Technically she is still employed, but not working currently.

I think she would want to be classed as sole trader/self employed rather than a full blown company. Could it be changed later if it really took off?

Yep, under 30 so that may be worth looking into.
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Yes no problem.

Wouldn't be worth it for a while though.
 
Speak to an accountant. Sole trader is still a 'full blown company', its just a different sort compared to Ltd, LLP, etc, and will inevitably be the way to go as a small business dealing with the public (as opposed to having more of a business to business sales situation). You'd need to tell HMRC that she has established herself as a company (sole trader), I think this has to be done within 90 days of starting trading. Limited companies etc are unlikely to ever come into it unless it grew very large and started employing lots of people, etc.

In the meantime, it's very simple. Just keep accurate records on a spreadsheet of every sale and very cost and mileage covered in connection with the business. Keep receipts for everything she buys, don't worry about the 'can I claim for this', just record it and an accountant will advice you on what's what. When it comes to tax, assuming she is PAYE in her day job and earns enough to be paying tax on that already, she will quite simply pay tax on any profits the business makes. Ideally have a seperate bank account for the business to keep things clear and simple, a proper business account is ideal but just a regular personal account work be fine too at this stage - the important thing is that it's ring fenced and not getting lost amongst her personal finances.

But again, speak to an accountant as they will be able to offer the best advice according to her exact situation.
 
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Legally a company and a sole trader are very different. A company is a separate legal entity to its owners and if a company pays its employees it must comply with PAYE regulations. It can also reward shareholders by dividends , provuded it has sufficient distributable reserves.
 
Agreed. Sole trader is the simplest and most appropriate vehicle for your wife. Forget about companies, for now anyway. I also concur with consulting an accountant. He/she will explain your legal obligations, and will give you good advice about starting a business, and the tax implications. This is money well spent, and the accountant will also handle the tax returns for you if you like.

It's in your interests to know and understand the basics of running a business, so I'd check with local colleges - or look for distance learning programmes - for courses that might your requirements.
 
Great information, some food for thought.

We do have an accountant in our extended family so might start by bending their ear a little first before we start parting with any money :)

Have had a quick look at the HRMC site, and noticed that we have 90 days to register as a sole trader from when she first took paid work.



You never know, when she get's established I might have to start offering photography in with the deal, lol.


Thank you all again, it's been very helpful.
 
I would suggest she gets onto a site like Netmums which is very popular. If she can get a mention on there in her local section it may help. Maybe something to do with birthday parties as mums would be interested in researching that.
 
madferrit said:
I would suggest she gets onto a site like Netmums which is very popular. If she can get a mention on there in her local section it may help. Maybe something to do with birthday parties as mums would be interested in researching that.
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Cheers, will look into it.
 
The Federation of Small Businesses is worth the membership fee. Apart from anything else, she'll get free banking through the CoOp bank.
 
Nod said:
The Federation of Small Businesses is worth the membership fee. Apart from anything else, she'll get free banking through the CoOp bank.
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Cheers. We have been thinking of a separate account so worth looking at.


Also going to look on peopleperhour and get a logo designed so we can use it on advertising and the website
 
Shine On said:
Speak to an accountant. Sole trader is still a 'full blown company', its just a different sort compared to Ltd, LLP, etc, and will inevitably be the way to go as a small business dealing with the public (as opposed to having more of a business to business sales situation). You'd need to tell HMRC that she has established herself as a company (sole trader), I think this has to be done within 90 days of starting trading. Limited companies etc are unlikely to ever come into it unless it grew very large and started employing lots of people, etc.

.
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thats possibly the most confused advice I've seen on this subject - just forget about companies, sole trader is not a company

also you can be a sole trader even if you are trading with businesses

You are right that she needs to tell HMRC that she has started trading, but if she is a sole trader she will not have 'established herself as a company'

I think what you may have meant is that if she is using a business name she'll need to advise HMRC what it is, but it still isnt a company and shouldnt be portrayed as such.

There are various reasons to establish a limited co - most of which have nothing to do with employing others - its mostly about limiting liability, reducing the ammount of tax paid and so forth - but it will be unnecesary for her to go into this just yet
 
All this advice on whether or not to set up a limited company is superfluous. Only a professional (accountant, financial adviser etc) with access to ALL of the facts about the OP and his wife's financial affairs will be in a position to advise.

For all we know, there could be compelling reasons why a limited company IS a good idea in their particular situation. Unlikely I know, but possible, yes.
 
I appreciate the people taking the time to advise us it's a good help.

The bit about limited companies and the like is so that she could trade under a 'name' but from what I gather she can still be a sole trader and declare "Jennni sommat trading as Jenni's Business". We aren't getting hung up over it being classed as a company, we are starting small and wan't to make sure it's all 'official'.

We got suggested http://www.blueorchid.co.uk/ so we have applied to them, and also applied to the Prince's Trust. Still got a while before we need to contact HMRC so will wait until we hear back from either of them first.
 
Yeah you can have a trading name as a sole trader - the principal difference isthat as a sole trader the "business" doesnt exist as a seperate entity so you are personally responsible for all debts and liabilities.

Also a sole trader simply pays income tax on their profits (and NI although you can get an exemption from the flat rate if you are a low income biz) whereas a ltd company pays a company tax ( I forget the exact name) which can be less in some circumstances.

In short if you are taking a lot of money, borrowing a lot of money, doing anything substantially risky, or employing a lot of people - then a ltd Co can be the way to go (though if you reach that point get accountancy advice first)

Someone setting up a simple business doing a bit of face painting , has no real need to be a ltd company (unless there are very specfic things that havent been mentioned here)
 
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big soft moose said:
Yeah you can have a trading name as a sole trader - the principal difference isthat as a sole trader the "business" doesnt exist as a seperate entity so you are personally responsible for all debts and liabilities.

Also a sole trader simply pays income tax on their profits (and NI although you can get an exemption from the flat rate if you are a low income biz) whereas a ltd company pays a company tax ( I forget the exact name) which can be less in some circumstances.

In short if you are taking a lot of money, borrowing a lot of money, doing anything substantially risky, or employing a lot of people - then a ltd Co can be the way to go (though if you reach that point get accountancy advice first)

Someone setting up a simple business doing a bit of face painting , has no real need to be a ltd company (unless there are very specfic things that havent been mentioned here)
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Brilliant, think you have hit the nail on the head with that.

The identity is just so it looks (IMO) a little more professional and to link it with a website. Hopefully financially we won't be sinking loads of money into it as we are taking it slowly and spending it wise. Anything else should be covered under our PL insurance ;)

The missus is really enjoying our logo being made for us. Best £30 I've spent in a while lol.
 
I would also recommend just being a sole trader. You should contact HMRC within 3 months of setting up. It couldn't be easier, but i would get a accountant. For a simple business like you've explained a accountant will be about £300-£400 but will save you this in tax payments due to being able to calculate expenses etc.. and you have peace of mind. Make sure you keep all your receipts hand them in to the accountant and let him decide whether you can claim or not.
 
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Robert, that's an expensive accountant for a relatively simple sole trader tax return..

And do you really expect an accountant to find an additional £1500-2000 of expenses for this small type of business?

Joe
- Accountant :)
 
Is it?
I've not had a accountant before so i didn't know what i should pay, however he's claiming £4000-£5000 in expenses that i wasn't claiming when doing my own returns.
 
holy crap 5k in expenses ? - are you running a studio ?
 
Home Office £2377, Car £2257, Stationary £274, Mobile Phone £85 and Telphone&broadband £282
 
ahh so presumably the home office and the car are based on proportional use ... thats a good move but can be a b****r to prove if your books get audited (which is why many people prefer to just put milleage at 45p instead even though the claim ammount is lower)
 
big soft moose said:
ahh so presumably the home office and the car are based on proportional use ... thats a good move but can be a b****r to prove if your books get audited (which is why many people prefer to just put milleage at 45p instead even though the claim ammount is lower)
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I'll worry about it if that day ever comes! ;)
 
I have been speaking to an accountant (albiet it is a extended member of the family), and we have come to the agreement that we will draft them in for the tax return and I will keep a track of income and outgoing during the year.

We don't anticipate a great deal of income this year as most of the income is getting ploughed straight back into building equipment and such like. Maybe in the 2nd year or possibly the third it will then be worth our while having a full blown accountant doing all the books.

Things are looking good though, slowly networking and getting our name out there. Maybe all these hours spent hanging round the business forum has rubbed off a bit, lol.


Cheers all. Will keep you up to date ;)
 
Woblee said:
I have been speaking to an accountant (albiet it is a extended member of the family), and we have come to the agreement that we will draft them in for the tax return and I will keep a track of income and outgoing during the year.

We don't anticipate a great deal of income this year as most of the income is getting ploughed straight back into building equipment and such like. Maybe in the 2nd year or possibly the third it will then be worth our while having a full blown accountant doing all the books.

Things are looking good though, slowly networking and getting our name out there. Maybe all these hours spent hanging round the business forum has rubbed off a bit, lol.



Cheers all. Will keep you up to date ;)
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Beats making money for someone else. Good luck!
 
rjbell said:
Beats making money for someone else. Good luck!
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Know that feeling, hopefully she'll do well enough I can leave my day job ;)
 
^Joe did a really nice excel sheet for small businesses - If you haven't already you should ask him for a copy
 
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Oooooh, will do.
 
Only meeeeeeee....... again


We've been plodding on. We have all our income and expenses listed Joe's nifty spreadsheet, been on to HMRC and let them know. Also managed to get on a few business seminars so will see how they turn out.


Now, just one last question and I'll leave you all alone, promise ;)


What sort of advertising avenues work best?

We've done the YELL, Tompson Local and a few free listings sites. Tompson did contact us offering all sorts of services, promising us tons, but at £450/year (and for something I usually lob in the recycling as it comes through the door) we have it a miss.

Now I know at some point we are going to have to part with some cold hard cash to advertise. Is there any do's and don'ts? What about Google Adwords?
 
Flyers, Facebook, local noticeboards etc. etc.

Where do you look where you want something? The internet, you need a website with lots of examples (with great photos)
 
Dale_tem said:
Flyers, Facebook, local noticeboards etc. etc.

Where do you look where you want something? The internet, you need a website with lots of examples (with great photos)
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We have a FB page and website (few photos, adding more when i get them).

Might look into local newsagents and see if they'll put an advert in the window.
 
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