Advice for going self employed.

[SimonG]

I always thought it was a rolling 12 months?

 

[Murdoch]

I always thought it was a rolling 12 months?

No - HMRC can decide which 12 months ............ so if they decide you should be VAT registered, they send you a bill for 20% .......... so if you haven't charged it , you still have to pay up!

Paying 20% to HMRC would be very painful IMHO

 

[DGT plumbing]

Do any of you find getting paid a struggle? Again it's something I've had mixed opinions on, some do some dont. Do any of your require deposits for expensive jobs?

In 15 years I have had one none payer, which was a well known DIY chain and two slow payers both of which were this year. So a pretty good ratio really. Never asked for deposits up front although sometimes I wished I had. Never been VAT registered.

 

[Aire]

Thanks again for the further replies, so on all your advice I'll start with a reasonably priced tidy van, nothing fancy, I've got some tools but figure I'll need around 2k to get the other bits I need (analyser, core cutter, magna clense) and will look at spending around 3k on a van to start with, if work comes in thick and fast then I can always sell and upgrade. What's the cost for gas registration? Just trying to figure out what everything will cost me. I'll look into public liability but that will be further into next year.

I'll go see my bank to see what they can offer me regarding business accounts and then see how they compare to others.

I'll also contact local accountants and hopefully have a sit down with them so they can run through how to manage my books, I'm practical but crap when it comes to paperwork so this will be my biggest downfall.

The VAT thing worries me but I suppose after the first 6 months I'll roughly know whether I'll get anywhere near the threshold and worry about it then.

I'm going to be fair with my current employer and give them a good 4 months notice, don't want to drop it on them and leave them in the Rubbish, they're a small local construction firm who could possibly give me quite abit of subby work which will certainly help for the first year while I establish myself.

One thing I've been racking my brains over is company name, does it actually matter? What about van signage? Again this is something where opinion varies from person to person, I know ultimately it's word of mouth whats going to get you work but even if you get 2 jobs from someone seeing your van then surely it's worth it.

 

[Gasmk1]

I always think a nice clean tidy van with well designed signage looks the business and people do notice.

 

[Jim Goodenough]

For a core drill machine the DeWalt Silver Bullet is a great, reasonably priced bit of kit, 240 or 110v (I've used one, waiting for my Makita 650w to burn out!) https://www.NoLinkingToThis/p/dewalt-d21570k-gb-1300w-silver-bullet-diamond-core-drill-230v/48374
Screwfix/Plumbfix may not be lowest price, try FFX, Tool Stop, Power Tool World.
Also get yourself a Trade Account (not necessarily credit) at Screwfix called Plumbfix, slightly lower prices and generally good service at trade counter.
Other suppliers; BES, Williams (Trade Only Plumbing and Heating Supplies), Pipestock, Pipekit, JTM to name a few.

 

[Welder]

My three penneth... 😉

• Customers (the ONLY issue that matters)
  What are you offering that's different to other people?
  Why should people choose you? If YOU don't know no one else can know.
  What age range?
  What will you specialise in? What do people need?
  If you are going to do teh same as everyone else in your area how will people know about you and, being new, why would they choose you?
• Advertise.
  Make the ad simple.
  Tell people what you do. DO NOT put crap like 'all aspects of plumbing' blah blah blah
  Put ALL your contact details & your FULL name
• Start doing the things you can do now so money comes in. THis will take time to build. Do your GasSafe when you have the money and regular work but ONLY if its what your customers want. What you want DOES NOT COUNT. You are not the customer
• Clean van that runs or even an estate (personally never owned a van) Customer care not a jot about what you drive. They do care tho if you stain their drives
• Buy tools for a job that NEEDS it. It's cash just that might help you in other productive ways - like advertising.
• 100% have a contract for every job over an amount you decide. I used to do it for over £350. Happy to supply if you'd like.
• ALWAYS take materials & sub-contractor money up front. That way if you get knocked the most you lose is your time.
• Insure - public liability.
• Secure your vehicle - another reason to have an estate
• Realise small (bitsa) jobs can make you more money than smaller jobs.
• Be honest. Make sure all you can be accused of is telling the truth.
• TRUST your instincts. As a human being we take on 11,000,000 bytes of information a minute. We are conscious of just 50 bytes (yes fifty) of those eleven million! The rest we call 'gut feel' or 'instinct'. Listen to it because it will NOT let you down.
• Do not be afraid to walk away from a job. Blokes typically justify in their minds by upping the price or something. Nothing is worth that. Walk away and something better will replace it.
• Rate. Work out what you need to earn to live. Break that down into FOUR working days as an hourly rate. The reality of hourly rates are that they have to pay for running around invoicing quote writing etc etc. You still need time to live and for family.
• Supply the goods. Do not go cheap. It will cost YOU more time on the job.
• Choose a good indie merchant or two to supply you. Make sure they can supply what your customers want.
• Take payment on the day - always. The cost of doing so is outwayed by positive cashflow.
• CASHFLOW IS KING. All the jobs in all the world are worth nothing if you've no money in the bank.

Sorry for going on 😉

 

[PETE 123]

Go ltd if you read up and decide that way or se

 

[Coys61]

100% agree

I buy premium bonds every month .. then get the money out when my tax bill arrives!

And yes I do get winnings .. never big so far but you never know!

What a brilliant idea. Thanks.

 

[Welder]

Go ltd if you read up and decide that way or se

From advice we recd, one would typically need to turn over £125k plus to justify the additional cost of Limited status. Most SE people do not get to that point for quite a while.

 

[Murdoch]

What a brilliant idea. Thanks.

If you do this, get your NS&I account set up and then you can do it all online

BUT beware the "new" bonds have to be in for 1 calendar month before they are in the draw ....... so buy on the 1st of the month and you have to wait 2 months, buy on the last day of the month and its only 1 month wait...

 

[Aire]

Thanks for the tips everyone. Dave, to be honest I hadn't thought about what I can offer that other established plumbers in the area aren't and there are quiet a few around, but i still hear comments from customers about not being able to find decent plumbers. I know for a fact you wouldn't trust some of the plumbers/engineers in the area to cut your grass so how they continue to get plumbing work is beyond me .
My background is boiler/heating installs which I did for the first 7 years of my career and then went into bathroom installs for the last 7 years working for a home improvement/construction firm. This is the company i also got my gas quals with but we don't do that much gas work. From what I can gather there aren't many in the area that offer a complete service, most want to stick to heating and the bathroom installers don't do heating. I plan to advertise for both and will see what work comes in although I am hoping to step away from doing bathrooms all the time and would like a healthy mix of both.
Regarding using indie merchants, we do have 1 that I know of in the town but I've always used the local Grahams merchants since it opened 11 - 12 years ago. What benefit would I get from an indie?

As for ltd companies, whats the differnence between that and vat registered? what's the pros and cons? A plumber i worked with who went self employed just over a year ago registered as ltd instantly and an electrician I know who's just gone self employed also went ltd. Have they rushed into it?

 

[Murdoch]

^^ ouch

VAT registered and Ltd are 2 completely different things ...

 

[Pickwickpick]

Its quite complicated regarding ltd companies but one benefit of being limited is you are effectively ring fencing your assets, only the company's assets i.e. what you invest into the company are at risk, your personal assets aren't exposed hence it being called 'limited'.

There are also tax implications, depending on how you set it up and take money out of it you could reduce your tax bill but only if you're earning 100s of thousands as there are many more costs involved. Accountant fees will be greater, you have to have directors/secrataries, much more reporting...

You really need professional advice on this but its not something I think that's worth considering and seeking advice on until you're profits are well over £50k

 

[Aire]

Its quite complicated regarding ltd companies but one benefit of being limited is you are effectively ring fencing your assets, only the company's assets i.e. what you invest into the company are at risk, your personal assets aren't exposed hence it being called 'limited'.

There are also tax implications, depending on how you set it up and take money out of it you could reduce your tax bill but only if you're earning 100s of thousands as there are many more costs involved. Accountant fees will be greater, you have to have directors/secrataries, much more reporting...

You really need professional advice on this but its not something I think that's worth considering and seeking advice on until you're profits are well over £50k

Yeah that's good advice, no need to rush into anything. Paperwork isn't my strong point anyway so if not going limited saves paperwork then I'm all for it, atleast until I'm more established and got used to running my firm.

 

[Pickwickpick]

Yeah that's good advice, no need to rush into anything. Paperwork isn't my strong point anyway so if not going limited saves paperwork then I'm all for it, atleast until I'm more established and got used to running my firm.

Yep if, like myself, you're not the most organised when it comes to paperwork (my filing system generally involves assorted piles dotted around the house, drives the missus crazy) then limited companies are not for you, there's enough bureaucracy involved with self employment! You're going to have so much to deal with when you start out that its important to keep things as simple as possible, even if its not the most efficient/tax advantageous imo as otherwise you're setting yourself up for a massive cockup at some point.

 

[Scott_1979]

All this talk of Ltd etc is too soon he’s only starting up. I made -2k my first year trading

Hopefully things go better for you mate, especially if you’ve got contacts already. I just bought tools as I needed them, my van cost £900 and done me for a year. It was a Vauxhall combo and I was a bit embarrassed of it but no one mentioned anything and I got repeat customers so I really don’t think they care !!

You might have days at home wondering what the hell you were thinking like I did, it was very quiet at times. The internet helped me, I built my own website with the free time and got into SEO. As soon as I got my website onto the first page of google it helped massively, look into it if things aren’t going your way.

 

[Aire]

All this talk of Ltd etc is too soon he’s only starting up. I made -2k my first year trading

Hopefully things go better for you mate, especially if you’ve got contacts already. I just bought tools as I needed them, my van cost £900 and done me for a year. It was a Vauxhall combo and I was a bit embarrassed of it but no one mentioned anything and I got repeat customers so I really don’t think they care !!

You might have days at home wondering what the hell you were thinking like I did, it was very quiet at times. The internet helped me, I built my own website with the free time and got into SEO. As soon as I got my website onto the first page of google it helped massively, look into it if things aren’t going your way.

Tough times, I certainly hope to make more than 2k in my first year though 😱. I do have contacts already and I know a few contractors are keen to use me so hopefully it will all work out. Your probably right about the van, if it's clean and runs that's all that's needed I guess. I plan on advertising a couple months before I officially go self employed so I should get a good feel for what jobs will be coming my way and will buy tools to suit the work.

 

[ShaunCorbs]

Tough times, I certainly hope to make more than 2k in my first year though 😱. I do have contacts already and I know a few contractors are keen to use me so hopefully it will all work out. Your probably right about the van, if it's clean and runs that's all that's needed I guess. I plan on advertising a couple months before I officially go self employed so I should get a good feel for what jobs will be coming my way and will buy tools to suit the work.

He lost 2k in his first year

 

[scoz]

Hi everyone, as the title says I'm looking at going self employed, I'm 31 and worked for 2 companies over the past 14 years so feel it's time for me to take control and be my own boss.

Naturally I'm little nervous about what to expect and my biggest worry is keeping the work coming in. Most people I've told have all given me positive feedback and said they'd throw work my way so that's a good start.

I'm going to give myself around 6 months to get everything sorted, some of the stuff I use like gas analyser, core drill etc is supplied by the company so I would need to get my own, I've currently got the sprint evo 2 which I like, would there be any benefit to upgrading to the evo 3 or pro?

What do you advise regarding vans? I've had mixed responses, get a cheap van that could spend more time off than on the road Or spend more with the hope that customers won't be an issue and the van will pay for itself.

I'm also concerned about my lack of servicing and repair experience, my back ground is predominantly boiler/heating and bathroom installations so when things have failed it's been manufacturers who have done the repairs, not myself.

There's probably loads of questions I could ask but is be writing all night, I would appreciate any advice you guys could give me, things you've learned since you set up, things you wish you'd done differently, any help would be great.

Many thanks

May I point out that the gas safety you have is for carrying out the work on behalf of the company and does not cover you as being self employed. Many people carry out work on the side in their own time but do not have a gas safe for themselves relying on the company gas safe which makes the work they carry it ilegal.