starting a business, need help.

Emmzi

as a starter here's a link to the bbc website explaining different types of childcare. it also has links to relevant assocoiations etc for further ino

http://www.bbc.co.uk/parenting/childcare/available_index.shtml

pelirocco

danelliott wrote: »

ok, total yearly income for 1st year is estimated at around £1.6m, there is wages to be paid out at an estimated £374000, ive not taken into account premises, stationary etc yet but icant see 250k being less than enough to get by o in the 1st year.

in my existing contract there is no limitations as to being able to trade in the same areas ect, but there is in mycontract for my new business

How many staff is the wage figure for?

I'm not sure what you mean re 250k being less then enough to get by?

Have you mentioned the figure you thinkyou would need to borrow? btw you dont seem to have factored in a repayment figure

pelirocco

reading other posts made by OP ,confused by this .https://forums.moneysavingexpert.com/discussion/695473

heretolearn_2

Hi

I'm going to pour just a little more cold water on your plans - but then try and finish up with something more positive for you, as you can't help but admire someone with ambition!

There are 4 things that worry me about your post, and hence your potential business.

1) You've got contracts in place with clients but no way of fulfilling those contracts? What happens if you can't pull it all together in time? Will you face financial penalties for breaking contracts? Is there a risk of the clients pulling out by the time you get everything organised? I know it's a bit chicken and egg, you don't want get everything in place until you've got orders (and if you are looking for loans/funding, you'll need them), but you can't do the orders until you've got a company in place. Just be careful and make sure you are being realistic about what you can and can't do.

b) Leading on from that: I'm a wee bit concerned about apparent lack of business know-how here. Salespeople are generally experts on gross/net/profit margins etc as it's the lifeblood day to day of the sales/commercial dept of a firm. Most good salespeople would feel confident enough about having a crack at a business plan, and probably make a pretty good job of it. Get over to Businesslink pronto, speak to your business bank manager, get on the internet, go to the library, speak to any helpful business owners you can find, but you need to seriously up your business acumen if you hope to be operating at the level you are aiming up.

c) On the one hand you say you can't afford to pay for any legal/accounting/professional services up front (of course people want paying up front) but then you are asking here for help from people offering these services. It's not realistic. A couple of quick general posts on a forum, ok, but real specific professional help for free? Seriously not going to happen. And purleeese don't go to anyone with the 'do this for us free now and then we are going to make loads of money and use your services for the rest of our lives so you'll make loads of money too' routine. You have to up your own skill level, go to the free resources listed above, and get some money together for everything else.

d) Being under-capitalised is one the major reasons I see new businesses fail. Get the figures right and spend your money wisely.

But, I said I'd end up more positively:

Business link really is an excellent resource
Business plans for the purpose of gaining a bank loan are not that hard and shouldn't be beyond you as a salesperson and with some training maybe from business link.

Good luck with your idea. Hope it all comes together.

Savvy_Sue

buissiness_help wrote: »

Hi I am sorry for latching onto this thread but I do not know how to create a new one.

I am wanting to be a self employed babysitter/ nanny. I am a new mum and the nursery I worked for is closing and have been asked to look after one of the child who I previously cared for, in their own home with my wee boy.

How do I contact Inland revenue.... set-up my buissness, i'd rather be self employed than employed by the family?

Emmzi wrote: »

as a starter here's a link to the bbc website explaining different types of childcare. it also has links to relevant assocoiations etc for further ino

http://www.bbc.co.uk/parenting/childcare/available_index.shtml

The good news is that registering as self-employed with HMRC is an awful lot simpler than registering as a childminder, and the bad news is that that is what you will have to do if you are providing childcare in your own home.

foxwales

Got a few questions and points.

1) How can you form any legally binding contract with clients when you don't have a legal entity as a business to form the basis of the contract?

2) How are you estimating your projected revenue for year 1 to be £1.6 million when you don't have a business plan and are not aware of the legalities in operating a company?

3) How have you got staff ready to go again when you do not have a legal entity to employ these staff and have no formal contract of employment to give them, meaning they have no committment to you.

Any form of financial backing will need to be on the basis of being realistic.

Your salaries account for 1/5 of your total revenue for projected year 1. This is extremely high when you have no track record of operation and no accounts to justify this expense to an investor.

In order for you to obtain financial backing your investor according to your figures would need to provide
- £374,000 for salaries
- then there is potential stock ( I am assuming you are selling a product)
- Premises costs
- Manufacturer costs or distributor costs for your product
- Marketing budget
- Contingency set-aside

This will add up to a huge amount; and by investing 0% yourself, you give any investor little to no confidence in your investment as they would have to provide 100% financial backing to get you started.

The same would apply with a bank, your start up costs are simply un-realistic for year 1 and you have no track record other than your experience as an employee to back-up your proposal

You seriously need some guidance on this and I do wish you well, but I do think you are trying to sprint before you can run, and you should definately walk before you run.

paulwf

Did you really walk out on a managers and assistant managers job when you haven't got funding in place?

It sounds ironic but the truth is you need to spend money in order to borrow money! For a company of the size you project you will probably need to spend money on solicitors, accountants and probably a small amount of specialist consultation to get your business plan in shape. Somewhere along the line you'll also have to pay for a surveyor and get some plans for your business unit drawn up so you can get accurate costings for your premises. Basically you need to set aside at least £5K for various professional fees before you can approach the bank.

Any bank will want you to put some of your own money into the project, the (very rough) rule of thumb is you put in 1/3 and the bank loans you 2/3 . They will also want security to cover the loan, if you don't have this there is the Enterprise Finance Guarantee route.

Due to these hurdles many companies start out as a pilot project whilst the people involved are still in work. You then have the option to build it up gradually to keep funding to a minimum. As you want to jump straight in the deep end and turn over £1.5 million in year 1 I just can't see how you are going to do this without spending out some of your own money first.

danelliott

thank you all for your replies, i will try and answer them all.....

the staff i have are people who ar workig at the moment but are willing to come over and work for our company once its started, all experienced and excellent in their field.

all the staff who will work for us will be independenat contractors so will deal with their own nic and tax.

the clients (we have more than 1 company wishing for us to work for them) have sent me contracts which i just need to sign once the company is formed and then we can go from day 1 and start selling for them.

we did walk out of positions in the company we were working for because we are in sales and as soon as your attitude starts to go then it makes it hard to do that kind of job, our old employer made things difficault for us and it would have been pointless staying there.

Payment: as a company we will be paid £100 per sale by our client, we are paying £15 to our agents. we can estimate after research that the initial 6 guys who will be working including myself and my partner will be doing on average 5 sales each per day (this is looking at it negitivly) thats £3000 pe day into the company thats ovr 5 days (£15000) - agents wage (150 sales @ £15 = £2250) = £12750. we will stay at his level for the first month, then each agent will be hiring on average 1 guy a week (again this is negative way of looking at it) by the end of the 2nd month we will have over 20 staff members doing on average 5 sales per day thats 500 sales per week @ £100 per sale = £50000 per week. the estimated costs of the offic and running costs will not exceed £1700 per month initially.

Start up costs are minimal, as i will only need enough moneyto source an office for the 1st month and equipment for the office which in fairness will oly really consist of a pc, photocopier, fax, desks chairs and stationary. we will be paid from our client after 2 weeks from start day and will be paid per sale we make for them. the gents will be paid oncewe have been paid, they will work and get paid on there 2nd full week, this is the aggreement.

I have a contract for my independent contractors which i have compiled, again i am looking for some one to view it and tell me if its legal, it should be as ive sourced a copy of an agreement and basically copied it but aded and taken a few things from it to suit.

we are selling a service not a product so we do not need manufacture costs or any other costs as such.



If i have missed anything and you want to ask then re-post and ill try and answer your questions.

Hammyman

danelliott wrote: »

t
the staff i have are people who ar workig at the moment but are willing to come over and work for our company once its started, all experienced and excellent in their field.

They need paying.

all the staff who will work for us will be independenat contractors so will deal with their own nic and tax.

This is most likely to be illegal. They would not be counted as self employed.

the clients (we have more than 1 company wishing for us to work for them) have sent me contracts which i just need to sign once the company is formed and then we can go from day 1 and start selling for them.

So form the company. You can buy an "off the shelf:" Ltd one for about £40.
Many companies say they'll use you but most banks want that confirming in writing which most companies won't.

Payment: as a company we will be paid £100 per sale by our client, we are paying £15 to our agents. we can estimate after research that the initial 6 guys who will be working including myself and my partner will be doing on average 5 sales each per day (this is looking at it negitivly) thats £3000 pe day into the company thats ovr 5 days (£15000) - agents wage (150 sales @ £15 = £2250) = £12750. we will stay at his level for the first month, then each agent will be hiring on average 1 guy a week (again this is negative way of looking at it) by the end of the 2nd month we will have over 20 staff members doing on average 5 sales per day thats 500 sales per week @ £100 per sale = £50000 per week. the estimated costs of the offic and running costs will not exceed £1700 per month initially.

Expect it not to do that. If each agent hires one person per week, how are they going to fund the wages from the pittance they'll be receiving?

Start up costs are minimal, as i will only need enough moneyto source an office for the 1st month and equipment for the office which in fairness will oly really consist of a pc, photocopier, fax, desks chairs and stationary. we will be paid from our client after 2 weeks from start day and will be paid per sale we make for them. the gents will be paid oncewe have been paid, they will work and get paid on there 2nd full week, this is the aggreement.

I thought that. You're in for a shock. Stationary is not cheap. Don't count on when you'll be paid. When a client says they'll pay you and when they actually do are usually two different things and at least 30 days apart.

I have a contract for my independent contractors which i have compiled, again i am looking for some one to view it and tell me if its legal, it should be as ive sourced a copy of an agreement and basically copied it but aded and taken a few things from it to suit.

I suggest strongly that you look at the HMRC website, particularly "Am I employed or self employed?"

danelliott

They are independent contractors and will be paid for sales they do, the money to pay them will come from the £100 the company will be paid for each sale put through.

They will be independent contractors, this is not illegal, its the way the industry works, i know, ive worked it for years.

I have in writting, the contracts which show that these clients want us to work for them.

The agents hired by existing agents will be paid from our company at the same rate the initial contractors will be paid at.

I have in witing the pay we will receive will be 2 weeks from submision of sales to the client, so the 30 daything doesnt count for this type of business. In some cases it will depending on the client, this is why we have chosen a client who will and can pay us within 2 weeks.