Starting a tattoo shop

nacider

Hey there, I need some help!
Been tattooing for around 3yrs now and have decided to open my own shop.
I went to business gateway and they were all a bit bleak about tattoo shops, as they don't know much about the biz.

I know all the correct info on how to get the tattoo licence. I am just confused about tax, ni, vat etc.

I had a business plan (but somehow the USB stick is not reconised on my laptop anymore!) and worked out that I would be earning above 70k so I would have to register for VAT,
How much does it cost to register for vat? Do I already need to be up and running? Or is it best to register once the shop is open?
What NI should I be going for? What about tax, I don't understand it at all.

I have to do some work to the shop, eg. putting up walls and putting in sinks. I already know a plumber in the family, so I can hopefully get a discounted rate, but I was wondering how much it would cost to put up the walls? its two walls, I'm not sure of sizes yet as I only had a look at the premises yesterday, I just want a really rough estimate.

I am also wanting to get a business loan, but would I be better getting a grant as I am young? (I'm 22) or would they reject a tattoo shop for a grant? I know some people are funny about tattoo shops.

I already have £2,000 in savings, and want to borrow around £10,000 to keep me tidy. When i apply for the business loan would I need my business plan?

Also, if I register for vat is it worthwhile getting an accountant?
I think thats all the questions I have now lol, any help would be appreciated! Thanks :j

easyhost

nacider wrote: »

Hey there, I need some help!
Been tattooing for around 3yrs now and have decided to open my own shop.
I went to business gateway and they were all a bit bleak about tattoo shops, as they don't know much about the biz.

I know all the correct info on how to get the tattoo licence. I am just confused about tax, ni, vat etc.

I had a business plan (but somehow the USB stick is not reconised on my laptop anymore!) and worked out that I would be earning above 70k so I would have to register for VAT,
How much does it cost to register for vat? Do I already need to be up and running? Or is it best to register once the shop is open?
What NI should I be going for? What about tax, I don't understand it at all.

I have to do some work to the shop, eg. putting up walls and putting in sinks. I already know a plumber in the family, so I can hopefully get a discounted rate, but I was wondering how much it would cost to put up the walls? its two walls, I'm not sure of sizes yet as I only had a look at the premises yesterday, I just want a really rough estimate.

I am also wanting to get a business loan, but would I be better getting a grant as I am young? (I'm 22) or would they reject a tattoo shop for a grant? I know some people are funny about tattoo shops.

I already have £2,000 in savings, and want to borrow around £10,000 to keep me tidy. When i apply for the business loan would I need my business plan?

Also, if I register for vat is it worthwhile getting an accountant?
I think thats all the questions I have now lol, any help would be appreciated! Thanks :j

i suggest you contact Business link and the HMRC they will give you all advice and help needed

nacider

easyhost wrote: »

i suggest you contact Business link and the HMRC they will give you all advice and help needed

are business link not just for england? i am in scotland. i use business gateway, they weren't helpful with a lot of my questions

musicmaker29

earning over 70K!? I think that is optimistic in the extreme unless you are going to have a lot of tattooists, so I wouldn't worry about VAT.

steve1980

If you are asking questions about the tattoo side then of course they aren't going to be too hot about it.

VAT is payable once you reach a turnover of £76,000 (I think). You can register for VAT (no charge) so you can claim the VAT back on the supplies you buy in BUT you would also have to charge VAT to all customers, for example tattoo cost £50 (no VAT) or if you're VAT regsitered then it would be £60 (£50 plus VAT @ 20% = £60) or £40 plus VAT.

Most lenders will want you to put in at least 33% of your own money if not more. You could alternatively get a personal loan but not really recommended. You'd need a better reason for the loan other than to "keep you tidy".

For the building costs, no one would have a clue. You would need to get a quote from a contractor. There's no standard price.

Is there a market for a tattooist in the area that you are opening a shop? You're basing figures on an expected footfall, but in this day and age, nothing is certain.

If you think you're going to be earning £70k plus then yes, definately get an accountant.

musicmaker29

sorry, I just realised that last post was written in a bit of a dismissive way and I didn't mean it to sound like that.

I would ask HMRC - you will need to decide whether to be a sole trader or a limited company (I imagine you will be a sole trader). You would be well advised to get some comprehensive insurance as well - otherwise any claims could come back to your personal assets/credit file.

How did you come to 70k turnover? (Can't remember if VAT threshold is based on turnover or profit). Remember to factor in your rent, bills, rates, insurance, clinical waste collection (including sharps), fitting the shop out, ink, needles etc. Will you use disposable tips or an autoclave for sterilisation?

In summary, I would start by asking your local council about licensing you and your premises (as a tattooist you must already have done this). Then ask HMRC about how to set up and what records you need to keep.

paddyrg

Premises will be a huge cost, especially if they're sitting empty whilst you try to attract clients. Then adding business rates on top, and your monthly costs will soon exhaust your £2k. Businesses. Tend to fail not because they're unprofitable, but on cashflow - you need to keep every penny of cash you can.

So, how to get started? Can you rent a chair in a barbers shop, or a cupboard from one of those goth and head shops? Get them to agree a trial period whilst you get going, and you already have footfall from your target customers.

Don't worry about VAT until you're busy enough to be considering employing people (not that VAT and employmrnt are related, it's just a crude guide of size, ie when you are turning over £70k+) - the value in your business is all in the time and skill of the artist, not the cost of supplies. If a month's worth of ink costs you £12 instead of £10, who cares? But it means you get to keep all £48 of a £48 fee, not give £8 away in VAT.

But the loan is very unlikely to happen with no security, and so highly geared at a young age, so work on getting those costs riiit down to as low as you can go.

greyteam1959

Now I don't know much about Tattoo shops but.........I don't know where you get a turnover figure of £70 000 from...... not realistic at all my friend.

musicmaker29

Despite all that has been said above (which look daunting), please don't think that this in impossible - I think its great that, at a young age, you have the where-with-all to want to start your own business.

Just start small (low cost), do things properly (high quality work, abide by ALL laws and byelaws), and accept that, for a few years, you will not earn a lot of money. Any questions, please do post!

paulwf

paddyrg wrote: »

Premises will be a huge cost, especially if they're sitting empty whilst you try to attract clients. Then adding business rates on top, and your monthly costs will soon exhaust your £2k. Businesses. Tend to fail not because they're unprofitable, but on cashflow - you need to keep every penny of cash you can.

So, how to get started? Can you rent a chair in a barbers shop, or a cupboard from one of those goth and head shops? Get them to agree a trial period whilst you get going, and you already have footfall from your target customers.

I can't emphasise strongly enough how good the above advice is! With all due respect OP you have a lot to learn about how the financial and compliance side of business works. This isn't a criticism as we all have to start and learn from somewhere, but I would suggest you don't get tied in to premesis as most of the costs will be fixed and you will have to pay them even if you get zero customers...so a huge risk.

It will be much better to start by renting a chair or something similar so you can learn everything you need to without any ties. That reduces the risk and will allow you to learn the boring financial bits. Then, when it comes to getting premises you will know *exactly* what you require...both in terms of size, amenities and location.

Don't rush into getting the premises you have seen, there will be lots of fantastic properties available for the next few years in most towns, you will be able to pick and choose the perfect location at any time. At 22 there's no rush so nothing to gain from getting premises straight away but everything to gain by starting out small.

On a different note have you considered getting a business mentor or business partner? Being a top class tattoo artist and being a business/financial expert are very different qualities. The good news is to run a tattoo shop being a great tatooist is the main thing, but there is no harm in getting help to cover the boring stuff

Savvy_Sue

nacider wrote: »

I had a business plan (but somehow the USB stick is not reconised on my laptop anymore!)

It's worth trying it on a different machine, and also worth wiggling it about and possibly holding it in place. But one thing you've learned from this: back up EVERYTHING which matters!

nacider wrote: »

What NI should I be going for? What about tax, I don't understand it at all.

Unless you don't anticipate earning more than about £5000 in your first year, it's not so much a case of what NI you should be going for, as a case of what NI HMRC will expect you to pay once you register. And as for understanding this kind of thing, you have two choices: teach yourself (with help from any free courses on offer from HMRC, Business Gateway etc), or ...

paulwf wrote: »

On a different note have you considered getting a business mentor or business partner? Being a top class tattoo artist and being a business/financial expert are very different qualities. The good news is to run a tattoo shop being a great tatooist is the main thing, but there is no harm in getting help to cover the boring stuff

what he said!

Business Gateway will only have 'general' information on how to run a business. However, it's likely to cover all aspects of running a business: marketing is likely to be a big thing for you, because you can open the smartest premises for miles around, but if no-one knows you're there, you'll get no business!

And I do agree with what's already been said. Your fixed costs have to be got down as low as you can go, and some of them are going to have to be paid whether you have 10 customers a day, or none.