Starting a small business - rented property and other questions...

Jadedwords

Hello!

I'm just out of University and looking to start my own business with my partner. We've got an idea, a name, and some saved up cash to buy the machine we'll need.

But I'm feeling a bit lost in all of the literature, and have a few questions... I would be extremely grateful if anyone could help me clear any of them up!

Firstly, is it okay to be a sole trader rather than a limited company? Is this what most people do? The tax looks a lot simpler, and I don't see us getting into huge amounts of debt with our idea.

Secondly (this one is really worrying me), is it true that most leases don't allow businesses to be run in a rented property? We are moving in a month or so and wanted to purchase the machine we will need to produce our product at the same time. Obviously with a machine we can't hide the fact that we're running a business, so this isn't an option. Do most landlords not want you to run a business on the property? Is this because they need extra insurance or something?

Thirdly, I'm lost in what type of insurance I need to get. We want to sell some items for events, made on a machine. So I guess we'd need some sort of insurance in case the machine broke and we couldn't deliver the items in time for the event? I'm a bit lost on the insurance front.

Lastly, does anyone know of any start-up grants available to us (as 20 year olds)? Besides the Princes Trust, who seem to be aiming at disadvantaged young people rather than graduates.

Is there anything else I need to consider before starting a business in this way? I'm already self-employed doing mystery shopping and things, so I understand the tax I think.

Thanks for your time and patience!

Mista_C

Jadedwords wrote: »

Hello!

I'm just out of University and looking to start my own business with my partner. We've got an idea, a name, and some saved up cash to buy the machine we'll need.

But I'm feeling a bit lost in all of the literature, and have a few questions... I would be extremely grateful if anyone could help me clear any of them up!

Firstly, is it okay to be a sole trader rather than a limited company? Is this what most people do? The tax looks a lot simpler, and I don't see us getting into huge amounts of debt with our idea.

I believe you would be a Partnership rather than Sole Trader if both of you are to be equal in the business (outside of Directorship). The main difference between Sole Trader and Limited Company is that liability in a LTD stops with the company compared with being a sole Trader where liability stops at the individual.

Secondly (this one is really worrying me), is it true that most leases don't allow businesses to be run in a rented property? We are moving in a month or so and wanted to purchase the machine we will need to produce our product at the same time. Obviously with a machine we can't hide the fact that we're running a business, so this isn't an option. Do most landlords not want you to run a business on the property? Is this because they need extra insurance or something?

I believe other than insurance there are other additional costs and responsibilities involved. Hopefully someone will be along shortly to offer deeper insight.

Thirdly, I'm lost in what type of insurance I need to get. We want to sell some items for events, made on a machine. So I guess we'd need some sort of insurance in case the machine broke and we couldn't deliver the items in time for the event? I'm a bit lost on the insurance front.

Liability Insurance, specifics will depend on the specifics of your business nature.

Lastly, does anyone know of any start-up grants available to us (as 20 year olds)? Besides the Princes Trust, who seem to be aiming at disadvantaged young people rather than graduates.

Is there anything else I need to consider before starting a business in this way? I'm already self-employed doing mystery shopping and things, so I understand the tax I think.

Thanks for your time and patience!

Sorry, I'm not aware of any but hopefully someone else can point you in the right direction.

Horace

I am not aware of any start up grants - grants have been virtually impossible to find certainly for the last 2 years. Why not give The Prince's Trust a try - they can only say no.

Landlord's tend not to like businesses being conducted on residential premises because of noise nuisance and the possibility of clients visiting at all hours of the day and night. However, if you are just using a computer and meeting clients aou getway from the home then they tend to be ok with it.

If you are intending to sell at events - you will need some professional indeminity insurance as well as public liability (to protect you in case someone trips over your equipment or whatever).

You can get free business advice from Business Link and your local chamber of commerce maybe able to help with some free courses on setting up a business, writing a business plan etc.

I would advise that you get some legal advice with regard to setting up a partnership because although things maybe sweetness and light at the moment, things can change over time and you may fall out with your partner and you could be left with nothing. Do this before you register with the HMRC.

PasturesNew

What sort of machine? There's a lot of difference between a colour printing press, a key cutting machine and a chocolate fountain, for example.

Most LLs wouldn't allow you to use a place to run a business - but it depends on the type of business which you've not shared. Additionally, you might need Planning Permission, or some change of use.... again, depending on what type of business.

What hours will ou operate? How will you dispose of waste products? Are those waste products solids or liquids? What nuisance would your "machine" cause for neighbours? Will you have a van coming/going? Or visitors to the house?

s_b

no landlord would want a machine on his property because it would null and void his insurance cover
see if you can rent a property with a secure free standing electric supplied garage for your time machine

simplydevine05

My landlord is fine about me working from home. I work in the lounge, have no business visitors and I store stock that I insure along with product liability and public liability insurance through Direct Line.
I agree with what another poster put about the partnership and what if things go wrong. I've seen it happen. Best to draw up a contract between you both.
With regards to grants, there are some out there if you look hard enough but you will generally need a solid business plan. The way I see it, don't expect anyone to put money into your business if you won't, and I started my business with £100. Start small and grow slowly. No rush to success!
Good luck!

CKhalvashi

simplydevine05 wrote: »

and I started my business with £100.

So did another friend of ours!

paddyrg

No, there are no grants. Purpose of a business is to make money and be commercially viable, if it needs grants, it's not commercially viable!

However maybe you could offer some deeply discounted rates for advance booking on large orders? If I could get 100 things for the price of 50 by fronting the cash for the essential 'machine', I would consider it sound business sense all round.