small business help

Anoon

Hi

I am a regular poster but wanted some advice , and I worry who can see this! Basically I am obviously in debt as is my husband around 8k between us. My husband works fulltime in ICT, he is on a very low wage considering his hours/ skill and experience. I am not the only person who thinks this, however he cannot ask for a rise at the moment and hasnt had one for 2/3 years. I think he could do this on his own, in order for him to earn what he does now he would need to make 50 per day. I was thinking of doing this part time to start of with, distributing leaflets, getting a new number and paying for new top with business name ect. I could post this round most nights for an hour ( I would do these very cheaply on my own comp). However he is concerned that if found out his job would be at risk - however he would not be poaching any current customers or even telling them. He would be finding his own ect. I thought he could do this for a while to build up himself with the stability of an income aswell. He could then think about going it alone in the future if all goes well.

Where do we get started with regards to TAX/VAT registering a new company ect? Does anyone have any ideas? Also do you think this is a good idea? Or would you to be concerned with losing current job.

Horace

He may find it difficult to get a bank account if he has so much debt. As for setting up a business then initially set up as a sole trader and register with the HMRC so that he can pay tax and class 2 NI. No need to fret about VAT as you are well under the threshold.

If your OH wants to set up a business in the same line of work as his employer then he may not be allowed to according to his contract because his employer could view him as poaching clients even though he claims that he isn't.

It will cost some money to get a logo, printed stationery and a website which are necessary for businesses these days. Be prepared for long days and nights because customers don't fall off trees and it takes time to build up a client base - I myself have been in business for 2 years and have only just started getting clients and I know people in the ICT business who have had similar experiences so don't expect clients to be there straight away because they won't be.

First of all, I would advise that he speaks to Business Link or the Scottish equivalent (depending on whether or not you are in Scotland), also speak to the Chamber of Commerce as they will often run free courses on how to set up a business. After taking such courses only then will he know if self employment is right for him.

Anoon

Hi again,

the debt is between us - we already have bank accounts, would we need to set up an official business account?

I have a member in my family who is very savvy at business and he is on call for advice ect, of course I understand will be very hard to get clients ect but this is why I am suggestiing doing it alongside employment at the moment. However I am inclined to do this anyway even if it is frowned upon, we have no other way to make income and to help ourselfs except to use his skills which I feel are being taken advantage of at the moment as he is on a pretty rubbish wage. The downside is I am currently the confident, driving forace of us, so I think I will have to be the one to direct him and encourage him as he is pretty unconfident.

Horace

You would need to set up a separate business account to keep your business money separate from your personal money. It is easier to keep track of your business money because you will need to pay tax and class 2 NI. It is more difficult if it is lumped into the same personal pot because it would be harder to distinguish.

I understand that you are the driving force behind this but really your OH should be on board because he is the one who will be doing the work, if he is going into this half hearted to keep you quiet then the business will fail. I not trying to be nasty but point out hard truths because he needs to be passionate about his work - people can tell if you are not passionate and will avoid employing your services. I wasnt passionate about weddings so changed my focus to corporate events which I absolutely love organising and guess what my business is going from strength to strength when previously I had no weddings to organise and had no real interest in weddings - it showed.

I am not saying that it is illegal to be self employed whilst being employed at the same time, I am just saying that he needs to be wary of his employer and may need to ask his employer's permission before setting up.

In the meantime, has he tried to look for alternative work that pays more? To improve his lot at work, could he ask to attend some training courses to boost his skill set - the more qualifications he has then the more money he can earn plus it will make him look better to potential new employers.

Again, I suggest speaking to the chamber of commerce and asking if they offer free courses to help set up a business - they usually do one on legalities, marketing, sales, business plans same goes for Business Link. The HMRC also run free courses in how to complete a self assessment tax return and they will advise what you can and cannot claim for.

He would also need to consider insurance too such as professional indemnity and public liability especially if he intends going into people's homes to repair computers etc.

jexygirl

Hi Anoon

Horace wrote: »

If your OH wants to set up a business in the same line of work as his employer then he may not be allowed to according to his contract because his employer could view him as poaching clients even though he claims that he isn't.

I think horace was advising you on this, because it can be in his contract rather than simply frowned upon - some say it's not legally binding - more a scare tactic, but I wouldn't push my luck in the current climate - and, if it did come to fruition, it might mean he was "let go" from his day job for effectively breaking his contract - the last thing you need.

As for the bank account, there are people here who have run buisnesses from personal accounts for a number of years with no problems, and others who insist you should have a buisness bank account.
I can't comment as we have always had buisness accounts for each buisness we have independantly, as well as a joint account between 3 "directors" for the charity events stuff.
As long as you keep clear concise records, then a personal account would technically be Ok, certainly until you built up, however it can become complicated if its not seperate when you consider expenses, vehicle costs/ usage, basic outgoings, income, invoices, working from home, being able to claim things back as a result etc. which half an hour introduction free with an accountant (or several ) would help with.

Horace wrote: »

First of all, I would advise that he speaks to Business Link or the Scottish equivalent (depending on whether or not you are in Scotland), also speak to the Chamber of Commerce as they will often run free courses on how to set up a business. After taking such courses only then will he know if self employment is right for him.

As usual sound advice- basic starting point full of info.

I would talk to hubby first tho, since you seem to be the driving force and are willing to work hard to support him and build (understandably so as you feel he is undervalued at work), but does he really want to do what you are encouraging, lack of confidence aside - he will work full time then another 4 or 5 hours a night potentially plus weekends?

I know that's what being self employed entails, very long days, 80 hour weeks and no holidays, and also no minimum wage when you start out, but the time is the cost and the rewards come with sacrifices. You both need to want it and be prepared to give it all you have and more, and then some! .

I would also say that home printed flyers in new times roman might not give the right impression (not saying thats what you planned by home printing, but some professional costs can often be a good investment)
Make sure if you are sorting flyers yourself, they look the buisness, are spell checked, perfectly punctuated (unlike my posts) and get straight to the point no waffle (unlike my posts :D:D )
Best of luck
Jex

ETA Horace types faster than me ! Or drinks less, or both!

raineshoe

Don't forget though what he earns now as employed with work out differently when you are self employed. As employed all expenses are covered by the company he is working for. Once he is self employed expenses will come out of your own money, although will be put down to the business. You also have to pay your own tax, NI, pension etc whereas when employed your employer may pay towards your pension. There will be other overheads you haven't considered so if he earns £50.00 in a job as employed and that's what you need, it is likely he'll need to earn more than £50.00 to cover all his business costs etc.

I also agree with the other poster that it is likely to be in his contract that he can't set up within a certain time doing the same type of work.

Savvy_Sue

If you're the one with the driving force, is there anything you could do to make money? You talk about delivering leaflets in the evenings, are there any evening / weekend jobs you could take on? Or do you have a passion that you could make money from?

paddyrg

Look on jobserve.com - every IT job worth having is on there, they are the oldest and every specialist recruiter uses them. I would suggest your OH has a look at the jobs and rates, then gets talking to the specialist IT recruitment companies.

Contract positions will require immediate starts usually, but the permie positions are all up for grabs too, and the rates will be much better than £50/day with a longer start date. Any experience and professional qualifications will pay off massively, so make sure he takes all the *real* (Microsoft, A+, etc - not internal) training he can grab upfront!

Horace

Jexy - I type fast, my average typing speed is 180wpm which is the result of a life time stuck behind a typewriter in an office.

Premier_2

Anoon wrote: »

...However he is concerned that if found out his job would be at risk - however he would not be poaching any current customers or even telling them. He would be finding his own ect. I thought he could do this for a while to build up himself with the stability of an income aswell. He could then think about going it alone in the future if all goes well.

Where do we get started with regards to TAX/VAT registering a new company ect? Does anyone have any ideas? Also do you think this is a good idea? Or would you to be concerned with losing current job.

This is a definite risk and one I would warn about and suggest he takes expert advice.

As an employee, he has certain responsibilities (which exist whether or not explicitly expressed in any written contract).
Essentially it is not to harm the business or employees of the employer.

Stealing customers of the employer would obviously violate this, but one which he doesn't intend to do. However, setting up in competition could also be considered to be violating this basic responsibility, and that may be a problem for him.

Of course, the simplest way would be to first gain the employers permission to run his own company in a similar field to that of his employer's but I guess (a) he doesn't want to ask and (b) is worried what the answer may be if he does ask.

alien1234

You can go to HMRC and you will find most info there