A bit of new business guidance

blt

Hello,

Could anyone point me in the right direction for some clear "starting your own business" information. It needs to be simple!!

I work full time but am looking to have a small business on the side renting sound equipment. I *think* that a limited company is the way to go...but to be honest I'm not sure. I have a second business idea for the future so want to try and find out the better way of organising things now.

So, any advice would be appreciated. I also want to know if whether if I set up as a limited company, if I have to pay myself a wage? I know that might sound a bit daft but initially I am anticipating quite a bit of outlay - for example my Kia Picanto isn't nearly big enough so I was looking at doing a business lease on something more practical.

Helpful comments only please! Although I am not a newbie, I am new to this section of the website and haven't actually been on MSE for years.

Thanks for your time everyone x

phill99

People always seem to think they need a limited company to run a business through. There are advantages to having a limited company. The main one being that any risk associated is not a personal risk.

If you are setting up a business that will have a high level of risk, then a limited company is ideal.

However, the costs if administering a limited company are far greater than just being a sole trader (ie self employed) and the administration is ad more onerous. As you ate starting as a side line, yo could find any profit you make is severely reduced by extra accounting costs.

Staying as a sole trader is far more cost effective, especially in the short term. If things progress, you can easily set up a limited company later on. Make sure to get liability insurance in case something goes wrong with something you hire out.

Savvy_Sue

As above, but perhaps worth pointing out that some people think that a ltd co is the way to go because they're going to need to borrow money and they think being in a ltd co will protect their assets. It won't: highly unlikely that anyone will lend money without a personal guarantee from the directors, ie if the company goes bust the lender CAN go after the individuals.

The old businesslink site would have been ideal, if you google that you'll get to something dumbed down, but it's a starting point.

motorguy

blt wrote: »

Hello,

Could anyone point me in the right direction for some clear "starting your own business" information. It needs to be simple!!

I work full time but am looking to have a small business on the side renting sound equipment. I *think* that a limited company is the way to go...but to be honest I'm not sure. I have a second business idea for the future so want to try and find out the better way of organising things now.

So, any advice would be appreciated. I also want to know if whether if I set up as a limited company, if I have to pay myself a wage? I know that might sound a bit daft but initially I am anticipating quite a bit of outlay - for example my Kia Picanto isn't nearly big enough so I was looking at doing a business lease on something more practical.

Helpful comments only please! Although I am not a newbie, I am new to this section of the website and haven't actually been on MSE for years.

Thanks for your time everyone x

Be very careful in buying up lots of sound equipment in the hope you can rent it out - it usually drops to half its value pretty quickly so you could struggle to recoup your outlay IF things dont go to plan.

Also, instead of jumping in to lease a van, why not buy a bigger car - Zafira springs to mind - OR a bigger car with a trailer? Failing that, £1,000 - £1500 can buy you quite a lot of Transit Van without having to commit yourself or your business to a lease. Actually, not sure you would get a lease with a new limited company.

Mistral001

blt wrote: »

Hello,
Helpful comments only please! Although I am not a newbie, I am new to this section of the website and haven't actually been on MSE for years.

Thanks for your time everyone x

It depends on whether you regard this as a high risk venture or not. I do not know much about the business, but since it does require buying what I assume is quite a bit of expensive equipment, it might be fairly high risk and you would need some sort of protection for your personal assets.

Probably best to discuss with an accountant though.

paddyrg

Most people who need a PA actually need a full-service with a FoH engineer and maybe even monitors. That means 2+ people to unload the van, set up the desks etc. If you let the kit go out on dry hire, there's every chance it'll come back knackered, so you do rather want to be there with it anyway.

blt

Thanks everyone for their helpful contributions. I think I'm going to look at the "self employed" route. You're right, I had assumed that being a limited company would afford more protection but if being self employed is an option, then that could possibly be a better idea.

I'll have a look at the old business link information.

Thanks again everyone - much appreciated!

Oh, and this might be a daft question, but you can still set up as a company but be self employed...if that makes sense? I mean name wise. So for example, I could set up "The Bees Knees Sound" instead of just using my name?

Cornucopia

You mean "blt trading as Bees Knees Sound"? Yes - that is acceptable.

You would be using that, together with your home address as the trading identity on your various bits of paperwork.

Mistral001

blt wrote: »

Oh, and this might be a daft question, but you can still set up as a company but be self employed...if that makes sense? I mean name wise. So for example, I could set up "The Bees Knees Sound" instead of just using my name?

Yes you could do that, but remember to put your name and address on somewehere on the invoice as well.

Legally "The Bees Knees Sound" will not exist as an entity. You will be personally responsible for all finaces.

Mistral001

Just a comment on this thread and not the OP.

This must be the only thread I have come across where the OP asks for help and then does the opposite of what nearly everybody here advises. Not great for our self esteem guys is it?

paddyrg

One advantage of going ltd, btw, is if the company is growing and you start sending out crews (so you can keep the employment side of things tidy). Also, as a ltd company, you can sell shares to potential investors if you need to finance growth etc.