Starting a Small Business/Self Employed

henrygregory

Morning, I am looking for some advice on how to go about the following legally...
I work full time as an employee. A number of places I used to work for in the past as a contractor are asking me if I could supply them with products. They trust me from the past and know I will source them the correct items at good prices, from reliable suppliers. If I were to open a business account with the suppliers and then re-sell the items on to the organistaions in question (making a small profit), would I need to start my own company? Initially, to begin with, I would only be looking at trialing this and would not anticipate making any more than £500 profit in a year. The organistations would be public sector and there could be the prospect of contractual work in the future which I am assuming I would need to be self employed for?

Any suggestions and help would be most appreciated.

PlutoinCapricorn

The standard advice on here is to start as a sole trader and only change to a limited company if and when you earn enough to make this the best option.

However, some companies will only do business with limited companies; if you are buying a lot of products a limited company limits your liability if you own money to the suppliers.

In your position, I would invest some time in Googling "Limited company versus sole trader" and similar expressions and see what you think after that.

Sole trader is definitely best if your customers are happy with that and you know you can sell on whatever you buy.

chalkie99

henrygregory wrote: »

A number of places

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are asking me if I could supply them with products.

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would not anticipate making any more than £500 profit in a year.

You want to deal with "a number of places" which will involve your time, a risk of returns of wrongly ordered/faulty items, etc, all of which will impact on you initially, issue paperwork, keep accounts, submit tax returns, etc, etc, for a measly ten quid a week?

Honestly, ask yourself if you really want to do this.

If you really want to go ahead then make some 'phone calls first to the public sector customers accounts department and ask if they have special requirements for dealing with you. They may require you to be on an approved suppliers list, which sometimes involve fees and often you have to supply company registration and VAT numbers and supply all sorts of red tape stuff like health and safety procedures.

If you need to form a company for such a small return then you are certainly working for nothing and I can tell you from experience that buyers will not tell you in advance that their organisations will not pay you unless you satisfy their rules.

Brassedoff

chalkie99 wrote: »

You want to deal with "a number of places" which will involve your time, a risk of returns of wrongly ordered/faulty items, etc, all of which will impact on you initially, issue paperwork, keep accounts, submit tax returns, etc, etc, for a measly ten quid a week?

Honestly, ask yourself if you really want to do this.

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chalkie99, you are so right, I would not want to waste my time or risk my money if I were the OP. totally the correct advice.

(Btw) public service contracts are 99/100 done via a framework agreement. Something I specialise in completing.

tiger_eyes

Also consider whether your current employer would be happy with you running a business on the side - there may be clauses in your employment contract that affect this.