Setting up a business

Trotskisaurus

Hello

I had some great advice for the people on this forum a year or so ago and was hoping for a little more. I'm investigating setting up a small business from home, while still working full time. I have a supplier set up but, before I take the next step, I was hoping I might be able to get one or two pointers.


* Register with the Inland Revenue

Should I be registering as a sole trader or going down the limited company route? I think the latter has more long-term benefits but i'm not sure if these outweigh the ease of being a sole trader.

* Consider VAT

I really need to get my head around VAT. I am not sure exactly how I work out what I should be paying and how to factor it into my calculations.

* Postage

I've been considering my postage options. I live quite close to a Royal Mail depot so its actually quite convenient for me. However on the parcels I would be sending (1 - 3 kg, medium parcel sized) Royal Mail seems quite pricy compared to groups such as MyHermes, even factoring in home collection, but Royal Mail has the best feedback; anyone has any reliable courier recommendations?

* Sourcing

I have one good supplier lined up. I understand the reluctance of people to name their suppliers but I wondered if anyone has any reliable suggests for searching out manufacturers.


I'm also wondering how going self-employed while also still working will affect my taxes; will it also affect my pension in later years?

Does anyone have any pointers on running a small business?

I know these posts are a ten a penny so forgive me for asking the same old questions, curious to get some feedback though.

goodfelladave

VAT you don't have to charge until your turnover is above a certain level (iirc £77,000 p.a.).

Sole trader has some advantages, less hassle in terms of filing accounts (but tbh I think, don't know, but think accountant's fees are an allowable expense...not entirely sure), but everything you have is up for grabs if it goes bad; the house, the car, cash in your personal account...everything, apart from a few things like tools of the trade (iirc these are treated differently for the purposes of insolvency than other items).

I'd use myhermes if I was you. When I used to do a lot of online selling I used Royal Mail, I shudder to think how much I threw away by doing that. That said I don't have a perfect knowledge of the pricing structure of myhermes; probably easier if you're sending a lot of stuff.

Maybe you should start as a sole trader and then incorporate. Being a ST may make it easier to get credit from suppliers (maybe you don't need credit, but if you do). I think they may be reluctant to give merchandise to what is effectively an empty shell of a company, if you sell it all and siphon the money out of the company they will have an uphill struggle getting their money back . So, maybe be an ST until they get to know you and then incorporate once they know you're trustworthy.

niftyone

A seperate small business section exists, with lots of info and threads about starting up a new business.

http://forums.moneysavingexpert.com/forumdisplay.php?f=27

Trotskisaurus

Thankyou for the pointers goodfelladave! I'd be paying upfront so I like to think i'd be safe as a sole trader, so it sounds like thats the best first step. Oh i'm sorry niftyone, didn't mean to step on any toes!

niftyone

Trotskisaurus wrote: »

Oh i'm sorry niftyone, didn't mean to step on any toes!

Not a problem.

Just trying to be helpful by pointing out the small biz board which contains lots of info about starting and running a biz.:D