Redundant so time to go it alone! 28 July 2022 at 12:23PM in Employment, jobseeking & training 8 replies 404 views

Barry_Spock

Hi, i'm new here!

Was recently made redundant so I feel it's finally time to do something I always wanted - start my own business!

Thing is - where do i start? It's scary stuff. My business will be owned by me and my partner. It's a graphic design business. We will operate from home and already have the equipment we need.

Where do we start to get set up? Should i register at companies house (we have a name agreed). I guess i need an accountant but we're so small i don't want a large accountancy firm. A business bank account? I have bought our URL domain and registered across social media. I can build our website.

I guess my main confusion is around actually setting up - legally, financially etc. Does anyone recommend a guide or have any advice please? Thanks.

Sandtree

The gov.uk website has plenty of guides but in the first instance its probably worth a conversation with one or two local accountants.

You dont register with Companies House unless you've decided to form a limited company (or limited liability partnership) and then many accountants will do this for you for direct costs as part of taking you on as a new customer. Allows them to register themselves as your agent at the same time to avoid faff later. 

First thing to do is a business plan and personally would recommend particularly focusing on how you are going to win business and how much you will charge for your work. I've seen too many fail because they had a "we will build it and they will come" mentality and totally failed because not only did they not secure the volume of business that they had predicted but the time/effort to secure the business they did was vastly more than they had thought and so billable hours at the rate they were charging didn't work for them. 

Barry_Spock

Thank you. I have shortlisted a few local accountants so will set up meetings. 

I have a biz plan and biz dev plan in place.

SensibleSarah

I did something similar just over a year ago, although I quit my job rather than being made redundant - couldn't face having to go back to an office environment. I work in digital content - words more than designs though! I decided to go down the sole trader route at first just to keep things as simple as possible. Can't see the benefits of being a limited company at the moment for my circumstances. I just informed HMRC when I started that I was a sole trader and was sent the self-assessment details etc. I set up a business bank account for my invoices to be paid into and that's pretty much it. 

Well done on getting your business plan etc sorted. I have found that literally all of my long-term clients have come from existing business relationships (basically all people I had worked with in the past at various jobs in the same industry as I now freelance in), which has been brilliant and I am in the very fortunate position of not having to actually look for new clients at all. I put the word out on LinkedIn that I was going freelance and thankfully I've been maxed out with ongoing regular work ever since, which is a huge relief and has meant that I haven't even needed to sort myself a website etc. Obviously, that might change at some point in the future, so I'm making as much hay as possible while the sun shines, without doing really crazy hours etc. Eventually I don't want to work full-time, but that's not realistic at the moment.

I have no need for an accountant currently as I can do my books in spreadsheets etc, with minimal invoices and expenses going on and I'm below VAT threshold and always plan to be - this is me working for myself and selling my time as a service, not building an empire. It would be a different story if things were more complex or if I moved to a ltd company of course. 

Good luck with it all. It's genuinely the best work-related decision I've made in a long time and I love the flexibility I now have. My day to day work isn't that different from previous jobs, but doing it on your own terms is where the difference lies! 

ACG

Register your limited company.
Set up a business bank account. 
Set up your website/socials etc. 
Come up with a business plan. 
Start trading. 

Keep records of any purchases you make (your domain name, company registration, hosting etc) and your income and also any mileage you do. 

You do not need to worry about accounts/self assessments etc until after April next year so there is no urgent need for an accountant. But there is no harm finding one sooner rather than later as they may be able to offer pointers.

On the business plan front, this is not something you need. But the bank will likely want to know how much you intend on earning, what you do, how you will get business so having a think about this will help. I did a business plan before I set up. I came across it a few years ago. Its interesting as my income in year 2 was fairly accurate, but where that income came from was completely off. 

Even now, 10 years on around Christmas time as thats our quiet period I start to put a plan together for the year. Important dates, quiet periods, busy periods, blog post ideas and so on. I do not always stick to the plan as things change (it normally goes out of the window by May), but if I go quiet I have a thought out plan for that period rather than a rushed out idea to try and generate business. 

Also have a think about your business. You say graphic design, but you are going to be up against people on sites like pph/fiverr who will do what you do at a fraction of the cost. Are you going to try and compete or are you going to set yourself out differently in order to charge more? Are you going to specialise in a particular industry/area (if thats feasible) or will you just do whatever hits yoru desk? I set out as a generalist mortgage broker, but then started to specialise based on the enquiries I was getting and what I enjoyed the most for example. So what you plan might not happen, but again having a plan can help I think. 

I was told once to think about how much I wanted to earn and then work backwards from there, in order to earn that, how much will I earn from each customer on average and in turn how many customers will I need. How will I get those customers and how long will it take me to get that many customers each month/year on a regular basis. That really helped me to plan how much I need to charge. 

The first 6-12 months are hard (VERY hard). I was not earning enough, I had very little work and I was getting quite down about it. It took me about 8 months before I was earning enough to contribute to the household regularly and it was not a lot (that meant I went without nights out etc which at 26 was the worst thing ever). It took me 18 months before I was earning a wage and after that things improved and got easier. 

Despite the bad bits, I am 10 years in and all is good now. The bad times build character and all that, but it rarely just works so just be prepared for a long hard slog in the early days and the self doubt. But if/when it works, its worth it. Good luck. 

rubble2

I did this about 20 years ago (now retired) It is pretty daunting at first but I think you get to the stage where you really cannot face the prospect of 'dancing to someone else's tune' any longer.

I have no regrets about having made the move and nothing beats the buzz you get when you start winning new business by yourself and for yourself.

Good luck with your venture.

Barry_Spock

SensibleSarah said:

I did something similar just over a year ago, although I quit my job rather than being made redundant - couldn't face having to go back to an office environment. I work in digital content - words more than designs though! I decided to go down the sole trader route at first just to keep things as simple as possible. Can't see the benefits of being a limited company at the moment for my circumstances. I just informed HMRC when I started that I was a sole trader and was sent the self-assessment details etc. I set up a business bank account for my invoices to be paid into and that's pretty much it. 

Well done on getting your business plan etc sorted. I have found that literally all of my long-term clients have come from existing business relationships (basically all people I had worked with in the past at various jobs in the same industry as I now freelance in), which has been brilliant and I am in the very fortunate position of not having to actually look for new clients at all. I put the word out on LinkedIn that I was going freelance and thankfully I've been maxed out with ongoing regular work ever since, which is a huge relief and has meant that I haven't even needed to sort myself a website etc. Obviously, that might change at some point in the future, so I'm making as much hay as possible while the sun shines, without doing really crazy hours etc. Eventually I don't want to work full-time, but that's not realistic at the moment.

I have no need for an accountant currently as I can do my books in spreadsheets etc, with minimal invoices and expenses going on and I'm below VAT threshold and always plan to be - this is me working for myself and selling my time as a service, not building an empire. It would be a different story if things were more complex or if I moved to a ltd company of course. 

Good luck with it all. It's genuinely the best work-related decision I've made in a long time and I love the flexibility I now have. My day to day work isn't that different from previous jobs, but doing it on your own terms is where the difference lies! 

Congratulations - that sounds amazing. You made the right choice.

Barry_Spock

ACG said:

Register your limited company.
Set up a business bank account. 
Set up your website/socials etc. 
Come up with a business plan. 
Start trading. 

Keep records of any purchases you make (your domain name, company registration, hosting etc) and your income and also any mileage you do. 

You do not need to worry about accounts/self assessments etc until after April next year so there is no urgent need for an accountant. But there is no harm finding one sooner rather than later as they may be able to offer pointers.

On the business plan front, this is not something you need. But the bank will likely want to know how much you intend on earning, what you do, how you will get business so having a think about this will help. I did a business plan before I set up. I came across it a few years ago. Its interesting as my income in year 2 was fairly accurate, but where that income came from was completely off. 

Even now, 10 years on around Christmas time as thats our quiet period I start to put a plan together for the year. Important dates, quiet periods, busy periods, blog post ideas and so on. I do not always stick to the plan as things change (it normally goes out of the window by May), but if I go quiet I have a thought out plan for that period rather than a rushed out idea to try and generate business. 

Also have a think about your business. You say graphic design, but you are going to be up against people on sites like pph/fiverr who will do what you do at a fraction of the cost. Are you going to try and compete or are you going to set yourself out differently in order to charge more? Are you going to specialise in a particular industry/area (if thats feasible) or will you just do whatever hits yoru desk? I set out as a generalist mortgage broker, but then started to specialise based on the enquiries I was getting and what I enjoyed the most for example. So what you plan might not happen, but again having a plan can help I think. 

I was told once to think about how much I wanted to earn and then work backwards from there, in order to earn that, how much will I earn from each customer on average and in turn how many customers will I need. How will I get those customers and how long will it take me to get that many customers each month/year on a regular basis. That really helped me to plan how much I need to charge. 

The first 6-12 months are hard (VERY hard). I was not earning enough, I had very little work and I was getting quite down about it. It took me about 8 months before I was earning enough to contribute to the household regularly and it was not a lot (that meant I went without nights out etc which at 26 was the worst thing ever). It took me 18 months before I was earning a wage and after that things improved and got easier. 

Despite the bad bits, I am 10 years in and all is good now. The bad times build character and all that, but it rarely just works so just be prepared for a long hard slog in the early days and the self doubt. But if/when it works, its worth it. Good luck. 

Thank you. It's daunting and exciting. I'm specialising around a very particular area that most designers i know don't work in.

Barry_Spock

A few questions for you guys if anyone can help. 

Since my original post, my partner has also been made redundant (quite a yer so far!). She's a designer so we figured it could be great to create this design agency between us. I'll run the business/marketing/commercial/biz dev and she will design projects that come in along with freelancers for overspill.

Thing is, she has also been very lucky in winning a big chunk of work from a company in Australia. This in theory is enough to keep her going but she is still keen to do our thing (understandably) and will have capacity to still do it.

I have a few questions.

She is expected to earn around 65k from her freelance work. They're in Australia put pay in pounds. How much should she be putting away?

I do some work for her too such as strategy, copywriting etc. - i guess i can invoice her and she can pay me (rather than just giving me money whilst i'm still not earning)? 

How does it work with her being freelance but also potentially owning a separate business? Any concerns?

We need some kit/computers as what we have isn't good enough. Is there a way to offset/put that through the business and do we need an accountant before doing that? Do she put that through as being self-employed or do we put through the business?

Thanks!