Advice for going self employed.

[Aire]

Hi everyone, as the title says I'm looking at going self employed, I'm 31 and worked for 2 companies over the past 14 years so feel it's time for me to take control and be my own boss.

Naturally I'm little nervous about what to expect and my biggest worry is keeping the work coming in. Most people I've told have all given me positive feedback and said they'd throw work my way so that's a good start.

I'm going to give myself around 6 months to get everything sorted, some of the stuff I use like gas analyser, core drill etc is supplied by the company so I would need to get my own, I've currently got the sprint evo 2 which I like, would there be any benefit to upgrading to the evo 3 or pro?

What do you advise regarding vans? I've had mixed responses, get a cheap van that could spend more time off than on the road Or spend more with the hope that customers won't be an issue and the van will pay for itself.

I'm also concerned about my lack of servicing and repair experience, my back ground is predominantly boiler/heating and bathroom installations so when things have failed it's been manufacturers who have done the repairs, not myself.

There's probably loads of questions I could ask but is be writing all night, I would appreciate any advice you guys could give me, things you've learned since you set up, things you wish you'd done differently, any help would be great.

Many thanks

 

[townfanjon]

Give 100 % commitment on everything you do and you will be successful.

Work your arse off , but be clever also .

Dont moan when someone calls you on a Sunday.

Good luck .

 

[snowhead]

Are you already registered with Gassafe in your own name?

 

[Aire]

Give 100 % commitment on everything you do and you will be successful.

Work your arse off , but be clever also .

Dont moan when someone calls you on a Sunday.

Good luck .

Thanks For the reply, to be fair I get called most weekends anyway, the construction firm I work for only has one plumber (me) so I'm always offered overtime and callouts etc. I'm certainly not work shy.

 

[Aire]

Are you already registered with Gassafe in your own name?

Not currently, my gas safe is through the firm I work for.

 

[999]

Get some insurance, you just never know when you will need it

 

[Murdoch]

Going SE means working 7 days a week .... there is always admin to do, customer visits, invoices, stock to order .......

And you need a business account with plenty of cash in it before to take the plunge .....

Keep ALL receipts .... and let your accountant deal with HMRC ....

 

[DGT plumbing]

If you do your best at all times the work will come in. Follow your gut instinct. Don't take on too much. Always be confident but honest in front of the customer. Learn to say no. Get a decent van, you can't afford not to be without it. Don't lend stuff. Don't do favours, you never get them back or when you do there value has gone down. Get good insurance, that way you should never need it. Just go for it.

 

[chris watkins]

Without fail put 20% of everything you earn away, never ever be tempted to dip into the pot. In that way you will always have the money to pay your tax.

Look around at different business accounts some banks are offering free banking for a year or more. (just moved to co-op from HSh!tBC)

Get in place a set of T&C's, get a card machine & take payment on completion.

 

[Murdoch]

Without fail put 20% of everything you earn away, never ever be tempted to dip into the pot. In that way you will always have the money to pay your tax.

100% agree

I buy premium bonds every month ........... then get the money out when my tax bill arrives!

And yes I do get winnings ........... never big so far but you never know!

 

[gingalig]

Invest in Gas engineer sofware or similar it generates all your certs, invoices and quotes, it saves time and money and is deductible.

I had the van debate when i went self employed, and went for a cheaper but well looked after tidy Hiace, my customers told me it was the man not the van that they were interested in. Dont be afriad to call tech support on boiler breakdowns it's there job to help you. If i was unfamiliar with a boiler issue I found this place has some absolute stars as well.

Good luck

 

[bacon_sandwich]

Agree with above, on breakdowns i do my best with the servicing manuals which i keep on my laptop (easier to read than using a phone) but probably call tech support a couple of times a year as i hate changing parts at random with the hope it fixes it.
Vans can be a huge overhead so would not recommend a nice new shiny van on finance at the outset, get established first.
Gas safe application for your new company and insurance to get you going , build up contacts for future work and consider subbing for the first year or two.
You wont regret it, i think, i could not be an employee again. BUT sometimes when your phone rings 22 times a day (like Monday for me)and you are trying to get a job done, you do sometimes reminisce about the good old days... lol

 

[shyguy2005]

Work out you daily running costs to keep van on the road, insurances , gas safe costs, accountant fees etc .

Then you know how much money you need to charge people each day to pay that and make a living.

Good luck.

 

[Aire]

Thanks for all the replies so far guys, really appreciate it.

I had thought about a card reader, avoids the "I haven't been to the bank yet, can I pay you next week" . Do any of you find getting paid a struggle? Again it's something I've had mixed opinions on, some do some dont. Do any of your require deposits for expensive jobs?

I like the idea of buying bonds with tax money. Keeps it safe so I definitely can't spend it so thanks for that.

What do you guys do regarding vat, should I register straight away or see how things go, there's probably pros and cons either way.

Regarding accountants, do you lot try keep on top of everything week by week or just save everything and give it to your accountant to sort at the end of the year?

 

[firemant]

Re the van. It is a dillema. I would say not to go overboard initially. Six months or so into SE may be necessary before you can make a valid decision on the type/size of van. Buying a brand new or leased van will ensure you are stuck with the, possibly wrong, vehicle.

 

[gingalig]

Card readers are great ( tried Paypal but now use sumup ) , I think you can usually get a gauge on someone and if they seem a bit off, I tend to bring up "oh, ill be done fairly soon, by the way how would like to pay ? " at which point you can tell what sort of customer they going to be. To be fair 99% seem pretty reasonable and pleased you're there sorting out whatever issue they have. You always get the odd one, if I doubt someone I'll not issue the certificates for example, or until i've established how I'm paid, I wont quite finish the job as I need to go get that part etc, but thats incredibly rare, (maybye I've been lucky). I try and keep my paperwork in order weekly, should be daily really and then let my accountant deal with it at the end of the year, the better organised the more relieved they are and cheaper it is for you as well as knowing where you are financially. As for Vat registration, I wouldnt bother untill you know how its going to work, although you'll need to keep an eye on your turnover before you hit the threshold. Theres a lot of hidden expense and time spent that you need to account for, so make sure you price accordingly. Better to not get the job than end up paying for it. As for deposits, I prefer not unless its a really big job, but if im unsure of the client then I like to cover costs. ( time to develop the spider senses )

 

[Pickwickpick]

Re your accountant, speaking as an ex auditor who does a bit of bookkeeping to help a couple of mates out, if you just dump a bin bag of paperwork on your accountant once a year (it happens a lot) it will cost you a lot more to get your books done than if you keep on top of it and keep it organised.

Regarding being paid on time, yes can be .bit of a struggle sometimes, often not due to malice but they will forget to have gone to the bank, forget to do bank transfer when they said they would... If you can get a card reader without it eating up too much of your margins it might not be a bad idea as it's one less excuse, iirc there are some pretty affordable options out there now card reader wise but as always you need to do you research carefully & read the small print.

Regarding VAT I'd personally wait until you are over the threshold, yes you can get back VAT on tools/materials but you also have to charge it on your revenue. Especially if you make a mark up on materials (which you should) you will pay more than you save. It will also considerably increase your bookkeeping/accountants cost and generally make like more complicated than needed in your first year or two which imo is not a great idea.

Regarding deposits, if it's more than a couple days work I always require materials (+mark up) up front, if it's a week or more I also ask for 25% deposit and sometimes do a schedule with a payment part way through on the longer jobs.

Also remember your first your tax wise if you will almost certainly have to make a payment on account ehich is a double whammy but that nets out after initial tax bill.

 

[Murdoch]

Regarding VAT I'd personally wait until you are over the threshold, yes you can get back VAT on tools/materials but you also have to charge it on your revenue.

BUT be very aware that HMRC can decide which 12 months they want to measure your revenue over.

I was chatting to a GSR the other day, SE for about a year, got 1 staff member and isn't VAT registered ........... how he can keep below the £84K revenue is beyond me......

 

[Gasmk1]

BUT be very aware that HMRC can decide which 12 months they want to measure your revenue over.

I was chatting to a GSR the other day, SE for about a year, got 1 staff member and isn't VAT registered .. how he can keep below the £84K revenue is beyond me....

depends how he bills he may well get the customer to pay for materials so he only bills labour,

 

[Murdoch]

depends how he bills he may well get the customer to pay for materials so he only bills labour,

Certainly didn't get that impression.........

 

[SimonG]

I always thought it was a rolling 12 months?

 

[Murdoch]

I always thought it was a rolling 12 months?

No - HMRC can decide which 12 months ............ so if they decide you should be VAT registered, they send you a bill for 20% .......... so if you haven't charged it , you still have to pay up!

Paying 20% to HMRC would be very painful IMHO

 

[DGT plumbing]

Do any of you find getting paid a struggle? Again it's something I've had mixed opinions on, some do some dont. Do any of your require deposits for expensive jobs?

In 15 years I have had one none payer, which was a well known DIY chain and two slow payers both of which were this year. So a pretty good ratio really. Never asked for deposits up front although sometimes I wished I had. Never been VAT registered.

 

[Aire]

Thanks again for the further replies, so on all your advice I'll start with a reasonably priced tidy van, nothing fancy, I've got some tools but figure I'll need around 2k to get the other bits I need (analyser, core cutter, magna clense) and will look at spending around 3k on a van to start with, if work comes in thick and fast then I can always sell and upgrade. What's the cost for gas registration? Just trying to figure out what everything will cost me. I'll look into public liability but that will be further into next year.

I'll go see my bank to see what they can offer me regarding business accounts and then see how they compare to others.

I'll also contact local accountants and hopefully have a sit down with them so they can run through how to manage my books, I'm practical but crap when it comes to paperwork so this will be my biggest downfall.

The VAT thing worries me but I suppose after the first 6 months I'll roughly know whether I'll get anywhere near the threshold and worry about it then.

I'm going to be fair with my current employer and give them a good 4 months notice, don't want to drop it on them and leave them in the Rubbish, they're a small local construction firm who could possibly give me quite abit of subby work which will certainly help for the first year while I establish myself.

One thing I've been racking my brains over is company name, does it actually matter? What about van signage? Again this is something where opinion varies from person to person, I know ultimately it's word of mouth whats going to get you work but even if you get 2 jobs from someone seeing your van then surely it's worth it.

 

[Gasmk1]

I always think a nice clean tidy van with well designed signage looks the business and people do notice.