14 • INDUSTRYNEWS
PROUD SPONSORS
OF THIS PAGE
BACK TO BUSINESS BASICS
» » STARTING A BUSINESS IS NOT
terribly hard but neither is it really straight-
forward. Benjamin Dyer of Powered Now
looks at the main issues you need to think
about when you go solo…
In this short article I try to cover the
things you must think about to start a
successful business. The danger is that
you won’t be around for long unless you
have all of them ticked.
THE LEGAL THINGS NEEDED
The good news is that as a new business
it is unlikely you will need to register for
and charge VAT. Nor is it likely you will want
or need to ‘incorporate’ as a limited liability
company. This makes things easier.
The things you do need to think about
are registering as self-employed, keeping
accurate records and filling out a tax return
once a year. Then there’s any health and
safety legislation applying to the particular
trade you will be working in.
You must register as self-employed by
the 5th of October following the end of
the tax year (5th April) in which you started
your business. Your first tax return and tax
payment will be due by the following 31st
January and you must submit this online.
For example, if you start your business
on 7th January 2019, you must register as
self employed by 5th October 2019. Then
you submit your tax return electronically
and pay your tax by 31st January 2020.
Searching the HMRC web site will turn up
more detailed instructions.
You will pay income tax on the difference
between your sales and costs, but more
than the first £10k tax is free. You may also
need to repay part of your student loan
as well as Class 2 and Class 4 National
Insurance. In later years, HMRC may require
an advance payment for the following
year’s tax bill. You must always put money
aside for your tax bill all through the year.
If you hire anybody as an employee,
there are quite a few additional rules to
follow.
You need to record all of your sales
on invoices. My suggestion is that you
base the layout of your invoices on ones
that you receive from other businesses,
ignoring VAT.
You should keep a record of all of
the costs that are associated with your
business and that includes your receipts
and invoices for all charges. This is not
just for the obvious things like materials,
tools, van costs and petrol for travelling
to jobs. You can also usually claim for a
share of the costs of running your house.
That is if you use it sometimes for doing
paperwork, storing materials etc.
Although there will be some fees, it’s
worth getting an accountant who will
advise you exactly what you can claim
for. This will help you to legally minimise
your tax.
THE TRADE-RELATED THINGS NEEDED
Whatever trade you specialise in, you
need to be good at it and not too slow.
Going solo because you have been fired
for incompetence is the ticket to a life of
pain. Don’t go there. It’s also important
to have the right tools. Scrimping here
tends to be a false economy.
THE BUSINESS-RELATED
THINGS NEEDED
To run a successful business, you
need to have a good business head.
That primarily means being able to win
business at the right price. It means not
discounting or charging too little. This
takes discipline. You have to cover tax
and national insurance, your holidays,
any sickness, the cost of tools, your
accountant and more. The biggest
reason for new businesses failing is
charging too little.
The first way you will win business is
by word of mouth. That’s why doing a
good job is so important. This may be
enough if you always intend to be a sole
trader. If you want to grow you will also
need to market your business.
Finally, when the work is done you
need to get your invoice out quickly.
Then chase it in a timely manner if there
is any delay in payment.
AT THE END OF THE DAY
Starting your own business can be a
liberating experience. It can also be fun.
At the same time, there are headaches
and you only “eat what you kill” which
can be terrifying. Good luck!
www.powerednow.com
LOCKSMITHJOURNAL.CO.UK | MAY/JUN 2019
Sponsored by Mul-T-Lock