STARTUP ADVICE

Most small services/repair outfits start off "doing it on the side", in fact the business self-help books all advise a period of pre-launch experience. I've been on pre-launch for nearly 20 years now.... B-)

But then you get the job which just can't be ignored. El Gordo. The BIG ONE. But you need to be VAT registered to tender etc. So you go VAT Reg etc., and then you realise that your sucked into the morass of VAT, TAX, etc etc. You can't avoid it.

But before you start........ bear in mind the following advice:

• Determine how much you will need to live on, and make sure that you can make that amount each month, every month. On top of that add another 35% to put back into the business. That figure is your monthly target. Keep it constantly in mind.
  
• Pay yourself a wage. You need to live, and it is very bad practice to use the business chequebook or credit card to pay for household or personal expenses. Its not flash, its cheap.
  
• Create at least a couple of business plans based on your guesstimates. Five would be a good number of business plans to have. Remember to make one of them a worst case scenario.
  
• Build up a cash fund of £x thousand. This is called working capital. Look on it as a "gambling pot", because that is what it is. This figure is what profit you would realise from "trading" for 6 months or so. Keep it at that £x thousand level. Don't let it go down. That will cover emergencies like late payers and sudden VAT/TAX bills, and allow you to graciously retreat when the time comes. Here's the quick calc for you: Working Capital = 6 months salary + 35%, maybe about £20k perhaps. A sum like that will also keep the bank manager happy as it means that his risk is reduced.
• Its really not practical to run a business from the kitchen or living room. If you have a small spare room in the house then make it the office / workshop. Do you really need all that workshop / office kit ? You need one PC or a laptop for your financial record keeping, a small laser printer (under £100) for letters & invoices, a copier facility for the occassional document (mutil-function printer/copier/scanner device). You also need a backup device, use an external drive and make sure that you can actually read the documents from the backup drive without having to use other software than the original. I would estimate the basic essential kit should cost no more than £500-£600 + VAT. You also need an office desk and at least one filing cabinet. Total cost about £100. Handbills and flyers can be done on your own PC and printer. Get a professional print shop to produce business cards and compliments slips. Nothing too fancy, and make sure that your telephone number and Googlemail email address is on there. (More reliable than Hotmail etc and accessible everywhere.)
• Do you think that the local solicitors office is going to let you in wearing a hoodie, tee-shirt, jeans and scabby trainers ? Spend some money on a suit, spare dress trousers, shirts, ties, and jerseys. Don't go overboard, you want to look like a business professional, not a professional model. Embroidered jerseys with the enterprise name and logo are always a good indicator of commitment to the long run.
  
• KEEP YOUR FINANCIAL RECORDS CONSTANTLY UP TO DATE. Produce invoices when you do the job, or even before then so that it is ready to present for payment. Set aside a half-day or evening every week for financial control and book-keeping. Use an accounts program such as Quick Books to make it easy, if thats too much just use Open Office spreadsheets for purchase ledger and sales ledger. If even this is too daunting a task then do yourself a favour and seek out a jobbing accountant who will keep you right. Choose one who is in a similar position, working from home perhaps, and definitely small enough to provide personal attention, one who will remember your name and what it is that you do. Your accounts program (which you use at least every week...... ) will prepare your trading figures so that your new-found accountant friend won't have too much to do, and therefore won't charge you too much either. £300 / annum is about right for tax returns preparation and submittal etc.
• Every week compare the target with the actuals, its a great motivator. Don't be too hard on yourself if you don't hit target, some weeks you'll make nothing, often for weeks at a time perhaps. Then you'll get a really good job & it will all seem worthwhile. Its a bit like playing golf. Every month & every quarter compare targets & actuals AGAIN. This exercise introduces the reality factor. Remember that you will have to speak to your bank manager and present to him the astute business person image. You need to know how it is all going and why. Try to become interested in cashflow and the business plan........ B-)
  
• DO NOT GIVE CREDIT. Ok you can be flexible, but no more than a weeks wage for all of the money due from all of the customers. This may seem a bit hard and unrealistic, but remember it is YOU that is paying the bill for the goods or services supplied. You're just starting up, and you need to build up your business. Giving credit is the opposite of what you are trying to achieve. The supermarket doesn't allow credit for your groceries, so why should you ?
  
• Reputation is EVERYTHING. Word of mouth and recommendation is the best advertising. But keep putting out handbills and flyers and make sure you have a compliments slip and business card to hand out. If you can afford it buy a small economical van or an MPV, as clean as possible, and get professional stick-on signage applied. The van/MPV is a travelling advert, so don't park it at the pub all the time. It's also an ASSET which will DEPRECIATE in value over time. A three-year old van is worth less than half its new price, a six-year old van is worth next to nothing. Buy a diesel model, it's not a race, it's for getting you to your job and back and is a travelling advert. Most vehicles are pretty reliable nowadays, unless they've been thrashed. My favourite is Puegeot 206 vans, then Ford Fiesta vans, and Citroen Xsara Picassa MPVs, which have loads of room and are pretty good on fuel consumption. They also have loads of advertising panel space.......B-)
  
• If there is a free-sheet in your area, then use it. They love filler stories which makes them look like a real newspaper. New business start-ups are always a good read. Other local newspapers are usually quite expensive to advertise in.
• Give good quality service. Don't break the LAW. VAT & Income Tax have to be paid, and that's just a matter of correct business practice. They won't cause you to lose sleep and hair. Trading Standards and the Sale of Goods Act will cause involuntary loss of control in your nether regions if you cross them. Do not go there.
• BE PROFESSIONAL AT ALL TIMES. Don't badmouth the competition. A professional will take the stand that there is room for everyone. Of course, the best will rise to the surface and survive, the rest will sink. THINK TWICE before you open your gob, remember that what you say can be misconstrued, and it often is. You are your own PR department.
  

After a year or even two years if you haven't made enough to cover all the bills including tax & vat, & if the gambling pot is less than when you started, then just GET OUT.

Straight away.

Don't hang around and hope that you will trade your way up..... it ain't gonna happen.

You will have had some fun, made a pound or two perhaps, gained a load more knowledge and perhaps a good reputation.

You will also have the knowledge, abilities, skills and perhaps funds to start again, maybe in a different arena of trading.

Good Luck....... B-)