is it worth starting up on my own?

[tomo51]

hi im an electrician of 10 years and have my 2391 i live in the the lancashire area and have recently been offered the help financialy by a family member to start up on my own. Obviously this was very appealing to me but with the current climate i am wondering if there is still enough work out there to make a real go of it.they have also asked me how much money i would need to do this. any advice would be much appreciated!

 

[b-spark]

What sector do you do best ind/com or domestic/sites

 

[tomo51]

over the ten years ive mainly worked industrial and comercial sites so i would say im best in this area but i have done my fair share of domestic work too. im looking to start up doing domestic work

 

[b-spark]

Personally dont do the domestic side of things much. I think it has to many fish in a small pond. Its the first stop for the straight out of college or unemployed spark. If you know about motor controls,motors basic industry stuff,start into that.
Loads of little units,car garages and the like. Go round and talk B2B. I started out doing that. people like to keep there hobbies/business going. Then if you get domestic work in aswell, all money is good monie!

 

[accordfire]

over the ten years ive mainly worked industrial and comercial sites so i would say im best in this area but i have done my fair share of domestic work too. im looking to start up doing domestic work

Well, for domestic, as you know, Part P - and scheme.

There's no reason at all why not to go it alone.

The key criteria isn't really how much you know about electricity, although clearly that helps KEEP customers. The real trick is in getting them first, and in setting up and running a business that stands the test of time!

You need to identify some things first, like what it is you want to achieve out of running your own business - in terms of do you just want to make a living, or do you want to take over the universe? That has a bearing on how and what you do.

Look into business link courses in starting up, marketing, sales, and so on - mostly free.

Banks - they can help with information, and don't necessarily assume they are the only, or best place to get money help - obviously you need a bank account for trading though. Advice here - INTERVIEW potential business managers - make sure you get a named one who is available in your branch at least some of the time (many don't offer this any longer), and make sure you can get on with him/her - it's more important than you think.

If you are borrowing money at all, it's worth considering forming a limited company, although most lenders will want personal guarantees too, it will limit some of your liability, and ensure transparency for lenders.

The real art of business, however, remains in getting customers to buy in to your proposition. That's the area to work on first and foremost.

 

[Marvo]

I think being self employed was the best move I ever made. That said I know a lot of very competant tradesmen who are self employed and who don't make money because they don't have one iota of business knowledge. I would suggest you do a small-business course first to get up to speed with the basics.

 

[tomo51]

my main concern is there the work out there at the minute? with the current climate and the state its in? as i am employed at the minute by a large contracter, is it possible to start up a buisness part time while still keepingmy job. and at what point would i decide to quit my job a go full time with my own buisness.

 

[accordfire]

my main concern is there the work out there at the minute? with the current climate and the state its in? as i am employed at the minute by a large contracter, is it possible to start up a buisness part time while still keepingmy job. and at what point would i decide to quit my job a go full time with my own buisness.

Well, as I tried to say - yes, if you look for it, and work hard to get it. That was really the point of what I was saying.

It's perfectly possible to start a business any time at all, providing you're clear on tax implications - an accountant will help you there, and providing of course, that your current contract of employment doesn't prohibit you from doing so.

Essentially, the decision to quit your job and go full time would be the point you are comfortable in doing so - there's no rules for that. Presumably, you would want to keep the security of employed income until you were clearly making enough from self employment to pay your way and support yourself - this is the reason I encouraged you to look at what it was you wanted to achieve from being self employed.

 

[telectrix]

Well, as I tried to say - yes, if you look for it, and work hard to get it. That was really the point of what I was saying.

It's perfectly possible to start a business any time at all, providing you're clear on tax implications - an accountant will help you there, and providing of course, that your current contract of employment doesn't prohibit you from doing so.

Essentially, the decision to quit your job and go full time would be the point you are comfortable in doing so - there's no rules for that. Presumably, you would want to keep the security of employed income until you were clearly making enough from self employment to pay your way and support yourself - this is the reason I encouraged you to look at what it was you wanted to achieve from being self employed.

personally, think it's a good idea to keep your employment going, build up your own work gradually till you reach the point when you have enough work booked to fill your time. when you find yourself working for yourself sat. and sundays, then go it alone. don't forget public liability insurance. it's not too expensive and could save you going bankrupt

 

[Octopus]

You should start with some basics, make a list of all the costs to start up, such as tools equipment, vehicle, insurance, clothing, etc, then look at the "monthly" costs such as advertising, fuel, NI, etc then you'll have a good idea of what your basic overheads are.

Once you've got these numbers you'll know how much you need to earn to cover your costs each month.

Then the difficult bit - if you're currently employed can you afford to have no income for a while?

Good luck!

 

[ian]

I will disagree with some of the previous posts. Its always difficult starting your own business and to be honest it’s a gamble, but I think you can mitigate the risk by starting a business in the right climate, and I don’t think this is that climate. There are far to many electricians starting businesses in a market (at least in this area), which has not increased.

Take my business as an example; I have 12 regular customers ranging from small factories to large landlords they contribute 65% of my work. The other remaining 35% I have to go out and find, and frankly its really difficult at the moment to make a prophet on those jobs, mainly because there are to many other electricians pricing for the same work, this drives down prices. Within a mile of me there are at least 4 new businesses which have started within the last 6 months, and almost every time I drive by there vans are parked in their drive.

Personally, I would wait for a couple of years until some of the industrial sparks who have started there own businesses leave and start working on sites again.

But that’s just my opinion.

Ian

 

[SirKit Breaker]

Starting out needs some serious planning. You need to work out your fixed costs, that is everything you need to pay for whilst being self employed, and i mean everything. Mine works like this. The wife works, and her wage pays all the monthly standing orders for the household running costs, it also pays the costs for her to live, like mobile phone, car fuel, tax, insurance etc, then there is a bit leftover, this is her spending money for things like nights out, shoes and handbags. What she doesnt spend goes into our joint saving account. My side of the deal is that i have to bring in enough for us to live on for food, holidays and life's luxury's. My fixed cost's are Part P fees, van running costs, tools and equipment replacement, various insurances, accountant, work wear, and so on, your's maybe different. Once i have worked out my fixed costs i then add on how much i need to earn for us to live, and how many hours i want to spend earning it including time spent at home working on the business, add this lot together and that is my break even point. Then i decide how much profit i want to make. Add the whole lot up and this will give you your annual cost of trading as self employed.

Take the annual figure, divide it by how many weeks you want to work, this will give you a weekly wage, divide it again by how many hours you want to work per week, and you now have your'e hourly rate. Only you can decide if this figure is competitive enough for you to go it alone. Its no good just sitting down and saying, OK i am going to go self employed next week, and i will charge £ X per hour. You need to know exactly where you stand, if you just go in on a whim you may find that you need £50 per hour, if you trade at £25 then your venture will end in tears. If you need to get finance from a bank you will need a business plan, and this is the first bit of information they will want to see. If you cant show where you're profit is coming from, then they cant see how you will repay them, and you know what the answer will be.

Dont forget to factor in any tax liabilities, after the first £5000 or so you will be liable for income tax and NI, set aside 28% of your income to cover it, 20% income tax, and 8% NI. If you turn over more than about £1300 per week you will also need to be VAT registered.

Enjoy

Cheers...........Howard

 

[Octopus]

For the tax year 2011/2012 take a look at the rates on the link.

2011 Tax rates thresholds

Yes, the tax threshold is rising by £1000 per year but so does the National Insurance rise by 1% to 9% so they giveth with one hand and taketh with the other!


Time to get your excel spreadsheet out and crunch some numbers. It may seem a bit tedious but you do need to work out what all your costs are and when they will fall. This will also save you have too many unexpected costs when you can least afford it.

Working capital is important too, how much do you need in your business account to keep running when customers pay you late, suppliers need paying and you can't get parts on credit!

In year one you need to budget a minimum of £100/month for advertising costs, whether that be advertising in papers, newsagents, flyers etc. Getting your name out and about will take you longer, and be more costly than you expect.

Also - holidays - a luxury you'll probably have to forgo in year 1

 

[mattyevz]

Iv been self employed for about 6 months now and its tuff out there. At the moment im plodding along. Luckly i know a couple of builders. I would recommend finding some builders or make friends with other trades.

 

[lloyd1980]

I agree it is extremely tough out there at the min, - Ive been self employed since april 10, I had no customer base at all when I started, I started by dropping leaflets everywhere, then advertising in all the papers, apart from 2 weeks off for planned summer holiday last year and 2 weeks off at xmas just gone I have been in work solidly since starting , the most ive had booked in is 6 weeks in advance and the least has been 4 days in advance - my point is this, if you are determined to do it they you will make it work, even if like me you walk 20 miles in a week delivering flyers etc
If you can run a profitable business and get by when times are like they are - imagine how well youll be doing when things pick up and everyones making money again.
Ive never ran a business before so I dont have any 'good time' to compare it to. but ive ran it well enough so far and things can only get better mate
go for it !!!