Thinking of starting my own ltd company.

[WarwickApp]

Hi guys, just after a bit of advice really. I’m still an apprentice at the moment but I’m in my third year, will qualify next may/June and I’m very domestically experienced and feel like taking the step to self employment as soon as I qualify really.

have any of you done this straight from college? How’ve you got on?

also, I live in a smallish village with about 1000 houses and as it stands there are no small electrical businesses within the village. I’m not going to quote the name of the village I live in but for arguments sake let’s say it’s called ‘London’, I was thinking of naming my business ‘London Electrical Ltd’ to draw in custom from the local area, again just wondering if any pros/cons to this?

lastly, to get my name spread, I was thinking about having some professional flyers made an delivered to the whole village, with perhaps an introductory offer on, for example; ‘20W floodlight supplied and installed for £120 for new customers’, was thinking this might be a way to A) really start the company off quite well, B) create quite a decent sized, local customer base.

the 20w floodlight and price might not be exactly what I’ve just written but that’s the idea I’ve had.

Any thoughts on this would be welcomed, be as harsh as you like lol!

cheers guys
Craig.

 

[pc1966]

There are lots of pros and cons for what type of business you enter. A Ltd company is useful for many reasons (some large organisations will only deal with them, for example), but it also imposes specific requirements on reporting accounts, etc. You should find a reliable accountant locally and discuss what you want to do longer term.

There are rules on naming and you can go on Company House to check the planned name is not already used or too similar to one in use (or recently dissolved). Typically when starting a Ltd company you pay a company that does the legal donkey work for for you, typically around the £100 region, give then a couple of preferred names, and later they come back with the legal entity in existence and already handed over to you alogn with various documents relating to it.

Getting going, and surviving, needs customers. So you will need to think of how you get out there. Once a few jobs have been done well you will probably find a lot of word-of-mouth business comes your way.

Don't get involved in a race to the bottom on pricing, it will always end badly. Also remember you need to have an income to the company that is at least 1.5 times, and more realistically 2 times, what you want as take-home pay. That is to cover the overheads of the business (insurance, accountancy fees, membership of CPS, test equipment calibration, van costs, etc) as well as the company's contribution to NI and pensions, and the time without work or doing paperwork, etc.

So as a very rough start if you aim for, say, 30k/year you need to be taking in something like 60k/year or £300/day for 200 working days in a year. Of course, aiming for £50/hour might be high for your area, or it might be dirt cheap, so reality also has to temper your aims and if you are too cheap, don't be the overworked fool in the town!

 

[M4rtyj]

Hi mate,
Will you be "fully qualified" by the end of your course with test and inspect and 18th
How much experience do you have as every day is a learning curve and what sort of work will you be looking for?
Ontop of that have you planned your outgoings, insurance, Pi, van, wages, proffessional body etc etc.
Knowing what prices you are going to charge and sticking to them in order to cover your costs whilst making profit.

As for the security light offer just be careful with price etc as people will hold you to that and sods law will land you a sh*t of a job with nowhere to feed off and a 3036 board that's hanging off a nail ?

This forum is packed full of advice it's a good start that you have asked first.
All the best

 

[Deleted account]

Nothing wrong with limited company, but nothing wrong with sole trader also.

accounts a lot simpler and cheaper for sole trader.

 

[pirate]

Indeed, nothing "wrong" with the Ltd Co. platform, but ask yourself why it might be right for you.
Good accountancy advice is paramount, but starting as a sole trader is much less complicated and less expensive. You might transition to a Ltd. Co. once your income is at a level which warrants such a move, but as @Paignton pete said, accounts are a lot simpler for a sole trader.

 

[SJD]

lastly, to get my name spread, I was thinking about having some professional flyers made an delivered to the whole village, with perhaps an introductory offer on, for example; ‘20W floodlight supplied and installed for £120 for new customers’, was thinking this might be a way to A) really start the company off quite well, B) create quite a decent sized, local customer base. the 20w floodlight and price might not be exactly what I’ve just written but that’s the idea I’ve had.

As mentioned, I'd be quite wary of an offer that can go badly wrong. I appreciate this is only an example, but an outdoor flood light can be quite simple to an absolute nightmare, depending on the existing installation, also where it would have to go. E.g. gutter level on a 3-storey town house, where your ladders don't reach - which I'd just decline to do, but might be difficult if an introductory offer.

Even a simple offer for a light fitting change can have problems. E.g. when you find the new fitting is Class I metal, no CPC in wiring, but you've already taken down the old metal one - so can't put that back either!

Plus, if you offer something at quite a good price, it can be hard later to increase prices to something more realistic.

Possibly offer a free check of something that you'd do for free anyway, like an assessment of a fuse box / consumer unit, visual survey and a few quick tests?

 

[stevethesparks]

Nothing wrong with limited company, but nothing wrong with sole trader also.

accounts a lot simpler and cheaper for sole trader.

Also bear in mind corporation tax is now due to increase from 19% to 25% I think in 2023

 

[Mike Johnson]

Sole trader route is the one to go for in the first instance, I like the outside light offer, but do qualify it with "Subject to inspection" to give yourself a get out clause, perhaps a professional looking poster in the local shop/s window, also the local PH can be a good way into some needed work either in the PH or the punters.

 

[Deleted account]

Definately do the flyer thing. It worked for me. Sent out 5000 leaflets I think about 8 years ago when I first started.
I was busy from day one and never looked back.

I still get people ( normally the oldies) phone me saying theyve just got a leaflet through the door can I pop round and fix a socket etc.... I tell them they where sent out 8 years ago.

the oldies without internet love a leaflet. They will pop it in a draw and keep it until they need it.

do not do offers or discounts. It puts people off. They think you must be desperate for work. Believe me you won’t be.

 

[WarwickApp]

Sole trader route is the one to go for in the first instance, I like the outside light offer, but do qualify it with "Subject to inspection" to give yourself a get out clause, perhaps a professional looking poster in the local shop/s window, also the local PH can be a good way into some needed work either in the PH or the punters.

Good thinking mate with the subject to inspection. Sorry what’s PH?

 

[DPG]

Good thinking mate with the subject to inspection. Sorry what’s PH?

Public house?

 

[Gavin John Hyde]

Its expensive and a lot of folks dont like it , but I swear by checkatrade for getting loads of work and repeat custom and then word of mouth referrals from the older customers.
for £13 a month extra on top the £70 PM fees you get leaflets sent to the whole city. approximately 20K properties I think last time. number of checkatrade leaflets pinned on fridges catches my eye.
Checkatrade has more than paid for itself and for less than £1k a year I get several thousand of work.

Before going ltd company I think it is probably better to go as sole trader. i had to go as a ltd company from day one as the company i was going to sub contract for didnt want sole traders. did increase my overheads by around £50 per month for accountancy fees etc.. It has worked out well though and turnover and profit are both going up. so much so I will give it several months to ensure it continues before I then take somebody else on. The corporation tax and employers NI increases costs aswell so you need a good accountant but I have found ways to minimise the costs.

 

[mattg4321]

Also bear in mind corporation tax is now due to increase from 19% to 25% I think in 2023

Only if profits above £250k a year.

You should be aware though that sole traders were supported pretty well by the government during the lockdowns. Indeed some people worked part time on purpose and actually increased their earnings with the grants. Ltd co directors on the other hand were pretty much stiffed by the government. Luckily enough work picked up again very quickly after lockdown 1 for most of us. People in other industries have lost everything due to being ltd co rather than sole traders.

 

[Gavin John Hyde]

Only if profits above £250k a year.

You should be aware though that sole traders were supported pretty well by the government during the lockdowns. Indeed some people worked part time on purpose and actually increased their earnings with the grants. Ltd co directors on the other hand were pretty much stiffed by the government. Luckily enough work picked up again very quickly after lockdown 1 for most of us. People in other industries have lost everything due to being ltd co rather than sole traders.

When CT does go up companies with profits below £50k will still pay 19% wont affect a lot of companies.

 

[OnlQQker]

with perhaps an introductory offer on, for example; ‘20W floodlight supplied and installed for £120 for new customers’,

I'll act as first customer.

If I have a 10w floodlight will that be £60.00?

cheers guys
Craig.