Starting up as a Sole Trader
So, you’re a Plumber/Plasterer/Painter & Decorator* (Insert your own trade) and you’re getting a bit fed-up working for Joe Bloggs and Sons. You’ve always had thoughts of being your own boss, well, since the day your apprenticeship finished anyway, and now you’ve decided to do it. Read on for a brief guide to starting up as a Sole Trader.
Where do you start and what do you do?
1. Recognise your obligations
As a business owner it is vital that you understand what the law asks of you. Sole traders are required to carry out a range of tasks and fulfil a range of responsibilities – particularly with regard to HMRC & Self-Assessment. Make sure that you speak to an accountant or solicitor if you are in any doubt about those responsibilities, they are the people who are knowledgeable and will guide you through the processes, and could save you a lot of stress and money in the long term.
2. Brush up on your time management skills
Effective time management is amongst the most important talents available to a sole trader. You will have numerous demands on your time, and it is important that you come up with efficient ways to get things done, or you’ll end up running around like a headless chicken and achieving nothing. I have a free ebook which will help you, and you can down load it here.
3. Recognise the need to outsource
You should acknowledge that you may not have the skills or time to do everything yourself. Even as a Sole Trader and an experienced PA with many office skills, I still recognise that there are things I need help with. In these cases outsourcing will be the answer. Many business owners find it difficult to let go of tasks, after all, your business is your baby – but if you are to get everything done, you need to learn when to pass responsibility on to others. You can then concentrate on your core business activity and leave the tasks you have little or no knowledge in to an expert. I’ve designed a specific VA package just for Sole Traders and it’s especially useful for anyone starting up as a Sole Trader.
4. To VAT or not to VAT
Even as a sole trader, you will still be obliged to register for VAT if your turnover exceeds the VAT threshold, which is currently £83,000 (2016) alternatively, some business owners choose to register voluntarily for financial reasons; You can’t claim it back if you’re not registered to pay it. If in doubt speak to your Accountant.
5. Get insured
Picture the scene; you’re working in a beautiful house and you walk your dirty work boots on a cream carpet! The home owner has steam coming out of their ears: it’s ruined and the stain won’t budge! They are adamant that they will not use their home contents insurance to get it replaced..Insurance should be a number one priority for every business owner. A good business insurance policy can help protect you, your business and possibly even losing your home against some of the many risks you will face on a daily basis. Make sure that you read your policy carefully, that you are covered for every eventuality, and that you understand any relevant exclusions.
7. Get Marketing and Selling
As a sole trader your income is dependent on your business success. It is important that you get selling as soon as you can. Try to make yourself as visible as possible, you really don’t need to spend thousands on shiny ads to do this, get a good free ad on Yell.com, be social on Social Media and get your name out there. If you need any help with this, then Virtuoso-PA can help you.
8. Invoice ASAP
It may seem strange to many that I’ve included this, but you would be surprised how many Sole Traders don’t do this. Get into the habit of invoicing as soon as the work is complete.
9. Another of the dreaded jobs
Not many of us like to do it, but to stay in business it’s got to be done. Don’t bank on customers settling their invoices promptly. Sadly, chasing payment takes up a large proportion of many self-employed people’s time. Make sure that you start to chase for payment as soon as an invoice becomes due, and at regular intervals after.
Always continue to think of ways to expand your business & get new customers. Keep an eye out for new opportunities and new business ideas which will help you to grow your business.
Starting up as a Sole Trader will be an exciting time for you. If you need any further help or advice on any of the points I’ve talked about here, please contact me for a no obligation chat. I may not be a Plumber or Plasterer but I am a Sole Trader and I know business, so I can help. If you follow these tips starting up as a Sole Trader will be the best thing you’ve ever done.