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  • business advice

    O.k without going in to too much detail me and a mate have been looking at setting up our own business, now i have been told over the years about business grants and funding etc but appear to be hitting a dead end in terms of actualy finding things out

    so does anyone know anything about it, been there done that etc

    Any links, or suggestions will be hugely appreciated and listened to openly.

    Kind regards

    Whitey

  • #2
    check this:

    http://www.vxronline.co.uk/forum/showthread.php?t=49536
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    • #3
      cheers brano

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      • #4
        That other thread's an interesting read. I have been a partner in a business for the past 18 years. We have never gone Ltd, and Gordon Brown's attractive proposition to go Limited, (a couple of years ago) turned into a honey trap, so I'm glad we didn't then, either.
        You really should speak to an accountant about this, but I'll give you my thoughts anyway.

        Using Ltd as a shield against losing personal assets is rubbish. From a work point of view, get yourself some good liability insurance, and that will stop any customers from trying to take you to the cleaners over something that you did, or didn't do. Any large capital investment on a new venture will require personal guarantees from company directors, so your home etc is still on the line. This is before you go into the additional paperwork that needs filing yearly with Companies House etc.

        On the VAT side of things, this can be attractive as a 15% kick back on large startup costs, but when you realise that you will have to pay the tax man 15% of all your profits, before you think of paying your personal tax, it really isn't worth it unless you move above the tax threshold, where you will have to do it.
        As an example, if you're looking at £20k investment and running costs the first year and you earn £10k from the business you will be £1500 better off. When in the second year you only spend £10k on running costs, but earn £30k, you will be out of pocket to the tune of £3k. Don't rely on funding. This is rarely free money. It will either have strings attached, or be very difficult to obtain.

        Next, the business opportunity. IMHO, starting a business in a recession is good. If you can make it pay now, then your business model will fly when the economy picks up. It's also good to get your name out there now (the best businesses are based on repeat business and recommendations). You want your company to be the first that people think of, when they finally get a bit of spare cash to spend.

        Funding is the next that I would look at. It will take a year to know if the business will work, and you should not expect to make a nett profit in this time. By the end of 6 months though, you should be close to break-even. My rule of thumb is to have 6 months expenses before you start. Any gross profit from that 6 month period should fund the next 3 months, and the profits from those 3 should fund the last 3 months of the year. After this, you can start to repay your initial 6 month investment and still have enough in the company to run it.

        Finally, know when to call it a day. If it isn't paying you enough to service your personal liabilities, then look at scaling the operation down, and also get a paid job in order for you to live. There's no point in borrowing against your house, on the basis that the business might pick up later. This is the quickest way to let a business ruin your life.

        Good luck.
        Last edited by ARAF; 29 September 2009, 01:56 PM.

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        • #5
          Originally posted by YTVXR View Post
          O.k without going in to too much detail me and a mate have been looking at setting up our own business, now i have been told over the years about business grants and funding etc but appear to be hitting a dead end in terms of actualy finding things out

          so does anyone know anything about it, been there done that etc

          Any links, or suggestions will be hugely appreciated and listened to openly.

          Kind regards

          Whitey
          Grants:- I suggest you contact your local "Business Link" or whatever they call it in your area. Funding is still possible I believe, but if you live in an affluent area you will have no chance as most of the grants are for startups etc in deprived areas.

          Your status:- Going Ltd or in a partnership depends hugely on what you are going to be going and what sort of turnover we are talking about - best work out 1st what you are going to do and then speak to a highstreet accountant for the best current advice.

          VAT:- With regards VAT, which I dont understand why,but for some people seems a complete mystery and nighmare, but if you are going to do business with other businesses this is a MUST even if your initial turnover is going to be no where near the basic VAT threshold of £ 5x,000 p/annum or whatever it is nowadays, as most businesses will only want to deal with VAT registered business mainly due to been able to claw back the VAT on their purchase invoices - the higher the amount involved the more applicable this is, especially now with adhering to strict "money laundering" regulations and dealing in cash only is becoming is no go area.

          If however you are going to be doing business with joe public, dont even consider going VAT registered as it obviously increases your pricing and could make you not as competitive as smaller operations etc etc.

          Without knowing any more it hard to give more constructive advice
          Last edited by R15VXR; 29 September 2009, 03:01 PM. Reason: typo
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          • #6
            Originally posted by R15VXR View Post
            Grants:- I suggest you contact your local "Business Link" or whatever they call it in your area. Funding is still possible I believe, but if you live in an affluent area you will have no chance as most of the grants are for startups etc in deprived areas.

            Your status:- Going Ltd or in a partnership depends hugely on what you are going to be going and what sort of turnover we are talking about - best work out 1st what you are going to do and then speak to a highstreet accountant for the best current advice.

            VAT:- With regards VAT, which I dont understand why,but for some people seems a complete mystery and nighmare, but if you are going to do business with other businesses this is a MUST even if your initial turnover is going to be no where near the basic VAT threshold of £ 5x,000 p/annum or whatever it is nowadays, as most businesses will only want to deal with VAT registered business mainly due to been able to claw back the VAT on their purchase invoices - the higher the amount involved the more applicable this is, especially now with adhering to strict "money laundering" regulations and dealing in cash only is becoming is no go area.

            If however you are going to be doing business with joe public, dont even consider going VAT registered as it obviously increases your pricing and could make you not as competitive as smaller operations etc etc.

            Without knowing any more it hard to give more constructive advice

            I agree with what is said above. You get different grants for different businesses. Speak to a local accountant on that matter as they have insider knowledge of grants within your area.

            VAT plays a factor depending on what type of business you are. If your customer base is made up of small general public customers and your turnover does not exceed £65,000 (give or take a few £k) you would not have to registered. However if you are dealing with larger organisations and turnover exceeds the threshold then you need to register. Registering for VAT make your business seem more formal and trustworthy, which will make more larger firms want to trade with you.

            Registering with the Companies house has its pro's and con's. Depends on what business you want to start up. Ok a company has limited liability but as a supplier I see this as you can take a lot of risk and loose nothing personally if the company goes bust. Which makes the suppliers think twice oppose to dealing with a sole trader or partnership.

            Speak to a local accountant in your area as they can help you a lot with starting up your business.

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