Advice on self employed

[Chrisgy]

I work for a company now but I think about going self employed a lot of the time, I see the money I make on private jobs and think why am I not doing this in the week.

Could someone tell me when I buy materials for my jobs if I'm self employed do I pay VAT. And the best way to get customers in the beginning?

Also any advice on the main things to consider when starting up?

Thanks

 

[johnmcginty]

if you are starting up on your own there are many, many overheads to include. You will be looking at spending around £500 a month on ads. Yes you will pay the vat but you will sell on the parts .

earmark first year per month ( only a rough guide )

Ads £ 500
petrol £ 120
van £ 1000 one off purchse min
pub liability £500
initial spares £ 300
mot ?
van ins ? say 500
website?
all your own tools ? £400

estimated turnover first year per month £ 1600
so 1600 minus say 700 per month for first year running costs = £900 profit a month. Clearly it is different for everyone though this wasn't far off my mirst year estimate.
Profit first year maybe £10000 if you are lucky . Good luck mate .

 

[justlead1]

Hi Chrisgy Asking the vat question suggests your not yet ready to go it alone. Plumbing is the least of your worries. Get your head around how business works, is the first thing. It far to complex to get sufficient information on a site like this. Good Luck

 

[Chrisgy]

Hi Chrisgy Asking the vat question suggests your not yet ready to go it alone. Plumbing is the least of your worries. Get your head around how business works, is the first thing. It far to complex to get sufficient information on a site like this. Good Luck

The reason I ask about vat is because as you probably know all the prices in pts etc. are excluding vat and just wondered why.

 

[justlead1]

Hi. I did not wish to be rude. But you will probable be better of drawing your money tax paid and earning a bit via privates. Times aint good out there at this point of time. Water leaks are a lot easier to deal with than financial leaks and quite a few plumbers are losing money at the moment. Good Luck

 

[tamz]

if I'm self employed do I pay VAT

Of course you do. If you do enough to get registered you can claim it back but then you have to charge it on materials and labour.

eg
not registered
buy taps for £10 inc vat add £1, fit for £20. Total job cost £31 = £21 to you

registered
buy taps for £10, claim vat back =£8.51 (1.49 vat) add £1 to taps fit taps for £20 inc vat
Total job cost £31. £4.62 to pat to vat man = £17.87 to you.
To make the same money you would have to charge £34.67 but have the pleasure of knowing you are helping the economic recovery

Remember when you have a job, the jobs you do at the weekends are an extra on top of your £20K/yr or whatever.
When you go self employed those jobs become your only source of income and you will need a LOT more of them.

 

[wards]

Of course you do. If you do enough to get registered you can claim it back but then you have to charge it on materials and labour.

eg
not registered
buy taps for £10 inc vat add £1, fit for £20. Total job cost £31 = £21 to you

registered
buy taps for £10, claim vat back =£8.51 (1.49 vat) add £1 to taps fit taps for £20 inc vat
Total job cost £31. £4.62 to pat to vat man = £17.87 to you.
To make the same money you would have to charge £34.67 but have the pleasure of knowing you are helping the economic recovery

Remember when you have a job, the jobs you do at the weekends are an extra on top of your £20K/yr or whatever.
When you go self employed those jobs become your only source of income and you will need a LOT more of them.

Totaly agree with above,it is not as easy as peeps think at the moment,times are lean.

 

[Steve001]

Plumbing is the least of your worries. Get your head around how business works, is the first thing. It far to complex to get sufficient information on a site like this. Good Luck

I agree with justlead, I sometimes wish I had been a businessman before doing plumbing, been on my own for three years and I'm learning lessons the hard way, most of them cost you, work/life balance isn't the same, if your not working your thinking about it.

I could give you the hard life story, but i'm kind of happy to be in control of my destiny whether it's being skint or flat out with work. Then again if someone offered me a job, 9 - 5 mon to friday, payed hols I'd have to take it lol.

You'll know when to do it, no rush.

 

[Puddle]

Also any advice on the main things to consider when starting up?

One of the main things to consider is how you are going to compete with all those employed plumbers doing cheap private jobs at the week end

Consider how you are going to go on holiday with no holiday pay

Consider how you are going to pay all the over heads involved and still put a meal on the table

Consider how you can not plan anything for the next 5 years until you get established

Consider how when you do plan the smallest thing,you have to cancel as you have to go back to a job you did and have not been paid for yet,due to a leaking pipe,only to find the carpet fitter has put nail through pipe,the same carpet fitter who you met on the way to job and sold concert tickets to cheap as you now could not make it

Consider how if you do get any work how you are going to feel spending all those free hours doing paperwork,chasing money,cleaning old copper fittings, up and down the scrap yard seeing what hey have in,to get parts off


Consider being your own boss,with no one to answer to .....apart from the customers and contractors,bank manager,your and merchants accountants,regulatory bodies and who ever...always someone

Consider staying employed for now,were your grass is indeed probably greener and weed free...ish


imho

 

[Toddyplumb]

And if you can sort all that lot out and can do it . There is absolutely nothing better than being your own boss
I do agree with the other posts mind, it can be an absolute pain

 

[mike_s]

To be self employed you have to love what you're doing and take a lot of pride and interest in it. I wouldn't just go for it because I thought I could earn a bit more. Think about the pension too, does your company pay towards yours? Speak to a financial adviser, I pay 200 pound a month into one and I still plan on increasing it. I booked a holiday about a month ago, at the time I had jobs planned worth around 1600 quid after materials in just the next 2 weeks. Now it's 2 weeks away, gone a bit quiet and I'm scraping around for the spends. It'll be fine but you really do have to plan ahead. I don't want to work for anyone as I want to carry on my dads business, but if you've got a good job it's a lot less hassle. I had to give up my biggest hobbies for the business too. I'm not complaining but just wanted to raise awareness.

 

[dean4drains]

it has it good points and bad points, the red tape now is killing off small businesses, chasing payments, health and safety etc its a lot more than just doing the job. i cant remember the last full day of work (on the tools and not paper work) i have done.

as an example, i had a job to do for a national company a few months ago, first time i have worked for them and the last. £60 for unblocking a drain that took 20 mins, not bad ehh, plus an hour of paper work, phone calls, 3 emails and 2 faxes later job done......45 days for payment.