Where to start?

[newbie]

As I mentioned in my intro I'm planning on opening an online craft shop next month, the only problem is I know roughly what I have to do but I don't know where to start with it all. Does anyone have any advice?

I'm planning on being a sole trader (do I need to register this info with anyone other than the Revenue), and working from home (do I need local authority permission to do this?).

I have suppliers lined up but I need to open accounts with them but first I need a business bank account (I was thinking of Abbey as they offer free banking). I am planning on starting trading next month (ie. the new financial year) but I want to get on with things, could I open a business bank account now but actually say that I began trading on April 1st, or should I hold off and do everything after April 1st?

Apologies for all the questions, my heading is spinning! :oops:

Thanks in advance.

Alison

[jk]

Why do you need a business bank account?

[newbie]

Why do you need a business bank account?

Do I not need a business bank account?

I thought it would simplify things. :roll:

[coxadmin]

I use Abbey for business banking - it suits me perfectly with the free banking for life (within very generous limits). Many people like to be able to go into a branch and talk to a business advisor and that isn't available with Abbey, but as I say, it works fine for me.

To open an account with Abbey I think you have to pay in £50 from a personal bank account - once you've paid that in, it won't matter whether or not you use the account straight away.

[creacom]

You can open a business bank account as a sole trader whenever you like as far as I know. They might ask to see silly things - for example a letterhead ?! This is something you can put together yourself. Apart from that they might also ask to see your business plan. But its not complicated to open one.

I would suggest you take an appointment with the bank and explain everything and they will guide you through it.

If there is anythign else you are not sure about then just ask away....

Jacqui :D

[Joyous]

Hi Alison

As a sole trader the only registering you need to do is with the Inland Revenue within 3 months of the end of the month that you start to trade. If you’re running an on line business I can’t imagine that you’ll need to register with your local authority. Provided your business is not a nuisance to your neighbours and you don’t have delivery lorries turning up at all hours of the day and night then there should be no need.

It’s worth opening a business account as banks don’t like people running a business through a personal account. A business account will also allow you to accept payment in the name of your business as well as in your own name.

There’s no problem with you opening a bank account now even if you are not yet ready to trade. Preparing to trade is not the same as trading and it’s worth getting things lined up now so that come 1st April you’re ready to go.

Hopefully your head’s spinning a bit less now.

Regards

Joy

[newbie]

Thanks for the replies, I'm not too bothered about having a business advsior at the bank so I'm sure Abbey will be fine for me. I was just concerned that if I opened the account now then for tax purposes I would have to say I was trading immediately which I don't want to do.

I'm about half way through my business plan so that shouldn't be a problem and I've also designed some letterheads for myself too.
With regards the letterheads do I have make it clear I'm a sole trader trading as a company name? For example Newbie trading as ABC Crafts.

Sorry again for all the questions.

[Joyous]

If you’re trading in a name other than your own then yes, your headed paper will need a footnote saying “Alison Newbie trading as ABC Crafts”.

Regards

Joy

[newbie]

Thanks, you're all so helpful.

More questions though I'm afraid.

I've covered the tax aspect and will register within 3 months of beginning trading (can I just pick a date and say as of this date I am trading or is it more complicated than that?)

I won't be registering for VAT in the first place as my turnover will be below the threshold

Should I take out business insurance to cover my stock or can I extend the household insurance?

I wasn't going to contact the local council as the business will be small scale and not cause any disruption, would this cause a problem with business rates though if they found out I was operating a business from my home?

I have a million more questions but I can't think of them all now.

Thanks again for the help.

Alison

[Hedgehog Toys]

Hi,

You would be advised to open a business accouont as you can guarantee someone will pay by cheque and it will be made out to the name of your company, in this instance you could only pay it into an account of that name and it wouldn't look good going back to the customer and saying 'sorry could you write me another cheque please'....

I opened an account with LloydsTSB and all they wanted was a brief business plan, letterhead and proof of ID.
It's also easier to separate business from personal finance if you have a seperate account.

In terms of your suppliers, you will usually find that first orders are on a pro-forma basis, that is , you pay for the first order before you receive it. After this most companies will open a 30day account for you (this is also handy if you have a business account as it shows you are serious).

Working from home only becomes a problem if you dedicate a certain percentage of your home specifically to the business. Local authorities vary greatly on this aspect. If you have large delivery lorries to your home then you need to make sure firstly that they are not frequent and secondly that they can actually deliver to your home easily. It's no good if you live in a cul-de-sac and a 38 tonne articulated lorry pulls up !!!

Check if you need to revise your house insurance aswell, especially if you plan on having an quantity of adhesives etc in storage.

Hope this helps :D :D :D

[newbie]

Thanks. ;)

I think I'm OK regarding deliveres, everything should just come via a courier and they usually have transit style vans so that shouldn't be a problem.

I'm not sure how I'm going to work it yet (I'm moving into a new house), but I don't envisage the business taking up too much room (maybe just a small corner of the living room), so hopefully that will be OK too.

I need to check when I take out the new house insurance that they are OK will the business stuff, hopefully they'll just be able to incorporate it into the existing policy. I won't be stocking any paint/adhesive/flammable products so again hopefully it shouldn't be too much of a problem.

Question for the Abbey customers ...
Are you assigned to a particular branch? And does it have any bearing on anything? I currently live in Herts but I'm moving to Lancs so I don't want to end up with a Herts branch if I can only do certain things within my (as it were) branch. Apologies if this sounds stupid but I bank with First Direct so everything is done centrally.

[coxadmin]

I'm an Abbey customer and a First Direct customer - they operate very similarly so you should be fine. I post cheques in pre-paid envelopes to Abbey and cash can be paid in at any Abbey ATM.

[Hedgehog Toys]

If you are just using a part of a room in your house then there is no problem with business issues. You will only end up paying business rates etc if you take over a whole room etc...or garage for that matter.
One way of storing stock by the way is renting one of these lock up storage rooms from a storage company. I will be renting one in the future to store excess stock, that way i can't get stung for business tax and it keeps my insurance company off my back :wink:

[WakingDragon]

I started my first business in a spare room and I would advise you to at least try to separate business from normal life to that degree - otherwise you will never be out of site of your office!

Your home insurance should be checked to ensure it will cover your stock. Most insurance companies do not mind at low level cost but you need to check.

What you should consider is public liability insurance in case something you sell injures a customer. On that note, I would recommend joinging the Federation of Small Business. They offer discounted insurance, free legal advice and access to free business banking (through the Co-Op I think so nicely ethical if that is your bag). Membership costs 100 quid per year but you might be saving that on insurance alone.

Technically you should declare yourself for business rates with the council, but nobody does and it is extremely rarely a problem unless you are operating industrial machinery at the premises.

Good luck.