- Original Poster
- #1
I am a sole trader who is VAT registered, although I have never earned anywhere near the threshold, as the customer base (education) was also VAT registered, so it made sense when reselling goods.
Originally being a technician, I have always done everything including the main technician (only technician most the time), marketer and salesperson, quotes and purchaser for item sales (which bring in hardly any profit whatsoever but are required as part of the service offered), and accounts and finances, resulting on me working most evenings and weekends too. Like now I am just finishing off the past three months VAT input, which takes some time.
For the 12 years I have been doing this, the company has never made a loss, but it has also never earned as much as it should have, where I would work less and earn more working for another company, with the extra time involved in running the business, but would probably have been less enjoyable overall.
A few years back after a short illness put me out of action for a few days, I decided to try and expand, taking all I had learnt and making a go of it to become big. Having not taken someone on before this was a big learning curve and also made me realize how good I was and the shortage of good affordable technicians. It also made me realize I was undercharging considerably and had been for some time.
This year I decided to take the customer rates to the lowest industry normal (I am still being told this is less than what I should be charging), which for this reason and a few others, also resulted in me loosing half my regular clients and just 12 hours (2 and a half days) work each week now.
Being a niche sector, with high competition from larger companies, many schools becoming part of academy groups and going in-house and the other schools not having enough funding and cutting back on IT services, I am now left with just 5 regular clients, a handful of irregular clients and a handful of business customers who are not giving me enough paid work, where I seem to be spending more time researching solutions for the unique problems, than time spent implementing them which are often quick short fixes.
I joined a business networking group, which has bought me a few bits of work from other companies there, but I am spending more on this than it is bringing in and they also have a lock out, with someone else in the group already offering web design which means I would probably have to leave anyway, and have already had a go at me for mentioning I also do web design, which has put me off too.
It has got to the point where I am now not earning enough to pay bills, let alone invest anything to bring in more minimal work and have also lost my desire to gain more work in schools mainly due to their lack of loyalty. Last year my net income was less than £12,000 despite having more regular customers and work. I have cut back on just about everything including food now (some items from Lidl do taste better though!).
I have decided to keep the client base I have for the moment (although if one more regular customer leaves this will be impossible), while I seek a business and career change to web design, web development and SEO which I have always had an interest in, have also been learning in my spare time (more recently as I have had more spare time) and have set out to do this full time in 6 months from January 2020, but have made a start on the many things to do. I am also hoping this job will give me some more flexibility (some more time off when needed), and eventually a lower workload, increased income so I can start eating food again and more job satisfaction than I am experiencing at the moment.
Although I do the accounts, I also have an accountant who does the VAT submissions and yearly tax and I pay £72 every three months for the VAT and £612 each year for the tax. This is quite a large amount, as I am spending a lot of time on this myself and think they just input a form and submit it to HMRC based on the figures I give them.
I am using software called Solar Accounts as it is fairly easy to use, and can also generate quotes and invoices to customers. It seems to struggle to get fuel tax right though, as there is a difference on it to normal VAT and TAX claiming so I am led to believe. All I know is after inputting everything in this and giving it to my accountant, the figures they give me to pay for VAT and Tax are always different (worse for me) than what I have calculated in this software.
I was recently talking to a solicitor (on a different subject to this) who mentioned a online accounting system that can submit VAT and Tax automatically, but I do not recall the name - I may ask him again but think he wants work in return, and being a solicitor their rates are not cheap. He also said I should become limited, as this rules me out of any liabilities. I do not come from an accounting background and have only learned bits as I have gone along so do not really know in plain English what other benefits or disadvantages of becoming limited over sole trader are, or it can work in my benefit.
I am also not sure with the new web business if my clients are going to be VAT registered and if it would be beneficial remaining VAT registered when I move fully over to web development, as well as whether to remain a sole trader or become limited.
I do have some funds to help me get through the start, with some personal items I can sell and being able to live on a minimal income. I know this type of business can be started with a minimal outlay before starting to bring in clients and starting to bring in income, finding the right niche and types of client to target and a gap in this massive profitable market, so am not too worried about finances, but would like to get everything else as right as possible, first time.
Finally I would also like to have a partner of some kind for this exciting venture. I have realized that many other companies in this field work with other people, rather than on their own. It would be good to talk with someone else about ideas, rather than have to decide them all on my own and have someone else to help share the workload with - there is much to do and I do not want to stretch myself too thinly like I have done in the past, doing too many things. The problem is finding someone and where to look, as many people are already working with someone else or just want to be a paid employee and be told what to do.
Originally being a technician, I have always done everything including the main technician (only technician most the time), marketer and salesperson, quotes and purchaser for item sales (which bring in hardly any profit whatsoever but are required as part of the service offered), and accounts and finances, resulting on me working most evenings and weekends too. Like now I am just finishing off the past three months VAT input, which takes some time.
For the 12 years I have been doing this, the company has never made a loss, but it has also never earned as much as it should have, where I would work less and earn more working for another company, with the extra time involved in running the business, but would probably have been less enjoyable overall.
A few years back after a short illness put me out of action for a few days, I decided to try and expand, taking all I had learnt and making a go of it to become big. Having not taken someone on before this was a big learning curve and also made me realize how good I was and the shortage of good affordable technicians. It also made me realize I was undercharging considerably and had been for some time.
This year I decided to take the customer rates to the lowest industry normal (I am still being told this is less than what I should be charging), which for this reason and a few others, also resulted in me loosing half my regular clients and just 12 hours (2 and a half days) work each week now.
Being a niche sector, with high competition from larger companies, many schools becoming part of academy groups and going in-house and the other schools not having enough funding and cutting back on IT services, I am now left with just 5 regular clients, a handful of irregular clients and a handful of business customers who are not giving me enough paid work, where I seem to be spending more time researching solutions for the unique problems, than time spent implementing them which are often quick short fixes.
I joined a business networking group, which has bought me a few bits of work from other companies there, but I am spending more on this than it is bringing in and they also have a lock out, with someone else in the group already offering web design which means I would probably have to leave anyway, and have already had a go at me for mentioning I also do web design, which has put me off too.
It has got to the point where I am now not earning enough to pay bills, let alone invest anything to bring in more minimal work and have also lost my desire to gain more work in schools mainly due to their lack of loyalty. Last year my net income was less than £12,000 despite having more regular customers and work. I have cut back on just about everything including food now (some items from Lidl do taste better though!).
I have decided to keep the client base I have for the moment (although if one more regular customer leaves this will be impossible), while I seek a business and career change to web design, web development and SEO which I have always had an interest in, have also been learning in my spare time (more recently as I have had more spare time) and have set out to do this full time in 6 months from January 2020, but have made a start on the many things to do. I am also hoping this job will give me some more flexibility (some more time off when needed), and eventually a lower workload, increased income so I can start eating food again and more job satisfaction than I am experiencing at the moment.
Although I do the accounts, I also have an accountant who does the VAT submissions and yearly tax and I pay £72 every three months for the VAT and £612 each year for the tax. This is quite a large amount, as I am spending a lot of time on this myself and think they just input a form and submit it to HMRC based on the figures I give them.
I am using software called Solar Accounts as it is fairly easy to use, and can also generate quotes and invoices to customers. It seems to struggle to get fuel tax right though, as there is a difference on it to normal VAT and TAX claiming so I am led to believe. All I know is after inputting everything in this and giving it to my accountant, the figures they give me to pay for VAT and Tax are always different (worse for me) than what I have calculated in this software.
I was recently talking to a solicitor (on a different subject to this) who mentioned a online accounting system that can submit VAT and Tax automatically, but I do not recall the name - I may ask him again but think he wants work in return, and being a solicitor their rates are not cheap. He also said I should become limited, as this rules me out of any liabilities. I do not come from an accounting background and have only learned bits as I have gone along so do not really know in plain English what other benefits or disadvantages of becoming limited over sole trader are, or it can work in my benefit.
I am also not sure with the new web business if my clients are going to be VAT registered and if it would be beneficial remaining VAT registered when I move fully over to web development, as well as whether to remain a sole trader or become limited.
I do have some funds to help me get through the start, with some personal items I can sell and being able to live on a minimal income. I know this type of business can be started with a minimal outlay before starting to bring in clients and starting to bring in income, finding the right niche and types of client to target and a gap in this massive profitable market, so am not too worried about finances, but would like to get everything else as right as possible, first time.
Finally I would also like to have a partner of some kind for this exciting venture. I have realized that many other companies in this field work with other people, rather than on their own. It would be good to talk with someone else about ideas, rather than have to decide them all on my own and have someone else to help share the workload with - there is much to do and I do not want to stretch myself too thinly like I have done in the past, doing too many things. The problem is finding someone and where to look, as many people are already working with someone else or just want to be a paid employee and be told what to do.
