New Soft Play company

[SWSP]

Hi everyone,

I'm in the process of starting a new business and Ive been reading loads of the useful info info on this site. I want to make sure I'm going around things the right way and have a couple of specific questions if anyone can offer their opinion/advice.

About the business: To start with I will be hiring out Soft Play equipment, a bouncy castle and some other toys for childrens birthday parties, weddings and other events. As I am also self empoyed with another business, this will be mainly at the weekends and my husband will sometimes be helping to deliver and setup etc (unpaid). I will be using his van and have arranged for business insurance for this.

At some point in the future I will also be running soft play sessions during the week at local halls where parents will bring their children and pay a fee to use the equipment (children will be supervised by their parents).

I have already purchased most of the equipment (at a cot of approx 4k)which was funded by me/my husband and I'm expecting the turnover to be about 4-6k in the first year.

I want to ensure that I am adequately covered to have quotes for PL Insurance. I will also be asking customers to sign a disclaimer when hiring the equipment and will be completitng risk assessments for the equipment, although I'm not sure if I need to complete a risk assesment for every hire as I've had conflicting advice on this. Any thoughts?

I'm also undecided if I should be setting up as a LDT company or trading as a sole trader. Obviously the sole trader option is easier and cheaper when filing accounts but I'm not sure if the PL insurance offers suffiicient protection as there are so many conditions attached. As the turnover will be quite low the additional admin costs of a LDT company would be difficult to afford but it would reduce my personal liability. I am also not sure which option would be best to allow take my initial investment back easily.

If anyone could offer some advice it would be greatly appreciated.

Thanks
Lorraine

 

[GraemeL]

Hello Lorraine,

Your point about the restricted personal liability by going down the Ltd route is a good one, personally I would go Ltd but I really think you really need professional advice on several points:-

1. Sole Trader or Ltd
2. Insurance issues (Product liability, public liability and employee liability)
3. Use of any labour other than yourself. (This is a worry for me - pretend that an accident happens because of something your unpaid labour does - what then?)

You will also need to consider CRB checks for yourself and any others involved, including parents who assist. This can be a pain.

I use an Insurance Broker who are UKBF members (Lockyer) and they have been great with sorting things out for me, but an good broker should be able to give you a lot of the answers you need.

G

 

[Idontknow]

I will be using his van and have arranged for business insurance for this.

Hi, just to make you aware, if your husband has insurance on his van for whatever reason you cannot set up another policy under your name/or his, this is illegal, The registered keeper and the main driver needs to insure it then they tell the insurance company of you as a named driver and new business use, if you did set up two policies, had an accident and the insurance company found out they would cancel both policies and obviously you would no longer be covered

 

[SWSP]

Hello Lorraine,

Your point about the restricted personal liability by going down the Ltd route is a good one, personally I would go Ltd but I really think you really need professional advice on several points:-

1. Sole Trader or Ltd
2. Insurance issues (Product liability, public liability and employee liability)
3. Use of any labour other than yourself. (This is a worry for me - pretend that an accident happens because of something your unpaid labour does - what then?)

You will also need to consider CRB checks for yourself and any others involved, including parents who assist. This can be a pain.

I use an Insurance Broker who are UKBF members (Lockyer) and they have been great with sorting things out for me, but an good broker should be able to give you a lot of the answers you need.

G

Thanks for you reply.

Other than myself the only person that will be helping is my husband. As I understand it I will need Employers Liability insurance even though he will be unpaid in case of an accident etc. When I said that parents would be supervising the children I meant that they would be responsible for supervising their own kids, like at a play group or soft play centre. The children will not be left in my care at any time.

We are both CRB checked as I deal with children in my other job.

I agree that I need professional advice. I have booked a meeting with a business advisor at my bank on Thursday so hopefully that will help to steer me in the right direction.

 

[SWSP]

Hi, just to make you aware, if your husband has insurance on his van for whatever reason you cannot set up another policy under your name/or his, this is illegal, The registered keeper and the main driver needs to insure it then they tell the insurance company of you as a named driver and new business use, if you did set up two policies, had an accident and the insurance company found out they would cancel both policies and obviously you would no longer be covered

Thanks for the reply. The van is owned by and registered to my husband and the insurance policy is in his name with me as a named driver and business use included for both of us.

 

[Billmccallum]

Hi everyone,

I'm in the process of starting a new business and Ive been reading loads of the useful info info on this site. I want to make sure I'm going around things the right way and have a couple of specific questions if anyone can offer their opinion/advice.

About the business: To start with I will be hiring out Soft Play equipment, a bouncy castle and some other toys for childrens birthday parties, weddings and other events. As I am also self empoyed with another business, this will be mainly at the weekends and my husband will sometimes be helping to deliver and setup etc (unpaid). I will be using his van and have arranged for business insurance for this.

At some point in the future I will also be running soft play sessions during the week at local halls where parents will bring their children and pay a fee to use the equipment (children will be supervised by their parents).

I have already purchased most of the equipment (at a cot of approx 4k)which was funded by me/my husband and I'm expecting the turnover to be about 4-6k in the first year.

I want to ensure that I am adequately covered to have quotes for PL Insurance. I will also be asking customers to sign a disclaimer when hiring the equipment and will be completitng risk assessments for the equipment, although I'm not sure if I need to complete a risk assesment for every hire as I've had conflicting advice on this. Any thoughts?

I'm also undecided if I should be setting up as a LDT company or trading as a sole trader. Obviously the sole trader option is easier and cheaper when filing accounts but I'm not sure if the PL insurance offers suffiicient protection as there are so many conditions attached. As the turnover will be quite low the additional admin costs of a LDT company would be difficult to afford but it would reduce my personal liability. I am also not sure which option would be best to allow take my initial investment back easily.

If anyone could offer some advice it would be greatly appreciated.

Thanks
Lorraine

Is this going to be your own business or a partnership with your husband?

If he is part funding it and working for free, it sounds like a partnership rather than a sole trader.

I always worry when people see friends and family as free labour, this is really false economy, the actual cost of delivering your service is artificially low as you don't have to pay him a wage.

 

[SWSP]

Is this going to be your own business or a partnership with your husband?

If he is part funding it and working for free, it sounds like a partnership rather than a sole trader.

I always worry when people see friends and family as free labour, this is really false economy, the actual cost of delivering your service is artificially low as you don't have to pay him a wage.

Its definately my business. The main reason for my husband helping is that one of the items I will be hiring is heavy and I will need help lifting it. Once I have started holding the soft play sessions he will be even less involved as the hire part of the company will be secodary. Does it make a difference if some of the money came from him (or his Credit card) as we are married so finacially connected anyway?

 

[Paul_Rosser]

Your husband can have a Directors Loan Account so anything he spent on goods/stock for the business prior to incorporation will result in this being in credit and can be paid back once the company has some funds.

https://www.gov.uk/directors-loans

 

[Socio South West]

I have booked a meeting with a business advisor at my bank on Thursday so hopefully that will help to steer me in the right direction.

My experience of Bank business advisors made me do what I do now - Be prepared to be offered all sorts of superfluous products that the Bank are pushing - pensions, Critical accident cover etc: Nothing relevant or useful to the practical side of getting the business off the ground. Just as long as the faceless suits in the City will get their money out to you at minimum risk...

You mention Sole Trader or Company: The pros and cons of both are well documented, and you have to make your own judgement on which works best for you.
There are many more statutory requirements with a company - not particularly onerous, but there nevertheless: A sole trade has a far easier life in terms of red tape, but the trade off is that you remain personally responsible for any debts (Although in the case of a small company the Bank will probably have you tied by a Director's Guarentee in any case if you borrow from them)

 

[WFChris]

Hi, just to make you aware, if your husband has insurance on his van for whatever reason you cannot set up another policy under your name/or his, this is illegal, The registered keeper and the main driver needs to insure it then they tell the insurance company of you as a named driver and new business use, if you did set up two policies, had an accident and the insurance company found out they would cancel both policies and obviously you would no longer be covered

This is completely wrong.

However, it would be fraud if you tried to claim under both policies.

 

[SWSP]

My experience of Bank business advisors made me do what I do now - Be prepared to be offered all sorts of superfluous products that the Bank are pushing - pensions, Critical accident cover etc: Nothing relevant or useful to the practical side of getting the business off the ground. Just as long as the faceless suits in the City will get their money out to you at minimum risk...

You mention Sole Trader or Company: The pros and cons of both are well documented, and you have to make your own judgement on which works best for you.
There are many more statutory requirements with a company - not particularly onerous, but there nevertheless: A sole trade has a far easier life in terms of red tape, but the trade off is that you remain personally responsible for any debts (Although in the case of a small company the Bank will probably have you tied by a Director's Guarentee in any case if you borrow from them)

Thanks for the advice. I am sure that being a sole trader would work best for me, at least in the short term but its just the liability aspect that has me concerned.

I wont be borrowing any money other than ther personal debt I have aready incurred so its not that side of the liabilty that concerns me but the risk of someone getting injured. I will have Product Liability and Public Liability insurance so should be covered but I'm still concerned.

 

[Idontknow]

This is completely wrong.

However, it would be fraud if you tried to claim under both policies.

OK If you say so, so your telling me its legal to have 2 policies on one vehicle?

Where are you getting your information?????

 

[lockyer]

With regard to the vans that would create a dual insurance issue, and a possible overlap in liabilities creating a claims nightmare.

With regards to public/products for bouncy castles and soft play we can cover those quite easily

 

[SWSP]

With regard to the vans that would create a dual insurance issue, and a possible overlap in liabilities creating a claims nightmare.

With regards to public/products for bouncy castles and soft play we can cover those quite easily

]

I want to make sure that I am 100% covered for any injury to someone using the equipment. How comprehensive is the Public/product liability insurance you can offer?

Thanks

 

[lockyer]

No public liability covers you for ANY accident, but they all cover you for accidents caused through your negligence. I.e

If you installed the castle wrong and someone got injured, yes that would be covered. But if you have written instructions it was for adult use (like a lot do) and an adult went on drunk and got injured you wouldn't be liable,therefore the insurance wouldn't cover it.

 

[SWSP]

No public liability covers you for ANY accident, but they all cover you for accidents caused through your negligence. I.e

If you installed the castle wrong and someone got injured, yes that would be covered. But if you have written instructions it was for adult use (like a lot do) and an adult went on drunk and got injured you wouldn't be liable,therefore the insurance wouldn't cover it.

An example of the type of situation I'm concerned about would be... The insurance policy has conditions that state I need to fully comply with BS EN 14960, the PIPA safety guide, and the manufacturers instructions (all very in depth). A customer hires the bouncy castle and I set it up and try to follow all of the above guides but accidentally miss something like anchorage weight, distance from a fence or incorrect paperwork. A child gets injured and the insurance company refuse to pay out as I didnt fully comply with the conditions.

 

[lockyer]

In that situation you would be liable, therefore covered by the insurance.

What you need to bear in mind is that if there is no negligence no one is to blame, it's just bad luck and therefor the injured party just has to take it on the chin.

Hence the phrase "where they'res blame, there's a claim"

 

[SWSP]

In that situation you would be liable, therefore covered by the insurance.

What you need to bear in mind is that if there is no negligence no one is to blame, it's just bad luck and therefor the injured party just has to take it on the chin.

Hence the phrase "where they'res blame, there's a claim"

OK thanks. So am I correct in thinking that if a PL insurance policy has a clause stating that the policy is invalid if I don't follow the correct safety guidelines / instructions then its not worth the paper its written on as it doesn't cover my liability? Or have I misunderstood something?

 

[lockyer]

If a policy has warranties or endorsements on it you need to comply with them for cover to be in force.

The only way to know what these warranties are is to get a quote for your particular circumstances.

I'm more than happy to get one of our guys to do a quote for you, without obligation, so you have a better understanding of the things you will have to do.

To be fair I haven't seen any as strict as the ones you are describing, and I think you might be pleasantly surprised at how lenient the policy wordings are.

 

[SWSP]

If a policy has warranties or endorsements on it you need to comply with them for cover to be in force.

The only way to know what these warranties are is to get a quote for your particular circumstances.

I'm more than happy to get one of our guys to do a quote for you, without obligation, so you have a better understanding of the things you will have to do.

To be fair I haven't seen any as strict as the ones you are describing, and I think you might be pleasantly surprised at how lenient the policy wordings are.

Thanks. I have submitted my details on your website for a qoute. I already have quotes from FML and Leisureinsure so it will be interesting to compare the conditions.

 

[internetspaceships]

I have already purchased most of the equipment (at a cot of approx 4k)which was funded by me/my husband and I'm expecting the turnover to be about 4-6k in the first year.


Thanks
Lorraine

Hi Lorraine

I really respect you for setting up in business and doing everything properly and admire your get up and go here but I have to ask one question.

You're paying out at least 4k to get back possibly only 4k in year one, less your costs, time and effort.

What's your thinking here because I might be old and daft but I'm not getting it?

 

[SWSP]

Hi Lorraine

I really respect you for setting up in business and doing everything properly and admire your get up and go here but I have to ask one question.

You're paying out at least 4k to get back possibly only 4k in year one, less your costs, time and effort.

What's your thinking here because I might be old and daft but I'm not getting it?

Good question. There are a few reasons why I think this is worthwhile for me.

Firstly the 4-6k figure is very conservative and if it really takes off, just the weekend party hire part of the business could generate up to 10-15k per year (based on 1 loan per weekend day) without the need for purchasing any additional loan equipment (other than replacing anything that gets damaged).

Also, if the turnover for the weekend hire part of the business is at the lower end it will at least have paid for the equipment that I can use for the weekday play sessions which I have estimated will bring in an additional £4-500 per month (for 1 day per week).

Although I can only do this on a part time basis at present, in 3 years my youngest child will be going to school and I will then be looking at increasing the amount of weekday sessions. I wanted to get things up and running as soon as possible so that hopefully by then I will have built up a good customer base and have established a good name in the local area for the play sessions which will make it easier for me to increase the number of sessions per week. If the business doesn't take off like I am hoping at least I will know it is not viable and will have time to explore other avenues.

 

[internetspaceships]

Thanks, I must admit I was scratching my head a bit! Thanks for letting me know, I understand now.