Wednesday 6 September 2017

Setting Up As A Sole Trader UK


If you’re a sole trader, you run your own business as an individual and are self-employed. You can keep all your business’s profits after you’ve paid tax on them. You’re personally responsible for any losses your business makes. You must also follow certain rules on running and naming your business. What counts as self employed: If you start working for yourself, you’re classed as a sole trader. This means you’re self-employed - even if you haven’t yet told HM Revenue and Customs (HMRC). You’re probably self-employed if you:
  • run your business for yourself and take responsibility for its success or failure
  • have several customers at the same time
  • can decide how, where and when you do your work
  • can hire other people at your own expense to help you or to do the work for you
  • provide the main items of equipment to do your work
  • are responsible for finishing any unsatisfactory work in your own time
  • charge an agreed fixed price for your work
  • sell goods or services to make a profit. You could be classed as a trader if you sell goods or services. If you’re trading, you’re self-employed.
  • You’re likely to be trading if you:
  • sell regularly to make a profit
  • make items to sell for profit
  • sell online, at car boot sales or through classified adverts on a regular basis
  • earn commission from selling goods for other people
  • are paid for a service you provide


You’ll need to:
You’ll need to apply for a National Insurance number if you’re moving to the UK to set up a business. You must register for VAT if your turnover is over £85,000. You can register voluntarily if it suits your business, for example if you sell to other VAT-registered businesses and want to reclaim the VAT.

Naming your business: You can trade under your own name, or you can choose another name for your business. You don’t need to register your name. If you need finance to get started: You will need to create a Business Plan, you can do it (Here) for free. It is also advisable to create a Cash Flow Forecast. You will also need to create a list of any assets you may have: You should also say that you intend to carry on working at your current employment until your Business grows, and include details of your employment in your Business Plan and Cash Flow Forecast:
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*Are You Ready To Start Your Dream Business:
Step one: Create your Business Plan and Cash Flow Forecast (if you need to obtain Finance, now is the time to apply for it) (get your Finance) Now your ready to go.
Managing your money: Every company, big or small, is always concerned about one thing – managing money. Proper financial management is crucial to surviving a volatile economy and the industry competition. Small businesses, especially, need to exercise caution with their financial decisions from the very beginning. It takes more than just a good idea to run a business. Every business needs a financial structure that generates a profit to stay credible.  Entrepreneurs need is to be equipped with good money management abilities to turn their venture into a success story.
Not all business owners, however, are adept at handling finances. But that doesn’t mean all hope is lost.
Now here are 5 tips for managing small business finances.
  1. Educate Yourself
One of the first things that you should do is educate yourself about the various aspects of finance. For starters, learn how to read financial statements (if you don’t already know how). This is one important statement that tells you all about your money – where it originated from, how many hands it changed, and where it is.
Financial statements contain 4 essential details – cash flow statement, income statement, balance sheet, and statement of shareholders’ equity. The cash flow statement analyzes operating activities, investments, and financial in/outflow. The balance sheet provides information related to the company’s assets, liabilities and shareholder’s equity. The income statement reflects the revenue earned within a specific period of time. Shareholder’s equity represents the amount by which the company is financed through common and preferred shares.
  1. Separate Personal and Business Finances
Always keep your personal and business finances separate. This entails getting a business credit card and putting all related expenses on it. This should help you track your outlays and keep you in control.
You will also do well in opening a savings account dedicated to your business, wherein you can transfer a certain amount of money from each payment that you receive and gradually build a considerable corpus. You can use this money to pay taxes.
  1. Cut Costs
It is important that entrepreneurs keep their expenses in check,without hampering customer satisfaction. This, especially, holds true for small businesses.
Every business endures 2 types of costs – fixed and variable. While fixed costs have to be borne irrespective of whether your business is making money or not, there is scope for savings in variable costs.
For example, instead of buying costly branded software, you could work with free, cloud-based, open-source software, which is equally good. Conduct free online calls, video conferences instead of travelling lost distances. You could also try bartering your services with other professionals and cut costs.
    4. Monitor and Measure Performance
It is crucial that you, as a business owner, keep tabs on the movement of your money, especially when large amounts are involved. Keep looking at your company’s financial performance in comparison to the past financial statements to project your future revenue, expenses and cash flow.
Being aware of these aspects will help you make informed decisions for your business.
5. Professional Help
Everyone needs help, especially an entrepreneur hoping to make a success oh a business. Sometimes, it pays off to engage the services of an expert, even if it is on a part-time basis. They can help you determine where your business is, where it is heading by using and analyzing your data. Make sure you hire someone you trust, though.
Whether it is tax planning for the next financial year, or payment for the current year, their expertise can go a long way in guiding you and bringing you peace of mind.
Conclusion
While owning and running your own business can be exciting, it can also be nerve-wracking, especially when it comes to handling finances in a lucrative manner. Don’t let your business suffer due to poor money management. Keep the above tips in mind and give your venture a bright future.