ok so wouldnt be for a couple of years yet but me and a friend have been throwing ideas around for starting our own business after we finish uni.

so was just wondering apart from hard-work what kind of things are involved to get started...?

we have the idea for the buisness & one of us has a qualification which would enable us to start up in the particular area we looking at.

it is just an idea at the min but really interested to see what is involved?

I'm sure others will throw in more info.

Off the top of my head:

1) Partnership or Limited. First one means your personal assets are liable if the business goes under, limited means only the money you have invested is lost. However the latter does tend to involve more red tape.

2) Funding. Intending to plough your own dosh in or you require some business loan?

3) Good business model. Understand your product, know the market. Complete waste of time if you don't grasp the basics.

4) Worth finding a friend who's an accountant or solicitor

Some further advice can be found here.

thanks for the start will look at the rest of it when i'm not at work.

really excited now we have been talking bout this.

I intend to go freelance/subcontract from the 1st April 2007 - a big step, having been employed for nearly 13 years

I have my reasons though, and relish the challenge - even turned down a partnership as well :spin:

I agree with the 4 point that Si has made, especially 3 and 4 are important if you are on a low cost, low risk set-up.

what exactly does a business model mean? i have been looking into the market - using uni resources and other websites.

need to check with my friends lol dont think they are doing accountancy or solictor :chin:

If you follow the link I provided above and go into "considering starting up?" read these two sections:

Research and Develop
Business Plan

I could post up endless extracts of CIMA text but to be honest that website does a much better job of explaining it in non management accounting talk.

ok thanks, didnt get chance to read it today been busy sorting bits out.

thanks for your help

No worries. Don't get detered by all the business language and start believing that it's an impossible dream to achieve.

Starting up is fairly straight forward but you just need to ensure the foundations are set well before hand

I'm sort of in same boat. Need to setup a limited company for tax purposes (What's that Mr Brown? You want how much this week? )but not sure where to get advice.

Why didn't I keep in with the kids at school who were destined to become accountants?

Remember, If you want to keep money in the company, it MAY be classed as a non-business asset if not part of working capital, and if you want to take it out, then you either pay a dividend [no further tax to pay if a basic rate taxpayer BUT no corporate tax relief] OR pay yourself under PAYE.

Catch me on MSN if you want a chat.

Si said:

Starting up is fairly straight forward but you just need to ensure the foundations are set well before hand

Click to expand...

I wanted to start something up a few years ago and the only thing that really stopped me was the startup capital (which will depend on what you're doing). Good luck with whatever you're getting into, be motivated, and make sure you plan ahead (and have a plan b)

Dragons den

Government is/was giving £1000 to start up a business.
Tip;- Swap your business account around every 1year or so to get free banking. Banking charges can really mount up if you have a lot of cash and cheques going through your account.
Get yourself an accountant. He/she will more then save you money to cover their fees.
Easy way to keep accounts is to use a Simplex D Account Book available from good stationers. Also get receipt books as well.
Make sure you get a receipt for everything you buy. Makes your accountant and the taxman happy.
And good luck in your future.

Andy.

sumplug said:

Get yourself an accountant. He/she will more then save you money to cover their fees.

Click to expand...

oddly enough that is often true, plus it saves a lot of time reading stuff

I don't intend to get an accountant

jug said:

oddly enough that is often true, plus it saves a lot of time reading stuff

Click to expand...

My accountant is an ex chief tax officer and chartered accountant. He has saved me a huge amount in tax over the years, and very easily pays his own bill.
I would not be without him. Yes i could fill my online tax forms in, but he knows of little ways to claim tax reforms And usually with an accountant on board, the tax office will not invite you in to go over your books!! This last bit happened to a friend of mine who did his own accounts. They found lots of discrepances, and he was presented with a tax demand [i wont say the amount but it was not small!! ] . But its horses for courses, and depends entirely on the business.

Andy.

Accountants know there stuff (I should know as im a training to be one).

1. Limited Companys

Can be set up here for very little. However when filling company accounts a lot of disclosure is required so an accountant is required. Profits (before dividends) will be taxed at 19%. Withdrawing money is simple: take a 5035 pound salary to use up the "freepay" element of the PAYE and withdraw the rest as dividends which is taxed at 10% for the lower and basic bands and 30% for the higher - a lot better than 40% with salaries. Liabilities are with the company.

2. Sole trader/partnerships

Simple but risks and liabilities rest with the trader NOT the company. Tax is the calculated as takings minus allowable expenses (can be debated) and paid on the 31st Jan of the following year. Cannot comment on this to much as i work mainly on limited companies.

3 VAT

If the turnover of the company is over 61,000 and is VATable then registration is a legal requirement. Isnt all bad as VAT Charged on expenses can be reclaimed.

What business is it you are thinking of entering into?

Shout up if you have any questions and i will try to answer em myslef, or will ask a work. (And by the way i wnt charge you at 23.00 an hour. lol)

Cheers

Ginner

ginner said:

1. Limited Companys

Can be set up here for very little. However when filling company accounts a lot of disclosure is required so an accountant is required. Profits (before dividends) will be taxed at 19%. Withdrawing money is simple: take a 5035 pound salary to use up the "freepay" element of the PAYE and withdraw the rest as dividends which is taxed at 10% for the lower and basic bands and 30% for the higher - a lot better than 40% with salaries. Liabilities are with the company.

2. Sole trader/partnerships

Simple but risks and liabilities rest with the trader NOT the company. Tax is the calculated as takings minus allowable expenses (can be debated) and paid on the 31st Jan of the following year. Cannot comment on this to much as i work mainly on limited companies.

3 VAT

If the turnover of the company is over 61,000 and is VATable then registration is a legal requirement. Isnt all bad as VAT Charged on expenses can be reclaimed.

Click to expand...

1. As a basic rate tax-payer, you pay NO more tax on any dividend income - it may be taxed at 10%, but this is covered by the underlying tax-credit.
Higher rate tax payers have an underlying rate of 32.5% BUT in reality they only pay an additional 22.5% i.e. a quarter of the NET dividend actually received

ALSO, there is a major flaw doing this - taking minimal salary and the rest as dividends; and that being if you ever want to borrow money, a mortgage for example. UNLESS you can prove the dividends are regular and recurring, any lending will be based on salary - £5035 is not a good starting point

2. Any tax due under self-assessment is due 31st January AND 31st July subject to de minimus amounts OR collection under coding notices.

3. If you need to register for VAT, the flat-rate scheme is also an option, based purely on sales. You can only claim back on capital goods costing more than £2k.

Si said:

No worries. Don't get detered by all the business language and start believing that it's an impossible dream to achieve.

Click to expand...

Probably wont put me off too much once ive finished my degree, doing business studies but the finance bit is scary lol, think my mums cousin is an accountant so may have a chat with him at a later date.

As for the type of business, think its probably classed more as a service as we wont physically be producing anything.

Start-up costs long way before we get to that point still bouncing ideas around and the pros & cons plus i have around 18 months left @ uni so trying to get the big picture iykwim