Just do it: How to start your own business
26th July, 2011
A practical guide to setting up your own business, for (nearly) free
My dad is an oil and gas consultant. He travels all over the world building power stations, and signing off oil rigs and managing nuclear projects. He told me the other day that if he didn’t get paid, he would do what he does for free. But back when I was growing up, when he was a lowly mechanical engineer I remember one day when I was about 7, my mum’s worried face when my dad came home from work one day and told my mum he’d told his boss where to go. His boss had been asking dad to cut corners, which would have compromised health and safety on a project. Dad was resolute and confident that he was setting up his own business, but mum was petrified, mainly about how we were all going to eat. The years have proven dad right, but I learned an important lesson that day, never let financial fear get in your way of following your dream.
Perhaps it’s no surprise that some 20 years later, having told my boss where to go, I now run my own business, which has just started its 2nd year. I’d like to give you the benefit of my humble experience, of how I started up my business for practically free.
I fully believe that if you’re really, really good at something, passionate enough about it and are prepared to work hard, you can create a successful business. Moreover, that you shouldn’t have to shell out a load of money to do so.
There are various company structures available to you, but when starting out I’d recommend forming either a sole trader or limited company. This is mainly because it’s the least complicated. Being a sole trader is easy, you just phone up HMRC, say ‘I’d like to be a sole trader please’ and they set up your national insurance contributions, and you pay them tax.
Forming a limited company gives you credibility when trading with the public or corporate world. Again, register with HMRC for PAYE and you’re away! You can set up a limited company for as little as £20, I did this with a company called Companies Made Simple (www.companiesmadesimple.com). They checked my chosen name, it was available, then registered it with Companies House for me and sent me my shiny Documents of Incorporation. For my 20 quid I also got a free meeting with an accountant, a business address in London and access to various business planning resources and seminars.
Do not pay for business banking! Many high street banks give it free for at least 18 months (after which time there’s nothing to stop you swapping to another bank). I’d recommend shopping around for the best added value services, such as financial advisers, accountancy software etc.
I’d recommend shopping around for an accountant too. Gone are the days of dusty sales ledgers, accountants now offer anything from business strategy consultancy to free mugs. Developing a good relationship with an accountant who understands your business needs and marketplace can be invaluable. Most reputable places will offer a free consultation and will be happy to advise you. Quotes I got for accountancy services ranged from £100 per month to £1500 for the end of year accounts. However, I have a simple business model and I am perfectly competent at maintaining a spreadsheet and issuing invoices, so during my first year of trading, I took the free advice about the best way to manage the accounts for my business, thanked them for their time and did it myself!
You need to look professional. You need to put thought into what your company stands for and how you’ll appeal to customers, as well as differentiate yourself from the competition. But you don’t need to pay a graphic designer hundreds or thousands of pounds to do this. I paid nothing for my company logo. Instead I negotiated an exchange of professional services with a graphic designer friend who did the whole thing for me – logo, business cards, letter head, leaflets, then gave me the templates and intellectual property so I could order materials as and when I need them. If you have no suitable contacts, I’d recommend contacting your local college and asking whether there are any students looking for work experience.
f you just want a brochure site go to 123-reg.co.uk, where you can get a 3 page site for free. You don’t need to know any code, you just fill in templates. Of course, you’ll probably want to upgrade as soon as the business is profitable, but the point is you have a web presence, you’re taking action and it’s not costing you anything!
In these troubled financial times (so they say), few people are willing to take the risks associated with going it alone. However, I’d argue that the rewards are far greater than the risks – financial freedom, being your own boss, being in control of your destiny, creating a legacy… You need a lot of passion, some skill in your niche and a hell of a lot of hard work. However it doesn’t need to be complicated, you don’t need to employ lots of people and you certainly don’t need huge amounts of capital to set up a business. With a bit of gumption, you can do it for practically free.
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