: To those considering self-employment...


VelSatisfied
5th October 2009, 09:57 AM
Hi all.

In these uncertain economic times, many of you will either be in the situation where your job is at risk, or worse still - the axe has already fallen.

I was in a similar situation in 2005 after being made redundant, and just thought as its approaching the 4th anniversary of starting my business, that I could perhaps share some of my experiences.



Identify a target market - is it sustainable and can it be developed further? You need to know that what your business provides will in turn, provide you with a year-round income.
Keep the fixed overheads as low as possible - variable costs are fine (they increase as the business activity does), but a fixed cost can be a millstone during the early days/seasonally quiet periods.
Venture Capital - how the business is funded during start-up is crucial, use savings (your own, plus family assistance if possible), rather than borrowing from High Street sources - the rate of interest will be less, plus again, you won't be working just to payback a loan.
How to source what you need - go online and also ask your friends/family for favours. I got my website constructed & designed for 2 cases of lager!
Sole Trader/Partnership/Limited Company (which to choose) - they each have strengths & weaknesses, sole trader & partnerships can do their own tax returns (good or bad thing depending on your POV), Limited Company must use an accountant - but a Limited Company gives you the assurance that your house is not on the line in the event of failure, plus it can give the assurance to your customer that your business is bigger than it is.
Is being self-employed 'right' for you - flexibility in terms of operating hours, long working weeks, no holiday or sick pay - its not for all. Plus its a big step into the unknown as its usually lean times in the early days - family support is vital.
Can you carve a niche - you don't want to be the same as your competitors, you want to be better. I focus on my costs, so I can undercut all my rivals (yet still make a profit), but add service, which costs nothing, but gives the customer the all-important 'feelgood factor'.
Advertising on the cheap - you need to get the message out there, so customers know you exist. Radio & Newspaper is too expensive, and in my experience, doesn't provide a lasting impact. If you use a vehicle - put eye-catching graphics on it & park it in a high-visibility spot. Put fliers under wipers/hand them out in the street, advertise in these quarterly booklets which get dropped through the door. You can spend a fortune doing this if you take the 'shotgun' approach, so take your time, and stick within your budget. The most important point is to ask every person who contacts your business, just how they heard about you - that's how you'll know what works.
Planning your launch - don't just view this from your perspective, think about how the company's image is perceived by your prospective customers - I have a freephone number which re-directs to my mobile which is also listed seperately. This entices those who don't want to pay for the call, when scouring the directories, plus it adds to the business' legitimacy, and doesn't place a geographic 'fence post' around me - which is very useful if you want to work outside your immediate territory. My mobile is included to placate those who have a fear of contacting call centres...
Trade or Retail - I have no garages/dealerships that I work for. This suits me fine, as although I will miss out on a high volume of business throughout the year, I can dictate/plan my own working week, plus I don't have to wait 30 days to receive payment (cashflow is king). My own customers also act as advertisers for my business - telling family/neighbours/work colleagues, etc.
Know where your business is, without over-analysing - for the first year, your trade will be pretty much feast or famine - you probably won't know how busy you will be from one day to the next - only worry about this if competitors are doing well, when you're not. Once you have a year's history, start looking at the current year's performance year on year - that will give a true indicator how you are performing, and will also allow you to predict, and plan for peaks & troughs. It should go without saying, that you try to incur your fixed costs during your busy spells, and budget your spending as each month being quiet, whatever extra you earn is then a windfall. (Don't count your chickens until they're hatched, in other words).

Hopefully this long-winded posting has been on some help, if I can elaborate further, or if you have any specific questions, please don't hesitate to fire away, and I'll do what I can to help.

Best of luck,

Paul

Tiggerz_SRi
5th October 2009, 10:07 AM
Nice one Paul! Good advice!

VelSatisfied
5th October 2009, 10:09 AM
Thanks mate, I don't claim to know all the answers, but 2 heads are better than 1.

Paul

Tiggerz_SRi
5th October 2009, 10:11 AM
You could also inspire someone who had thought about it before :)

VelSatisfied
5th October 2009, 10:22 AM
I'm sure there are plenty who have considered it - but its not for everyone - if I can help someone avoid making an error, or conversely help someone develop a great idea, then this thread will more than have served its purpose.

Paul

djmbristol
5th October 2009, 10:32 AM
Hi all.

In these uncertain economic times, many of you will either be in the situation where your job is at risk, or worse still - the axe has already fallen.

I was in a similar situation in 2005 after being made redundant, and just thought as its approaching the 4th anniversary of starting my business, that I could perhaps share some of my experiences.



Identify a target market - is it sustainable and can it be developed further? You need to know that what your business provides will in turn, provide you with a year-round income.
Keep the fixed overheads as low as possible - variable costs are fine (they increase as the business activity does), but a fixed cost can be a millstone during the early days/seasonally quiet periods.
Venture Capital - how the business is funded during start-up is crucial, use savings (your own, plus family assistance if possible), rather than borrowing from High Street sources - the rate of interest will be less, plus again, you won't be working just to payback a loan.
How to source what you need - go online and also ask your friends/family for favours. I got my website constructed & designed for 2 cases of lager!
Sole Trader/Partnership/Limited Company (which to choose) - they each have strengths & weaknesses, sole trader & partnerships can do their own tax returns (good or bad thing depending on your POV), Limited Company must use an accountant - but a Limited Company gives you the assurance that your house is not on the line in the event of failure, plus it can give the assurance to your customer that your business is bigger than it is.
Is being self-employed 'right' for you - flexibility in terms of operating hours, long working weeks, no holiday or sick pay - its not for all. Plus its a big step into the unknown as its usually lean times in the early days - family support is vital.
Can you carve a niche - you don't want to be the same as your competitors, you want to be better. I focus on my costs, so I can undercut all my rivals (yet still make a profit), but add service, which costs nothing, but gives the customer the all-important 'feelgood factor'.
Advertising on the cheap - you need to get the message out there, so customers know you exist. Radio & Newspaper is too expensive, and in my experience, doesn't provide a lasting impact. If you use a vehicle - put eye-catching graphics on it & park it in a high-visibility spot. Put fliers under wipers/hand them out in the street, advertise in these quarterly booklets which get dropped through the door. You can spend a fortune doing this if you take the 'shotgun' approach, so take your time, and stick within your budget. The most important point is to ask every person who contacts your business, just how they heard about you - that's how you'll know what works.
Planning your launch - don't just view this from your perspective, think about how the company's image is perceived by your prospective customers - I have a freephone number which re-directs to my mobile which is also listed seperately. This entices those who don't want to pay for the call, when scouring the directories, plus it adds to the business' legitimacy, and doesn't place a geographic 'fence post' around me - which is very useful if you want to work outside your immediate territory. My mobile is included to placate those who have a fear of contacting call centres...
Trade or Retail - I have no garages/dealerships that I work for. This suits me fine, as although I will miss out on a high volume of business throughout the year, I can dictate/plan my own working week, plus I don't have to wait 30 days to receive payment (cashflow is king). My own customers also act as advertisers for my business - telling family/neighbours/work colleagues, etc.
Know where your business is, without over-analysing - for the first year, your trade will be pretty much feast or famine - you probably won't know how busy you will be from one day to the next - only worry about this if competitors are doing well, when you're not. Once you have a year's history, start looking at the current year's performance year on year - that will give a true indicator how you are performing, and will also allow you to predict, and plan for peaks & troughs. It should go without saying, that you try to incur your fixed costs during your busy spells, and budget your spending as each month being quiet, whatever extra you earn is then a windfall. (Don't count your chickens until they're hatched, in other words).

Hopefully this long-winded posting has been on some help, if I can elaborate further, or if you have any specific questions, please don't hesitate to fire away, and I'll do what I can to help.

Best of luck,

Paul

hi paul thanx for the advice, im doing a business course now for the next 6 months ive been out of work for a while now and cant seem to get a ''job'' but im not wanting just a ''job'' i want something more so thanx for your help

Daren

Devils Laguna
5th October 2009, 10:49 AM
good solid advice Paul.

It can be tough getting started (I'm two and a half years in now) but, if you get it right it is so much more rewarding than working for someone else.

VelSatisfied
5th October 2009, 10:54 AM
good solid advice Paul.

It can be tough getting started (I'm two and a half years in now) but, if you get it right it is so much more rewarding than working for someone else.

Oh yes, couldn't agree more. What worries me though is that quite often people are given a false impression of how difficult it is during the early days.

I do enjoy it very much, and its satisfying to see trade grow from nothing.

Best of luck to you Daren, have you had thoughts regarding what type of business you want to move into?

Paul

scatz
5th October 2009, 01:23 PM
Thanks for taking the time out to offer the advice Paul, hopefully it'll help someone thinkming of going down that route :)

I've often thought about working for myself but have never really come across an idea of what I could do that isn't already being done, probably best to skill up before taking the plunge ;)

Mrs Scatz was self employed as a childminder for a while and it was me that got stuck with the 'books' so I know what that entails :rolleyes:

Infact, thinking about it, I was self employed for a small while myself....window cleaning :forehead: Was hoping to end up doing it full time but what with work and family commitments I couldn't carry it on, started to get my name about an' all :rolleyes:

VelSatisfied
5th October 2009, 03:53 PM
The idea/concept itself doesn't have to be unique, just the way your business provides the product or service.

Some people watch Dragon's Den, and think that's what they have to do.:d

I was fortunate to be the first SMART operator in my area, but others have since moved in.

It doesn't worry me at all - let them have the main dealer national accounts with the urgency/thankless task that entails, coupled with the low margins & 30-day invoicing period.

Its a David vs Goliath scenario, and once again - the SMART money is on David!

I have the benefit of being able to source the best quality consumables at the lowest price possible, offer the customer a price which undercuts the opposition, yet still affords me a good enough profit that gives me a full-time wage from up to 3 days work per week (the rest of the week is spent with the kids & quoting).

Customer service is where many competitors fall down - not returning calls or even turning up when they have agreed.:confused:

One day, I hope to have established a business profile which will allow me to market the business as a franchise opportunity in other areas - so act small, think big.

Never say never - just jump in with your eyes wide open.

Paul

scatz
5th October 2009, 04:11 PM
I get that Paul and wouldn't necessarily go for something unique, although if the opportunity presented itself ;) I assume you have some background in what you do? It's like I said, I'd defo. need to skill up on something before I could even consider taking the plunge again!

VelSatisfied
5th October 2009, 04:17 PM
My background was just being a car enthusiast who had restored a car before - no bodyshop background, but a patient nature with an eye for detail help enormously.

It wasn't cheap to learn, but was worth every penny.

This of course limits the number of competitors I face (all of whom are franchises).

Again, another cost structure advantage for me.

Paul

SuperGizmo
2nd September 2011, 07:59 AM
Hi VelSatisfied, thank you for the information.

I'm struggling in getting money out of my clients.

I've developed their product, its on an area where they can test and update their product. But they've not updated it to the point it can be taken live.

This has gone on for at least 4 months now and i'm running Very low on my finances and just want to get my money back that's owed.

Do you have any advice? I've tried contacting them all and just nothing is working. its always *we'll try it tomorrow*

Thanks,

Daniel.

VelSatisfied
2nd September 2011, 10:58 AM
Hi there Daniel.

The first port of call is to revisit your contract regarding payment terms. If the contract is silent in this (and that would've been a big mistake), then there is no set time limit, and the law would only decide on what is 'reasonable' regarding the time period, if in fact the court would be inclined to look at it at all.

I just read this before heading on holiday - so won't be near a computer for a few weeks - please don't think I'll be ignoring any further replies.

I hope you get this resolved.

Paul

SuperGizmo
2nd September 2011, 11:02 AM
Hi there Daniel.

The first port of call is to revisit your contract regarding payment terms. If the contract is silent in this (and that would've been a big mistake), then there is no set time limit, and the law would only decide on what is 'reasonable' regarding the time period, if in fact the court would be inclined to look at it at all.

I just read this before heading on holiday - so won't be near a computer for a few weeks - please don't think I'll be ignoring any further replies.

I hope you get this resolved.

Paul

Hi Paul, Firstly you lucky sod! hope you have a lovely holiday.

Secondly there was no contract. a huge mistake by my part i think.

Do you know of anywhere where i can get pre-made contracts from?

Hope all is well and you have a lovely break.

Dan.