The Made Simple Group is home to a range of business entities dedicated to providing online business solutions to the start-up and small business communities
Christmas doesn’t just mean rubbish secret Santa gifts, hangovers and shirking off. Oh no, if you’re a designer or a copywriter, it represents a fantastic chance to do a bit of work on the side, all strictly legit of course. So skip forward to January – you’ve had a successful December with all this extra work and now you’re wondering if you can make your bit on the side a full-time thing. New year, new start.
Here are some things that you should consider before taking the plunge and handing in that resignation letter.
Can you do two things at once?
This is the ideal solution. If you can keep your full-time job and continue with the extra work as a side-project for a little longer, you will be able to see if the work holds up and if you enjoy it. Which brings us to…
Yes, an obvious one but nonetheless extremely important. It would be pretty horrific to quit your job only to find that you actually hate doing your ex-side-project on a full-time basis. If you haven’t got a passion for what you’re doing, then you will struggle.
Money, Money, Money
Another obvious consideration is, will you make enough money? This is where you need to draft some financial models and business plans. You need to be realistic. If you’re going to make more money than you would at your current job, that’s a good start. If not, how will you cope? Try and consider absolutely everything that you’ll require to run your own business.
Where are you going to operate from – your bedroom? Well maybe but will you realistically be able to work in that environment? An office will probably be required. Skip back to money.
It’s all about you
Apologies for ripping from McFly but it really is. Are you disciplined enough to get up and go to work without a boss to answer to? On the flip side, will you know when to stop? Can you deal without the guarantee of a paycheck at the end of the month? Some people simply can’t work for themselves. Can you?
What structure are you going to use?
There are various business models that you can use to move your business forward. Which one suits you?
A very popular option if setting up on your own. The majority of new businesses start this way. A simple registration with HMRC is required. The major issue with this model is that the liability is unlimited. Therefore if the business falls on hard times, the owner may have to pay out of their own pocket. It’s also possible to set up a “partnership”, a variation of the sole trader but with more than one person involved.
This adds credibility to your operation and is very easy to set up. When a company is formed with Companies House (as is required) it opens itself up to various admin tasks such as annual returns / annual accounts and fees such as corporation tax (not to mention the registration fee). The major plus of forming a limited company is that liability is limited. Shareholders are normally only accountable for the value of shares that they own.
Can be considered a combination of the “partnership” and a company limited by shares. Liability is limited. Again, registration with Companies House is now extremely simple. However, LLPs do not share the same tax advantages that a company limited by shares provides.
These summaries are just a glance at the some of the business models available in the UK. There are various tax implications involved with each one, and because of this, we recommend seeking the advice of an accountant or business advisor before selecting a model.