How do I get set up as a sole trader and what sort of costs are involved?

Question

I am interested in preparing myself to act as a sole trader - I have something in planning which will raise some capital, but then I want to become quite literally a trader - buying/selling/arranging inland transport and import/export of goods, buy cheap sell higher with an emphasis on quality of goods and a high level of service - nothing too complicated. I have access to a storage facility+ a contact who has agreed in principle to assist in the running of operations. I am not quite ready to start this yet and wonder if there is a way of "setting the scene" so that I can hit the ground running.
Advice heard previously was to ask questions of those who have been involved in similar operations for at least five years where possible. I am and always have been a grafter, have done 96 hour weeks before now so I'm not scared by multiple commitments. The floor is open, I am in the early planning stages and don't think I could borrow from the bank for this sort of thing - any loopholes?

Answer 1

Get registered as self employed with the tax office. Go see a business startup specialist in a Bank. One of the best banks out there from personal experience were Barclays they have a team of business specialists they can provide loads of info including Starting and running your own business guides on CD Rom and information fact sheets, there are other sources of information you can obtain through Business Link too.

Banks usually lend on a matched funding basis to new businesses, ie 50/50 but only if you can provide a cashflow projection and business plan up front. If you have already bought equipment to use for your business and can produce receipts this would be included in your 50%

You sound like a hardworker, working for yourself is not always easy and does demand your time and effort, from what you have said you have no objections to doing this. The benefit obviously being that any money you make (less any deductions) is your own clear profit not someone elses.

Anyhow, best of luck!

Answer 2

I have no personal experience but setting up as a sole trader is the easiest way of starting a business - but also the riskiest! If the sh*t hits the fan you and your family could be in big trouble. At all costs try to avoid using any equity in your house as collateral for the business - if the business goes down the pan, you could loose your house.

If you need capital to start and can't get a bank loan this will be a big obstacle. To get a bank loan, you need a professional business plan. It is also sensible to get yourself an accountant. The other possible loophole is the commitment of the 'contact who has agreed in principle to assist in the running of operations'. You need to think what would happen to the business if either you or anyone else involved were off sick for a long period.

Having said a lot of possibly negative things, I wish you luck in your new venture!

Answer 3

Becoming a sole trader doesnt cost you a penny and is very easy. I went to see my bank and set up a business bank account and a savings account in my company name with myself as a sole trader. I also let tax office know when it came to do my annual tax return, but apart from that and an hour at the bank thats it. Hope this helps

Answer 4

Just to say, make sure you register immedietly with inland revenue. If you haven't done it 3 months into your self employment, your looking at anything upto a £1000 fine.

Self Employed is the way to go. It's not easy, but the benefits and satisfaction will never be met by a normal 9-5 job.

Answer 5

get in touch with the inland revenue to register as self employed. you can do that anytime and you get the oppurtunity to declare your own tax and to pay less NI than would normally be taken as an employee...as for your idea you gonna have to get used to paperwork if youre gonna be importin for sale. unless you smugglin stuff in which case....its your neck on the line....
certain produce has restrictions on who can import and other stuff can be subject to import taxes...
again this only applies if you legal..

try it small time now... get used to the paperwork and procedure before you dive straight in at deep end....it will also give you an indication of your possible customer base which after a while if its all looking promising will go down onto your documented business plan to speak with the man at the bank ...
good luck

Answer 6

It's a lot of work but there's free help and advice available from the government - www.dti.gov.uk and also from your local Chamber of Commerce. A great website for information on business is www.spideybiz.co.uk - good luck.

Answer 7

To set up as a sole trader first get yourself a business name.....

Then get a business bank account........

Then get yourself registered with the tax office.......

Simple as that......

Oh and don't forget to do some bookkeeping.......Recording income and expenses of the business

But most importantly smiLe and enjoy it !

And good luck

Answer 8

i choose for to propose you communicate to an accountant, there are tax reward for working as a limited criminal accountability company and your criminal accountability is in general limited to the form of shares interior the corporate. i've got self belief which you nevertheless choose for with the inland sales, even in the experience that your working as a sole dealer.