advice needed for new biz

[plumber guy]

I want to start working for myself in my trade as a plumber and am unsure as what form my biz should take (ltd or sole trader) there is only myself doing this no partners ect any help out there it feels like my brain could melt any time now.

[Chris Butler]

Go find a local accountant and talk to them. They will advise you of the best course of action. Anything I might say (or probably anyone else) will only be anecdotal or personal experience. What you do and why will largely be about tax.

C

[PeterCarruthers]

Isn't it amazing how so many of us get lost on this question - and lose sight of the biggest challenge your business will face: Finding clients?

Sole proprietor is great. Few formalities, and the tax issues seem to be a little more flexible than those of a company. But, and it is a huge but, you are personally responsible if something goes wrong in the business. Mess up, and your life savings, your home, and pretty much anything else you own gets lost in the wash.

Limited company is also great. Although the tax issues are a little more complex initially, the company has a distinct persona - different from you - and it carries the financial risks. If something goes dramatically wrong financially you can close the box and walk away. (That's an oversimplification, but it will do for now.)

Which means that there is no ONE way. Small business life is all about making decisions when you don't have enough information to make a perfect decision. When you're starting out you win either way:

• Either the decision is right, and you save some money but don't learn a great deal, or
• the decision is not as right as you would like and you lose a little money (school fees) while you learn a lot.

Bottom line: Make a decision and then start focusing on how you're going to find clients, because without them you won't be doing much plumbing!

I hope my South African style doesn't come across as too brash? After 16 years of advising small business owners I tend to try and get to the point as directly as I can. And, of course, anything here is merely my opinion. (Hopefully a reasonable experienced one.)

And good luck with your plan to join the gainfully unemployed.

[bubblewrap]

Which brings to the question of liability, as a trade, plumbing, if something goes wrong, any plumber should have their business and themselves insured whatever their business status is. Financially wrong? Not sure how much active assets would be involved except for transportation (maybe a company vehicle?).

I'd say "limited" is nice when multiple parties are involved (multiple directors with a secretary) and there's a personal investment brought into the business without possibly a business loan of some sort. Although these days, most financial institutions will go for asking for personal liability on one or all of the directors of the business as insurance that the loan will be repaid (whether by scheduled repayments or repossessions of your house )

Hope that helps,

Elie aka bubblewrap

Originally Posted by PeterCarruthers

Isn't it amazing how so many of us get lost on this question - and lose sight of the biggest challenge your business will face: Finding clients?

Sole proprietor is great. Few formalities, and the tax issues seem to be a little more flexible than those of a company. But, and it is a huge but, you are personally responsible if something goes wrong in the business. Mess up, and your life savings, your home, and pretty much anything else you own gets lost in the wash.

Limited company is also great. Although the tax issues are a little more complex initially, the company has a distinct persona - different from you - and it carries the financial risks. If something goes dramatically wrong financially you can close the box and walk away. (That's an oversimplification, but it will do for now.)

Which means that there is no ONE way. Small business life is all about making decisions when you don't have enough information to make a perfect decision. When you're starting out you win either way:

• Either the decision is right, and you save some money but don't learn a great deal, or
• the decision is not as right as you would like and you lose a little money (school fees) while you learn a lot.

Bottom line: Make a decision and then start focusing on how you're going to find clients, because without them you won't be doing much plumbing!

I hope my South African style doesn't come across as too brash? After 16 years of advising small business owners I tend to try and get to the point as directly as I can. And, of course, anything here is merely my opinion. (Hopefully a reasonable experienced one.)

And good luck with your plan to join the gainfully unemployed.