Going self employed

[wendy j]

My daughter has been accepted by the Essex Guild of Craftsmen for her beadwork, and is now thinking of going self employed so that she can do craft fairs.  Together we have been beading as a hobby for a few years and have built up a stash of beads,  and Im getting better at my lampworking so she can use my glass as well.  Can anyone give us some advise please?
Thanks
Wendy in Essex

[sparrow]

Hmmm....I'll have a ramble, see if you can find anything useful!

Going from employment to self-employment can be a huge adjustment, it can be incredibly hard, but it can also be the best decision ever made. Remember, she doesn't have to be *only* self-employed, you can be employed and registered self-employed at the same time (and should be, if you're selling your stuff). It's hard doing both, but not impossible, and makes it possible to build up a reputation and customer base without having to make money immediately to pay the mortgage.

It really depends on personality and circumstances. If she has no dependents or mortgage to pay, going self-employed (full-time) will allow her to go at it full tilt, do every fair within reach and beyond, etc. I she's more of a 'playing it safe' kinda girl, she could always use her annual leave to have the time to build up stock, do fairs and meet people/contacts - it's hard, because you take time off work to - errr...work (and the flexibility of this obviously depends on the job), but it takes the edge off having to be successful immediately (which, depending on your personality, can be a good thing or a bad thing).

Not sure any of these ramblings make sense, not even sure it was the type of answer you were after....  Whatever she decides, good luck to her!

[Redhotsal]

It's not a big issue. Easiest way is to become a sole trader which makes accounting a lot simpler. I'm not the best for advice for would recommend you employ a local accountant to do the books for you at the end of the year, and just be scrupulous in your book keeping.

[Kaz]

Yes, agree and expect to make a loss in the early days!

[wendy j]

Hi all,  I forgot to add that she would still be employed as a TA in the school so would still have the safety of that, and she has no dependants or mortgage to pay so I guess shes really lucky there,  to be able to work up slowly,
Wendy in Essex

[sparrow]

That sounds a great position to be in Yup, simply registering is dead easy, a phone call is all it takes. I think the Chamber of Commerce runs courses on book-keeping, they might be helpful

[jammie]

My ramblings for what they are worth. I agree with whats been said, above. It can be very difficult to keep going sometimes and jewellery making in particular has really taken off. Our local craft asssociation has decided to not take any more jewelllery makers as they just had so many people contacting them. At one Edinburgh craft fair there was about 80% jewellery makers and it wasn't that big a fair. We barely made enough to cover costs and that was at Christmas. Our local fair on the other hand was more balanced and we did really well. We sell in a local shop too which has been very good but percentage take from them is high.It has been very difficult for us at times but we felt we had come so far we had to give it a try, it coincided with  the banks going down the pan, but we had been working towards it for a few years so didn't feel we could give up. At the same time iits been one of the best years we have had work wise for a very long time having been unemployed due to various health issues. The business gateway has been very good for us, we had an excellent business advisor and I believe it would have been way more difficult without her. There is some help with  tax credits   for people who are self employed too, can get complicated and can take a couple of months to sort out.   My OHs a  webdesigner and I dont think for me that the jewellery side would be enough to keep us going without him working too.  

[nemeton]

Have some random thoughts from me too   I'm self employed (as a 'sole trader') and have been for years - not all of the work I do has to do with beads though (about half my income is earned by sub-editing science textbooks).
There is lots of help and advice available these days for small business startups - talk to the bank, HMRC, your local business network if you have one, Business Link, and so on - pick up all the information available, so she can decide what strategy might work best for her.
I'd recommend either employing an accountant or going on a short bookkeeping course - my accountant costs me an arm and a leg and several other bits every year but he is worth his weight in gold (or at any rate beads) just in terms of the time he saves me (maths not being my strong point) let alone the actual tax he saves me!
Craft and Design magazine is a good resource for finding out about top-end craft fairs and has loads of good advice about all sorts of selling-related topics - I found it very helpful. Go to lots of craft fairs as a punter and chat to the stallholders so you find out about the different organizers and get a feel for exactly what is involved... some stallholders won't tell you anything, but many of them will be open and helpful if you tell them you're starting out on the same route  
Keep your expectations realistic - jewellery is the most saturated category in the craft market and there is a LOT of competition. As far as the bead side of my business is concerned, it took me three years of relentless self-promotion before I so much as broke even, never mind making an actual profit. The most important thing I've learned is to be flexible - I started out thinking I was going to sell jewellery at craft fairs but the market had other ideas and now I seem to be mostly selling tutorials online    Also that I spend way more time doing 'business' activities (promotion, networking, packaging, filing...) than actually making beadwork!
Best of luck. I wouldn't go back to 9-5 for any money. I'm never going to make a fortune doing what I do, but I make enough and I have a lot of fun doing it, and that is priceless!  

[elburnzo]

I'm just sticking my tuppence in here!
I'm not self employed (although would love to have the time to be!) But as an accountancy trainee the best bit of advice on the book keeping front is to keep everything! Always get a receipt and always keep them/record them. Doesnt have to be anything fancy just a spreadsheet or notebook with everything you have spent and what you bought. You can get cashbooks fairly cheaply from WHSmith. Just right down the date you paid it, what you paid and what it was. Saves a lot of time and money at the end of the year as the accountant doesnt have to charge you for the time they spent wading through receipts, which believe me can be a lot. We have a lot of client who just bring in bags full of recipts, in no order and I cringe at the cost of organising it when they could have saved a lot of money. For example I'm a trainee in a small- medium firm and for me to organise your receipts would cost £33 an hour, if you have a lot then thts probably 2 hrs at least organising and recording them, tht will cost a lot more than the hour a week to write them in a £10 cashbook.
Another really gd thing to do is to number each item in the cashbook and write the number on the corresponding receipt, stick the receipt in a folder in number order. Saves everyone some time finding them, also helps you if you end up having a dispute with a supplier over an item.

Going on a bookkeeping course is always a gd idea, especially if you are going to be VAT registered as VAT can be a confusing area. But dont be overwhelmed by the bookkeeping side, as long as you keep on top of it, maybe set aside an hour or two a week, it'll be a breeze!

[mjbelkin]

The best advice I can give for bookkeeping/accounts is to keep it simple.

Have a nice simple spreadsheet with one page for expenses, one for income.

You can claim plenty of small things that are well worth doing since they will conveniently add up to keep your tax bill down. If your daughter is working then her personal allowance will already be used there, and all her profit will be taxable.

Things to remember to claim;

• meals/snacks when you're out and about, but only buy for yourself, otherwise its entertaining and not tax deductable
• all mileage to venues/beadfairs/anything to do with the business at 40p per mile for the first 10,000 in a tax year and 25p per mile for all subsequent miles
• £2 per week "use of home as office". You can easily claim more, but you are guaranteed not to get any quibbles on that, so you may as well claim it

For now I wouldn't worry about VAT - the threshold is £70,000, so unless you're going to make sales of that in a 12 month period anytime soon I wouldn't bother just now. Better you get yourself used to keeping clear records. Spreadsheets will probably be the easiest if you decide to get an accountant because they can copy and paste from them, and there's no worrying about adding things up.

If you decide to get an accountant, make sure they are registered with ICAEW or ACCA, or a proper accounting body. Not ICPA. Unfortunately the term "accountant" isn't a protected one, so anyone can claim they are one without the qualifications. A good one will help you reduce your tax bill legally, but they can't always do it after you've spent the money. And be wary of taking tax advice from anyone who works for HMR&C - they don't necessarily know of the best ways to keep your tax down since that isn't the angle from which they will have been trained.

If you have any questions, feel free to pm me. I'm an accountant (ACCA) who's worked in practice for the last 10 years, with a lot of experience dealing with small companies.

[Vicki]

• £2 per week "use of home as office". You can easily claim more, but you are guaranteed not to get any quibbles on that, so you may as well claim it

darn it, I wish I knew that this time last week, I just sent my tax return off 

Being self employed works out quite well for me, my husband has the main job, I would find it hard working for an employer because of my youngest son & the school hols so it's ideal to just shuffle off into the shed when I can, it's not a big deal, just don't get behind with your paper work & it's a doddle 

[paintboxcrafts]

I have been self-employed as a sole trader for about 12 years.
I do my accounts on my computer, for beginners there is a great program called Quickbooks.
You can download and use their basic version for free.
http://quickbooks.intuit.co.uk/small-business-accounting/quickbooks-free-starter.jsp
Good luck with your new venture!

[Gubbins]

She needs to register as self-employed here:
http://www.hmrc.gov.uk/selfemployed/iwtregister-as-self-employed.htm

And she'll need insurance. I started out joining here:

http://www.a-n.co.uk/
(because as a member you get insurance - it's basic but very cheap and will cover you if she's selling beads in the UK)


I would suggest you talk to a couple of accountants in your area and find one that works for you even if your expecting only a few sales.

They dont cost much and will save you so much more than they cost. The initial chat is free and if you explain your circumstances  - if they are any good they'll start making suggestions for your business staright away.

This is especially true if you have another job or a complicated income.

For instance, all the beads, tools books you have already (even if you bought them years ago ) can be offset as a start up cost. This lump sum start up cost is applied in your first year of trading so you'll probably make a loss but that means that your tax bill on her other income as a TA will reduce or disappear totally. Any extra in the loss carries over to next year so you'll reduce that tax bill too.

My acccountant also gave us loads of marketing advice, general start-up advice and even referred business our way.

Good luck!
Julie

[Billie]

I've set this topic as a sticky for the time being as there's some great advice in this thread   

[turnedlight]

Just looking at this thread, I had a look at the insurance policy Julie, it doesn't seem to say that it covers things you sell, more things you display in public, but I'm hoping I read it wrong?