We are the change

Diary of a start-up: baby steps

It’s been four weeks since I walked out of the office building in the centre of Leeds that had been my workplace for the previous eight years. I was a senior communications officer for a government agency and had spent my time in various regional and national roles for the organisation, ranging from managing the media to embedding our approach to community engagement.

As you can see, I’m not really qualified to impart pearls of wisdom about successfully running a business, but I can share with you my start-up journey – warts and all – so you can avoid some of the mistakes I make and repeat some of the successes (fingers crossed!).

Cards on the table, I’m not totally new to working for myself. I’ve spent the last six years combining my part-time employment with some freelance work. But I have been very lazy about getting clients and only ever did work that came to me. I never actively went out to win work.

My story

With my eldest child approaching school age and my youngest not far off going to nursery school I started to think about the work possibilities this allowed me. I had happily slowed down my career in order to work part-time and spend two days a week with my children, but I was starting to feel like I’d been treading water for long enough.

I had a few interviews for full time roles but these only lead me to discover that I really didn’t want to work 50 hours a week for another business and spend several hours a day commuting. A good friend of mine, who handily happens to be a personal effectiveness coach, asked me why I didn’t just do more of my freelance work and on went the light-bulb.

I figured I could spend about 18 months slowly building up the business so that when my youngest went to school I could make the switch from juggling part-time employment and the business to working only for myself.

But where to start? I’d successfully freelanced for all those years but I wanted to run a business and that felt like it should be different.

So in the following few weeks I:

  • Came up with a name and concept for the business
  • Tested it on my target market – small and medium business owners I already knew
  • Honed it following feedback
  • Sought information about pricing – both by researching similar businesses online and by testing it with the target market again
  • Used my network to source a brand and web designer
  • Bought the relevant URLs and launched the website

Networks, networks, networks

In testing the concept on business owners I knew I picked up my first new client, an online cloth nappy boutique for whom I’d done some pro bono work when they were setting up.

I also used my network to put out the word that I was able to take on more work and soon found people handing me introductions to other businesses with which I might work in the future. I’m very lucky to have a broad network of people who run their own businesses, not least because of doing tutoring on transferable work-skills courses for PhD students. I’ve done it for the last eight years and that network is one of the most powerful I’ve come across.

My network produced two more clients and I met a third major contact on a free Business Link course. Four months on from taking the decision to turn my freelance work into a business and I had so much work that my office job was getting in the way.

Limited company vs sole trader

So, deep breath, I took the plunge and handed in my notice. That gave me four weeks to get things properly set up. But what did that mean exactly?

I’d been a sole trader for the six years I’d been freelancing and just did my self-assessment through HMRC every year. But conversations with others suggested that forming a limited company was another option. I was totally boggled with the options at the start, so hopefully the following summary will help if you’re currently weighing your options. Please do get proper advice though, I’m neither an accountant, nor a lawyer!

Some of the benefits of being a sole trader include:

  • you don’t really need an accountant if you keep good records, although you can have one if you want;
  • there’s no obligation to submit accounts (beyond your personal ones for tax purposes);
  • you can still take on staff and business.

Some of the drawbacks include:

  • limited credibility. Some organisations don’t like engaging sole traders and I know some public sector ones that absolutely won’t deal with them
  • you pay personal tax on your earnings, which could work out more expensive than a company paying Corporate Tax on the income instead

But the major drawback of being a sole trader – for me anyway – is that you are personally liable for business debts. What that meant for me was putting in jeopardy my family home, car and all other assets. While I wasn’t planning on borrowing any money – I’m not buying stock to sell on for example – I could be at risk from being sued by clients, for example for a perceived breach of confidentiality.

The major benefit of forming a limited company for me was to protect my family home but there are some other benefits as well:

  • the cost of my accountant is covered by what I save in tax. I’d always put 30% of my freelance earnings aside to cover my tax and NI and it’s likely I can reduce this percentage by the company paying tax on the income instead of me;
  • I can sign up to a childcare voucher scheme and, as I’m strictly an employee of the company, continue to benefit from paying £243 a month towards my childcare;
  • my company is perceived as more credible by some people.

I can only think of one drawback of running a limited company – the obligation to prepare accounts for Companies House every year and the admin and cost this incurs – but as I said at the start, I’ve only been running one for a matter of weeks.

I’m a words girl

Having decided limited company was the way to go I needed an accountant. Again I turned to my network and sourced a very patient one (I’m a words not a numbers girl), who set up the company within a matter of weeks.

If you’re looking for an accountant I’d strongly suggest you get recommendations. If you think you don’t know anyone with an accountant I’m fairly certain you’re wrong. You have a hairdresser/window cleaner/builder/plumber don’t you? I found the accountants all charged similar amounts, so I went with the one who I felt the best connection with.

Chasing payments

So I’ve set up a lot of the things I need to get on with the business of being in business. The next step is to wind up my sole trader affairs, which starts with chasing payment of an invoice which was due four months ago.

I’ve already sent a letter by recorded post (I got it free from this site here – https://desktoplawyer.secureclient.co.uk/dtl/index.cfm?event=base:subsite&subsite=76065&collection=2   – but there are also companies such as this one – http://www.thomashiggins.com/default.aspx – which you can a couple of pounds to send it for you so it looks more official.

After that I’ll be using the online small claims service to recover my money (so far it’s four months overdue) along with interest and costs. It’s a bit daunting to have to do it, but I figure once I’ve gone through the process it will be another tick in a “things you need to know to run a business” box.

Growing (up)

And the other big challenge is to grow my client base for Your Virtual PR Ltd. To make a start on that I’m off to watch the video series produced by Women Unlimited contributor Tanya Smith http://avoidthe5bigmistakes.com

I’ll let you know how I get on with it all and would welcome your feedback, suggestions and words of wisdom.



About the Author: Louise Turner is director of Your Virtual PR Ltd, a PR and communications business specialising in providing creative and great value services to SMEs. The service is delivered virtually, but the reality is, it’s on time and on budget. Read more here  www.yourvirtualpr.com


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  1. Tanya Smith says

    enjoyed your article Louise – and thanks for the mention with the Big Mistakes – appreciated 🙂 Any questions, be sure to come and ask on facebook TanyaSmithBiz is where I’m at!

    1. Louise Turner says

      Hi Tanya and thanks for reading it. I’m sure I’ll have questions! And I know where to find you.

  2. […] click here to see Louise’s first diary entry: Baby Steps […]