# Setting up a Business Advice



## bjarvis2785 (Oct 4, 2008)

Ok then guys, don't worry, it's not detailing related.

Wife is currently on Maternity leave and so i off for the next 11 months.
In that time I would like to get a little business going that she can eventually tend to and hopefully give up work to run the new business - She's currently a nurse doing 20 hours a week, which suits us but would love for her to get out of nursing... it's going down the pan big time.

Anyway, the idea being is an online business selling luxury bath products (think organic, hand made soaps etc - all those lovely buzz words that people so love to use)

I'm more than capable of setting it all up in terms of website, marketing, etc etc
however, what i don't fully understand is the business set up side of things.


 Would i need to set up as a business (i.e. sole trader etc)
If so, am I able to set up and not use the business. Say i set it up, could it lay dormant for a period of time should i choose not to go ahead at that specific time?
 It would be run from home, including keeping stock (not much value) - Do i need to do anything in terms of insurances etc?
 What is the story with VAT?

There's more than likely going to be more stupid questions but that's all i can think of for now 

Thanks in advance


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## The Cueball (Feb 8, 2007)

1) There are different ways to set a business up... but if you want to go ltd, then yes, you can set it up but remain dormant...you have to tell the tax man and still produce accounts etc...but not as much as a trading company

2) double check with your home insurance...and your mortgage lender (if you have one) some of them do not allow you to run a business from home

3) Not sure what story you want...have a linky instead...I think this is the full story here 

:thumb:


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## Shiny (Apr 23, 2007)

As above, check both your home and contents insurance. Most insurers are OK as long as there are no business visitors to the home, but still check as some just don't like it.

Also on the insurance side of things, you should perhaps consider a "working from home" type policy to cover any business contents, stock, and perhaps most importantly, Liabilities, including Products liability.


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## Hou (Sep 20, 2010)

As I am going through the process of a similar thing for the GF, I have a site set up, stock in, everything above board etc. 

A few things to take into account:

There are a lot of these companies running, you might be better with a niche market

If you are wanting to do local craft fairs head down there, check out the local competition and that there will be space as all the ones local to us are already full of bath products etc


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## STEALTH K3 (Dec 29, 2006)

LTD co maybe the way to go


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## wylie coyote (Jul 15, 2007)

I would definitely go the LTD route otherwise you become personally liable for debts as a sole trader...:tumbleweed:


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## DMH-01 (Mar 29, 2011)

I'd go LTD aswell and you can set that up yourself online fairly easily. Register for VAT when your near to making sales of 70k or if you've already got another business.


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## The Cueball (Feb 8, 2007)

even as a ltd company, more and more contracts are asking for a directors guarantee as well, making the person directly responsible....

running a ltd company is not as easy as some think, there are many rules and regulations to follow, and you need to make a choice to do this legal aspect yourself - taking time from more "important" things, or you have to pay and trust someone enough....

:thumb:


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## centenary (Sep 5, 2010)

bjarvis2785 said:


> Ok then guys, don't worry, it's not detailing related.
> 
> Wife is currently on Maternity leave and so i off for the next 11 months.
> In that time I would like to get a little business going that she can eventually tend to and hopefully give up work to run the new business - She's currently a nurse doing 20 hours a week, which suits us but would love for her to get out of nursing... it's going down the pan big time.
> ...


Essentially if you go ltd, the company goes bankrupt you dont lose your house. If you're a sole trader, you could. However, running a limited is more costly but easier to claim expenses etc.

I wouldnt advise setting up a ltd co unless you are going to trade through it as it is just as expensive to set it up then apply to hmrc to close it down. You'd likely be better starting as a sole trader then go ltd if your turnover warrants it.

If you are trading from home you should inform your local council and insurance companies. You would be liable for an element of business rate and business insurance. Home insurance wont cover your stock in the event of any loss. of course many people do not do either of these things!

I'd advise you look into public liability in case you have anyone buying from your door. professional indemnity may be required too.

You only need to register for VAT if your turnover is about 70k a year. However, you can register even if your T\O is under this. You could apply for the flat rate scheme which is a simplified VAT scheme with less admin.

Personally I wouldnt bother with VAT unless your T\O approaches 50k a year.

Good luck!


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## bjarvis2785 (Oct 4, 2008)

Thanks for the info guys, much appreciated.

There is of course a lot of research in to the market and do agree that it's competitive, but believe I could make a go of it 
I have no thoughts of setting up the next Bodyshop from the word go. It's literally something to keep the missus quiet and should it be able to provide enough cash then for her to give up her nursing.

Looks like I need to get on the phone to my mortgage and insurance companies to see what they say too.
I wonder how many people start it all going without all the necessary insurances etc 

Thanks again guys


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## Waxamomo (Jun 18, 2008)

Some great advice above, but I would also say to go and have a chat to a local accountant, I can't speak for all of them, but most of them will give you a little point in the right direction, explain to you the benefits of sole trader and ltd companies etc etc

You may only get the info that is already in this thread, but it's nice to chat to someone face to face :thumb:


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## Method Man (Aug 28, 2009)

You should find a lot of information on this link:

http://www.businesslink.gov.uk/bdotg/action/layer?r.s=tl&topicId=1073858805


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