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Message started by woodsmith on Jun 27th, 2004, 2:33pm

Title: Guide to starting out as self employed.
Post by woodsmith on Jun 27th, 2004, 2:33pm

Guide to starting up as self-employed.

This guide has been compiled from contributions to the trade and DIY forums, by Ask The Trades members.

Which Trade?

Good money comes with rareity of skills. At the moment plumbers appear to be earning good money. But because of media hype and interest many, many people are looking to leap across to that trade. If there were more plumbers than jobs then it stands to reason that rates would fall, because plumbers would undercut each other in order to find work.

It's the same with builders etc. If you are motivated by money then I'm afraid the pot at the end of the rainbow is not going to be found by trying to identify which trade or career provides you with most income

Don't just look for the seemingly biggest pay packet. I tell you, its not worth a penny if you hate the job you've invested years of your life to work in.

You want to look for a career that best utilises the skills you have, that inspires you to get out of bed in the morning and that you enjoy enough to not only succeed in but to continue to learn about in the coming years

Start up essentials

At least £2M Public Liability Insurance.

Compile a stock list for items you'll need to keep to hand. See what offers the local wholesalers have each month as you'll be buying a load at first you should get good discounts.

Itemise your toolkit requirements, (this will grow as time passes)

Will you need a van? Is it best to buy or lease?. Don't forget to allow a bit for fitting it out.

Storage & organisation, if you start off with a good system you'll save hours and hours searching for the part you "know" you have somewhere..

Answerphone etc.

Mobile phone costs.


Access equipment (ladders/steps etc)

And don't forget all these items can be offset against tax.

TAX and Book-keeping

Right from the start keep all your receipts and invoices. Get an accounts package or get a proper accounts book. Tell the taxman you are starting self employed as if he finds out later he will come down hard on you. It is unlikely you will pay much tax in the first year due to the costs of starting up.

Also you will need to pay National Insurance contributions.


This is often the hardest part of the job

Estimating for any work is usually a gamble of sorts, my suggestions to you are:-
1) cost the materials required (from wholesalers) and add between 10 + 25% to the total.
2) decide what you want to earn per hour or per day for your labour.
3) "estimate" how long you reckon the work will take you to complete and multiply by your hourly / daily rate.
4) add 10% to the cost of labour and materials for contingencies and you will arrive a your price.
5) dont forget to add VAT where appropriate.

As you are just starting out you may want to be very competetive with your prices, but make sure that you are not working for next to nothing. Experience gained as you go along will tell you whether your estimates are too cheap or too expensive.

You also need to find out what jobs you can make money at, and the ones which are so small or awkward that you can't make them pay.

Always try to avoid giving over the phone estimates - its a waste of time unless it is a good customer whom you trust.

Make an appointment to call and see them - try to work it out so that you are in the area and not making a special journey.

Take a purpose designed form with you (either design and print your own from your PC and put carbon paper between or get some pads printed up with carbonless paper) and write everything down, work out your costs and give them a written est/quote. Much better to have a professional looking document than a figure on the back of your hand/fag packet/till receipt etc. Or take your form with you, fill it out on site then return home and type it up & post it/drop it off to the customer. Whatever you feel you can best cope with but make it as professional as possible.

It is vitally important to have a written quote/estimate. Both you and your customer have all the details to hand. Customer can't claim you said this or you said that - its there in black and white. Also the customer has all your details on the form - address, phone etc which is very reassuring (don't just list a mobile number - looks like a scam).

PUT YOUR TERMS & CONDITIONS ON THE REAR OF THE FORM/QUOTE that you give the customer - this way when they agree to your price they also agree to your T's & C's!!! (this is particularly important if you want to claim interest on late payments) I am happy to provide a copy of T's & c's that anyone can adapt to their own needs if necessary.

By visiting the customer and talking to them face to face you can gauge their responses, get to know what they REALLY want/need and advise them appropriately.

Take a neat document case or folder with you with brochures and perhaps even photos of other similar work you have done to show them.  

Though not as important:

Customers don't expect tradesmen to be dressed in suits they also don't expect you to be really messy either. Smart work gear eg - Snickers trousers & Sweatshirt with your own logo on are impressive - you can buy the iron on transfer paper for inkjet printers etc from stationers. Customer can see they are dealing with a person who takes a pride in even their work appearance so it follows that your work will probably be neat and you will tidy up after yourself.

Show them your knowledge but don't baffle them with too much techno-garble.

NEVER bad mouth a fellow tradesman (even if he/she is a dork) just smile and say you can't comment but you will be able to sort (whatever) out for the customer.

As others have said - recommendation is by far, the best way to advertise. You will start to see a gradual increase in good customers returning and recommendations if your work is good, reasonably priced (that doesn't mean cheap), you return if there is a problem, treat your customers with respect, and play fair.

Don't discount the fact that your quote can also be too cheap! People will invariably get a few quotes and as a rule discount the cheapest most of the time, opting to go middle of the road.
After a while you get to know a situation from intuition... the job, the reaction to quote, the person being genuine, the area, etc. etc.; always trust your intuition.
Do not be disheartened, only yesterday I was called about a job plastering a house I quoted for 18 months ago (I had a mate who was asked once if he would do a job he had priced seven years previously to change windows and the cheeky blighter asked if the price still stood) people will always price ahead and quotes you have forgotten about will come through, maybe weeks later.
Another point to consider is the source of your enquiries, while things like these free papers are cheap to advertise in the type of people who would use them are those who want a job done for next ta nowt!!

Don?t be cheap, no tradesmen worth their salt is these days.

This guide has been compiled from contributions to the trade and DIY forums, by Ask the Trades members.

Title: Re: Guide to starting out as self employed.
Post by Gromit on Jun 27th, 2004, 3:33pm

Thanks Keith thats usefull, a copy of your T's & C's would be appreciated

Title: Re: Guide to starting out as self employed.
Post by woodsmith on Jun 27th, 2004, 5:01pm

Gromit, it was Mudd who offered her T&C's. I'll ask her if she will post them.

Title: Re: Guide to starting out as self employed.
Post by coggy on Jun 27th, 2004, 6:30pm

Excellent post Woodsmith.

As people on here know i have just set up myself.  I set up as a Ltd company.  It took 12 months of planning and applications etc.

I spent a total of 13,000 on tools, liability insurance, stationary, new computer, consumables, advertising, power tools, van, van insurance, accountant, tool insurance , van vaults, alarm fitted on my van, etc etc.

Because i have just done all this i would be willing to give my advice/experience to anyone interested.  I have spreadsheets of all the tools etc i got for the start up, so please post any questions and if i can help i will.

By the way i am now booked up until August ;D so all i can say is if you are willing to put in a lot of hard work and have a real passion for your trade then go for it!!!!!!


Title: Re: Guide to starting out as self employed.
Post by mailee on Jun 27th, 2004, 10:16pm

Thanks for the info woodsmith, very informative indeed. I have been thinking about going it alone again in the near future as the job isn't looking so secure now. One thing I would like to ask though is about the indemnety insurance, what sort of cost will I be paying for this?. I have the transport and most of the tools so I do have a start already. Great, keep it up it helps us all.  ;)

Title: Re: Guide to starting out as self employed.
Post by greg on Jun 28th, 2004, 9:04am

You spent a fair bit on starting up Jason, how did you arrange your finance

Title: Re: Guide to starting out as self employed.
Post by The_Shark on Jun 28th, 2004, 10:53am

Keith et al,
Thanks for the informative posting. I am looking at going self-employed in the next few months, and you have listed many factors that I will need to consider.
Thank you, and keep them coming

Title: Re: Guide to starting out as self employed.
Post by coggy on Jun 28th, 2004, 8:32pm

You spent a fair bit on starting up Jason, how did you arrange your finance

The vision of my business is to take on and train long term unemplyed people. Also im a company limited by shares. All this was to fall into the criteria to apply for funding and to set up as a social enterprise business.

It took 12 months to prepare the application, business plan, market reserach, costing etc etc and finally got the funding ;D


Title: Re: Guide to starting out as self employed.
Post by greg on Jun 28th, 2004, 10:49pm

well done m8 - wish id looked more into grants etc

Title: Re: Guide to starting out as self employed.
Post by Gromit on Jun 28th, 2004, 11:56pm


One thing I would like to ask though is about the indemnety insurance, what sort of cost will I be paying for this?

70 ish is what I pay

Title: Re: Guide to starting out as self employed.
Post by Mr_Mike on Jan 15th, 2006, 3:36pm

"I am happy to provide a copy of T's & c's that anyone can adapt to their own needs if necessary."

Yes please, can I get a copy ????
Many thanks in advance.......

Title: Re: Guide to starting out as self employed.
Post by woodsmith on Jan 15th, 2006, 6:16pm

As requested;

This is a sample set of terms and conditions kindly supplied by Mud a forum member, these are from a heating and plumbing company and would need some adapation to suit your own business.  

These Terms and Conditions are given free of charge and may be freely distributed but may NOT be charged for in any way.  

The author, and the Ask the Trades Forum, take no responsibility for any liabilities arising from the use of these terms and conditions howsoever caused.  

Terms & Conditions  
The Company, We, Us - means (Insert your firms name, address, phone number etc here) and also covers all employees thereof. ?The Customer, you, - means the person who agrees to the work being undertaken by the Company and the person who undertakes to pay the bill. ?Services - means the work undertaken for the customer. ?Products - means plumbing, heating or electrical appliances which the customer agrees to buy from the company. ?Materials - means items such as pipe, insulation, couplings etc. ?Price - means the price of the goods excluding VAT and any carriage, packing and insurance costs.  
1. General description of business  
The Company offers basic, domestic plumbing (water based) to current British Standards and codes of practice and domestic gas services to current gas safety installation and use regulations ( 1998 ) as accredited though the Approved Code of Practice (ACS) and CORGI. ?  
2. Conditions  
2.1 These conditions shall form the basis of the contract between the Customer and the Company in relation to the sale of good and supply of Services, to the exclusion of all other terms and conditions which the Customer may purport to apply under any purchase order or confirmation of order or any other document.  
2.2 All orders for Products or Services shall be deemed to be an offer by the Customer to purchase Products or Services from the Company pursuant to these conditions.  
2.3 The offer of Products and Services by the Company does not constitute acceptance of the Customers order. ?The Company reserves the right to refuse to supply Products or Services at their discretion.  
2.4 Acceptance of delivery of products and acceptance of Services carried out shall be deemed to be conclusive evidence of the Customer's acceptance of these conditions.  
2.5 These Conditions may not be varied except by the written agreement of the Director of the Company.  
2.6 These Conditions represent the whole of the agreement between the Company and the Customer. ?These supersede any other conditions previously issued.  
3. Price  
3.1 The price shall be determined by the engineer attending the Customer in accordance with the Company's current price list.  
3.2 The price shall be determined by the estimate supplied to the Customer by the Company providing that all Products, Materials and Services outlined in the estimate have been supplied. ?The Company will charge separately for any additional Products, Materials or Services supplied to the Customer, which are not detailed on the estimate.  
3.3 The price is exclusive of VAT, which shall be due at the rate in force on the date of the Company's invoice.  
4. Payment, charges and Interest  
4.1 Payment of the Price and VAT shall be due at the time of the work being completed unless authorised by an employee of the Company wherein the Price and VAT will be due within 30 days of the date of the Company's invoice.  
4.2 The Company reserves the right to charge interest on overdue invoices which shall accrue from the date when the payment becomes due calculated on a daily basis until the date of payment at the rate of 8% per annum above the Bank of England base rate from time to time in force. ?Such interest shall accrue after as well as before any judgment.  
4.3 The Company reserves the right to charge an administration fee on overdue invoices to cover administration and collection of the debt. ?The administration fee will be from a minimum of ?10.00 and up to 25% of the original invoice amount plus interest to date of payment.  
4.4 The Customer shall pay all accounts in full and not exercise any rights of set -off or counter claim against invoices submitted by the Company.  
5. Products  
5.1 The quantity and description of the Products shall be as set out in the Company's estimate. ?  
5.2 The Company reserves the right to substitute any product for one of equal or better quality at any time. ?The Company will make every effort to inform the Customer of any substitution of Products before the day of installation/delivery. ?The Company takes no responsibility for their inability to inform a Customer of a change/substitution where the Customer is unavailable at the address provided by them or by phone on the telephone number provided by them during normal office hours of 9.00am to 5.30pm, Monday to Friday.  
6. Services  
6.1 The services provided by the Company are subject to the relevant British Standards, Codes of Practice and gas safety installation and use regulations ( 1998 ), which are current at the time of the work being undertaken.  
6.2 The Company reserves the right to use its professional judgement in the undertaking of any services offered to the Customer where the Customers wishes directly or indirectly contravene current Health and Safety regulations, British Standards and codes of practice and gas safety installation and use regulations ( 1998 ) or where the Customers wishes contravene a Manufacturers instructions.  
6.3 By allowing the Company to work for them, the Customer accepts the professional judgement of the Company where repairs, parts, products, services and materials are concerned. ?Where judgement is debated the Company will only accept the direction of a universally recognised authority such as HSE or CORGI but not another trader/company.  
6.4 The customer accepts that time involved in travel to obtain parts /materials to complete work/repair is a chargeable at the basic hourly rate as outline in the Company?s current price list  
7. Warranty  
7.1 The Company warrants that the Products and Materials will at the time of delivery correspond to the description given to the Customer by the Company in the estimate. ?All other warranties, conditions or terms relating to fitness for purpose, quality or condition of the Products and Materials as supplied by the original manufacturer are excluded.  
7.2 The Company warrants that the Services provided by them will be effective for a term of no less than three months (for repairs) and up to two years (for certain boiler installations) as detailed in the Company's estimate to the Customer. ?See list below:  
7.3 New boiler/ Central Heating installation - Warranty for 2 years from installation date.  
7.4 Appliance repair with new parts - warranty for 6 to 12 months dependant upon manufacturers parts warranty from date of Company invoice.  
7.5 Appliance repair with second hand parts (Customer informed and agrees to use of second hand part) - warranty 3 months from date of Company invoice.  
7.6 Any other Service such as installation of bathroom, shower, washing machine etc (excluding Products which are covered by Manufacturers individual warranties) - warranty for 12 months against faulty installation.  
8. Title and Risk  
8.1 Risk shall pass on delivery of the Products and Materials to the Customer's address. ?  
8.2 Notwithstanding the earlier passing of risk, title in the Products and Materials shall remain with the Company and shall not pass to the Customer until the amount due under the invoice for them (including interest, carriage, VAT and costs) has been paid in full.  
8.3 The Company may at any time before title passes and without any liability to the Customer repossess and dismantle and use or sell all or any of the Products and Materials and by doing so terminate the Customers right to use, sell or otherwise deal in them and for that purpose (or determining what if any Products and Materials are held by the Customer and inspecting them) enter any premises of or occupied by the Customer.  
8.4 The Company may maintain an action for the price of any Products and Materials notwithstanding that title in them has not passed to the Customer.  
9. Complaints  
9.1 The Customer must make the Company aware of any faults or discrepancies with any Services, Products or Materials supplied within 30 days of the Company's invoice date.  
9.2 The Company will attend the Customer with regard to any faults or discrepancies within 30 days from the date of the complaint being made.  
In event of a complaint the Customer must allow the Company a reasonable time in which to return to the Customer in order to rectify the problem. ?The term 'reasonable time' will be deemed as being within 24 hours for problems which may be deemed to cause a significant risk to Health and Safety, up to 7 days for problems relating to the fundamental operation of a Product or Materials and up to 30 days for cosmetic defects.  
9.3 The Customer will not employ any other tradesman/company for the purpose of rectifying any fault associated with the Services, Products or Materials as supplied by the Company without the express permission of a director of the Company.  
9.4 No claim, invoice or demand for payment relating to work by another tradesman/company for remedial work as detailed above will be entertained by the Company unless the Company failed to attend the Customer in the 'reasonable time' allowed as listed above or unless authorised in writing before the work was commenced by a director of the Company.  
These terms do not affect your statutory rights.  

* ? ? * ? ? * ? ?* ? ?* ? ?* ? ?* ? ?* ? ?* ? ?*

Needless to say, you will need to change:  
1. ?the word 'Company' to reflect the actual type of business you run.  
2. The plumbing references to reflect your area of trade  
3. anything else that doesn't reflect the way you trade.  
Cheers Chaps and Chapesses.  

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