A short while ago I wrote a review about The Small Business Guide to Apps which is an e-book available from Brightword Publishing. Shortly after they asked me if I would like to read and review another one of their books; Turn Your Talent into a Business by Emma Jones, which I was more than happy to do….

I didn’t really know what to expect with this book; I’ve read other books by Emma Jones and found them very helpful and to-the-point. What I was not expecting was a 260 page book to land on the doormat (it is also available as an e-book). The book has 10 chapters which walk you through all aspects of earning a living from your hobby:

1. Making the move from hobby to business
2. I’m Off
3. The must-dos
4. Create the perfect work environment & top tech tips
5. Starting on a budget and basic financial planning
6. Selling
7. Make some noise!
8. Putting on a professional face
9. Happy customers and a balanced business – a recipe for success
10. Grow the business without outgrowing home

As you would expect some topics are covered in a lot more detail that others, but all of that detail is relevant. The book includes a lot of case studies on people who have turned their hobby into a successful business, whilst these are all craft-type hobbies (the book has been written in partnership with Country Living Magazine) the content can be applied to almost every business. Each case study will give you valuable tips about how to start out in business from people who have been there and done it.

Sometimes business books can be hard to read, but this one is very easy and you’ll be surprised at how quickly you can read through it. If you are thinking of starting your own business this book will be a very enjoyable read for you. All the information you need to be able to start on your own is included within the 260 pages, along with some fantastic advice about how to conduct your business affairs and what to do if you need any help.

Whilst it is more geared towards craft hobbies the content does not focus too strongly on crafts, which makes the book ideal for anyone. There is a lot of content about how to sell your product/service and promote your business to let people know that you exist, which is vital for small businesses – chapters 6 and 7 make up nearly half of the book.

The book costs £12.99 (£9.74 at the time of writing this) and the e-book is available for £5.00 (£4.25 at the time of writing this) and both represent excellent value for money. If you don’t mind not having a real book to flick through the e-book is a bargain.

Whilst this book gives you all the information and knowledge to successfully make the leap from hobby to business, it won’t make profits for you. You will still have to do the hard work and make your business a success. Fortunately there is a lot of help on hand for start-ups at the moment, meaning it has never been easier to turn your talent into a business.

What are you waiting for?

 

In previous blog posts I’ve said that closing your door (if you work from home) is a great way to let people know that you are working and to leave you alone. I’ve found that this works, and I hope that you have too. What about when you are the only one in the house – do you still close the door?

Personally I do as it blocks me off from the outside world and makes it easier to get my head down and carry on working. If the house phone rings I’ll usually look up from my desk, see that the door is closed and that acts as a message to say ‘You’re working – ignore it’. If the phone rang whilst I was working in my day job I wouldn’t answer it because I’m not there.

Leaving the door closed is also helpful when people do come home; it helps block out any noise that is created by the TV, phone calls etc… You might come up against complaints of being anti-social but those will quickly subside when you can show that being left alone to work helps make the business more successful and brings more money into the household.

Do you find that keeping the door closed, even when you are the only one in the house, helps your productivity?

Advertising is always a massive problem for small businesses – we want it but cannot always afford it. Most of us rely on word-of-mouth advertising, or advertising in places which are free/don’t cost a great deal. By doing so we run the risk of not getting to our target market.

Some readers may know that I am a massive Rugby League and Leeds Rhinos fan, last week the RFL (governing body) announced a new sponsorship deal with Eddie Stobart who will sponsor the competition for the next 3 years after Engage Mutual ended their association with the sport.

In brief, the terms of the deal are: Eddie Stobart will be branding 100 of their trucks in Superleague artwork, in effect creating a mobile advertising board. Oh, and they are not paying the RFL any money at all for doing this. There was an offer on the table from Betfair which, allegedly, was around £750,000 per year sponsorship but the RFL decided the Stobart deal was the best long-term strategy.

This news has been met with a mixed reaction from rugby league fans; personally I think it is great news. Rugby League has suffered from a lack of national exposure for a long time and will always struggle to compete with the Premier League, but with Stobart’s trucks giving some free advertising it may help increase the profile of the sport. 100 trucks out of 2,500 is not a lot, but it’s better than none. The RFL, for all their faults, have never been afraid to change the way things are done in rugby league – summer rugby, video technology, rule changes etc…

Getting back to the main point, is free advertising worth it? If a whole sport thinks that free advertising is a good idea, surely it must be? There are a few points to take note of though:

• Make sure the advertising is done in the correct place; it has to be relevant.
• It may take time to see any return from the advertising, possibly even longer than paid adverts.
• Take time to weigh up all your options and make sure you select the one that is right for your business

Most importantly don’t be afraid to make changes, changing the way you do things could put you ahead of your competitors.

For those who are interested, the Stobart Super League starts again on Friday 3rd Feb on Sky Sports – why not tune in an enjoy 80 minutes of fantastic sporting action?

It’s a one-stop-shop for this week’s 3 most viewed posts on the blog:

Self Employed Checklist Part 1

Self Employed Checklist Part 2

Self Employed Checklist Part 3

Great to see that it looks like a lot of people are considering starting out life as self-employed. I hope that you’ve managed to find out everything that you needed to know in order to start your new business venture.

Other posts that you may want to read if you are self-employed are ‘Tips for Assigning A Credit Limit‘ and ‘5 Easy Ways to Stay On Top Of Your Accounting‘

If there are any topics that you would like to see me blog about, please  leave a comment and I’ll see what I can do

I’ve just been reading this article on the Small Business Trends website, which gives 5 easy ways to stay on top of your accounting if you are running a small business. If you don’t want to read the full article, I have summarised each point below:

1. Make Friends with Technology
2. Call In Reinforcements (contact me if you would like help)
3. Visual Reminders to Open Your Eyes
4. Make Falling Off the Wagon Hurt
5. Be Publicly Accountable

The full article can be read here and is very useful for those of us running a small business.

If you’ve successfully sold your product/service to a new customer you will need to think about how much credit, if any, to extend to them. Even though you may be dealing with a large reputable business, you must conduct your own research into them to decide the level or risk which you expose yourself to.

What can you do to find out more about your customer?

1. Gather trade references from other suppliers which the customer deals with
2. Conduct a credit search if your budget allows
3. Ask for your customer to sign a bank status enquiry form for you to submit to their bank
4. Search Google’s News feature to find anything about them in the press

When all this has been done, think about what level of trade you will be carrying out with them. If the customer has fantastic trade references and credit checks, but their turnover will only be £1,000 per month, it’s pointless giving them a £10,000 credit limit. You run the risk of the new customer loading up their account to the £10k limit and then struggling to get paid. Make sure that the credit limit is realistic. Bear in mind that you will still be expected to pay your suppliers on time even if you are not being paid to terms by your customers.

Payment terms will always be an issue; you want to be paid quickly and your new customer will want to extend the credit for as long as possible. Most businesses operate on 30 days from invoice date, or end of month following (which will average at about 45 days credit). Again you need to decide the level of risk you wish to be exposed to. If you offer a customer 60 days credit, it could be 90 days before you find out that they are not going to pay you. This will only happen in the minority of cases but it will still be annoying when it happens and have a serious impact on your business. What-ever payment terms you set make a note to contact the customer a week before the first invoice is due to check that it has been passed for payment.

If you are experiencing late payments do not be afraid to put the customer’s account on ‘stop’ until the payment has been received. Doing this will no doubt upset the customer, but are they really a customer if they aren’t paying to terms and causing you problems? Start as you mean to go on.

Regularly review the credit limits to ensure that they are still realistic for the customer. If your product sells well you may need to increase the customer’s credit limit to enable more trade with them.

If you and your customer know where you each stand from the first time you trade together, it will help to maintain a happy working relationship.

If you manufacture something from scratch this will be a vital piece of information for your business, but sometimes businesses don’t have a clue what a cost price is! In simple terms a cost price is the price it costs you to make your product. Sales may be going up and up, but if your cost price is high and also rising you may not actually be making much profit.

How can you work out a cost price? Let’s say that you make cakes: the cost price is the total cost of:

• Ingredients/Raw Materials (milk, eggs, flour, sugar etc…)
• Cost of baking the cake (electricity/gas for the oven)
• Packaging costs
• Your time – eaisly the most overlooked

All these things combine to give you the cost price of your cake. Don’t forget though that you need to apportion the ingredients accordingly. If you buy a 2kg bag of flour, only a fraction of that will go into the cake, the same for the other ingredients. If 2kg of flour costs you £5.00 but you only use 500g of flour in the cake, the cost price for the flour in the cake is £1.25 (£5/4).

The cost of the electricity/gas can be hard to work out, but if you are able to bake more than 1 cake at a time the costs will come down per cake.

Your time is easily the most overlooked aspect of a cost price. Work out how much you think that your time is work per hour, then work the cost out from how long are you physically working to make the cake. This includes making the mixture, decorating and packaging it.

Once you have calculated your cost price, you can then start to arrive at a selling price to enable to you make a profit for your product. But remember to reguarly re-evaluate your cost price as raw material prices increase and decrease regularly. When this happens you will need to make the decision to either absorb these costs yourself or pass them on to your customers.

This is the final installment of my short guide aimed at helping you to start out self-employed life correctly. Your can read parts 1 + 2 here:

Self Employed Checklist Part 1

Self Employed Checklist Part 2

You’ve now registered with HMRC, chosen your business name, registered for VAT and PAYE (if applicable) and put a record keeping system into place. What about when clients pay you and how to you let people know you exist?

7. Business Stationery

You  must make sure that any business stationery you use has on your name and your business name i.e Your Name t/a Your Business. This will include stationery such as letter-heads, business cards, invoices, quotes. It lets people know who you are and helps create a professional image. If you do not have the talent to create your own stationery, seek help from someone. You can only make one first impression with a new client.

8. Bank Account

Where are you going to keep the money that you earn through your business? If you are a sole trader you could pay it into your own personal account, but this could present problems when trying to track payments and receipts. Consider setting up a separate bank account to handle your business’ transaction. Several banks now offer free business banking for extended periods.

9. Website

The internet has brough the business world closer together. You can now trade with anyone anywhere in the world. A well presented and maintained website will help increase your profile and could lead to more sales. There are lots of hosting companies that all offer excellent rates for basic websites. Some of them come with software to help you create your perfect website

10. Social Media

This is another fantastic way to let people know about your business and it’s service/products. Twitter, Facebook & Linked-In are fantastic for small businesses. You should strongly consider creating a social media presence and using it to drive people to your website and make new business contacts. There is an excellent book by Mark Shaw about using Twitter for small business – Twitter Your Business – it’s cheap and very useful!

 

Don’t lose sight of the reasons that you started your business. Keep re-assessing your goals and adjusting them as needed on your path to success. If you ever need any help with the bookkeeping side of your business, please don’t be afraid to contact me

Welcome to Part 2 of my guide, aimed at helping you start self-employment correctly. If you missed Part 1 you can read it here

So far you have registered with HMRC as self-employed, chosen your business name and (hopefully) not annoyed the neighbours if you intend to work from home. What next?

4. Do you need to register for VAT?

If you expect to have turnover of more than £73,000 you will need to register for VAT. The easiest way is by doing it online. If you are a business which primarily offers a service and does not make many purchases, if may be more beneficial for you to register for the Flat Rate Scheme (conditions apply). This can help simplify your accounting process as you pay a set percentage of your turnover as VAT. You can register for VAT voluntarily if you wish.

5. Do you need to register for PAYE?

If you intend to employ other people in your business you will need to make PAYE and NIC payments which will mean you have to operate a Pay As You Earn (PAYE) system. You can learn more about PAYE here

6. Set up a record keeping system

You must document and keep detailed records of all transaction that take place within your business. Even if it is just a folder to store your receipts and invoices in order. If anyone asks you ‘Show me proof of X,Y & Z’ you will be expected to produce the relevant documentation. This blog posting gives you some advice about how to keep your records in order

 

You’re now up and running as a self-employed sole trade. Come back for the final installment tomorrow to put the finishing touches to your business

Over the next 3 days I will post a series of blogs walking you through some important aspects of becoming self-employed as a sole trader. If you follow this advice you will be trading correctly from the first day you start business.

1. Register with HMRC as self-employed

This is the most important thing to do and should be done straight away. It’s quick and easy – all you need to do is fill out 1 form and send it back to them. The form is called CWF1 and can be downloaded from here

2. Choose your business name

Your trading name should not be the same as, or very similar, to one that already exists. You should also take care to ensure that the business name does not cause offence or is misleading to anyone

3. Business rates & planning permission

If you are planning on running your business from home you may have to pay business rates on the portion of your home that you use for business. However, you may not have to pay rates if the space you use is also used as a spare bedroom for domestic purposes.

If your business is likely to cause a nuisance to your neighbours or you need to make building alterations to your home, you may need planning permission. Speak to your neighbours prior to commencing any trading and explain what you are going to be doing, you may find that they are very understanding.

 

Don’t forget to come back tomorrow for Part 2, or follow me on Twitter to be alerted when the post is published