Tuesday, 21 February 2012

Setting Up A Limited Company (Ltd) What Does It Mean?


Tired of being bamboozled by the term 'limited company'? As a freelancer or contractor, it is important to know the difference between working for an umbrella company or choosing to start up a Ltd company. Contractors, sole traders and limited companies are all different business mediums in which people chose to earn an income through. Choosing the best medium for you is a big decision and should be done through an independent advisor or a specialist contractor accountant.
Limited Company: Back To Basics
  • A limited company is often shortened to the abbreviation Ltd, and usually appears after the company's name.
  • Setting up a Ltd means that the business is owned by its shareholders, or that individual shareholders own a small portion of the business.
  • A Ltd is known as having 'limited liability' structures in place. This is its first advantage. It means that if the company should fail, the shareholders of the company are not liable for its debts.
  • Operating under a Ltd means investors or shareholders in the company can only lose the money they have invested and no more.
  • Trading under a Ltd means that your personal and business finances are kept separate. This requires you to set up a bank account underneath the Ltd company's name. As a contractor or freelancer, the shareholder is normally simply the individual freelancer. You can however split the ownership between different people including family members.
When is starting a Ltd company a good idea?
Setting up a limited company or choosing to work through an umbrella company is in one of the options you need to consider once you've made the leap to become self employed. It may make the difference between becoming a successful contractor with a steady income, or your business floundering. It is always best to talk in person to a specialist contractor accountant as they can assess your individual circumstances and needs. Below are a few rough guidelines on whether an umbrella company or setting up your own Ltd company is the best option for you.
  • If you are an established contractor, already contracting for at least 6 months, or planning to contract for the long-term or indefinitely, then starting up a Ltd company may be for you. You will already have a rough idea of the way in which freelancing works in regard to paying tax, NICs and claiming expenses.
  • If you are new to freelancing or contracting than it is best to work under an umbrella company until you find your feet.
  • Ltds are more suitable for higher earning contractors on higher rates of pay. If your earnings start reaching or tipping over a £40,000 per annum threshold (equivalent to £150+ a day) then setting up your own Ltd is more beneficial.
  • Individuals starting Ltds will have a genuine interest in setting up their own business. A Ltd corporate structure looks more professional to customers and clients but a contractor should be aware of the added responsibility it entails.
  • Setting up a Ltd is a sign of independence but in turn requires slightly more administration. Completing annual returns, personal and company tax returns, making payments and signing various documents all will have to be done. Also calculating your own expenses with receipts and bank statements will require the Ltd contractor to be more confident with their administration.
  • Ltds must negotiate the minefield of IR35s, a piece of legislation introduced by HMRC. Does the IR35 apply to your Ltd company? There are helpful companies out there who can offer contractors a limited company service such as a specialist contractor accountant to deal with difficult HMRC paperwork.
  • As discussed before, the limited company is your sole responsibility and you will need to arrange business insurances directly.
It is important to reiterate, filling out tax returns and completing other administrative paperwork can be a cumbersome task. If you are ready to progress to the next step in your career by becoming a Limited Company (Ltd) it can be a richly rewarding experience. If however the process seems too daunting then employing the services of a specialist contractor accountant is the best way of securing that all HMRC paperwork is filled out correctly and on time; avoiding big penalties from the tax man. A specialist contractor accountant can help you by either setting up a limited company or by managing an existing one for you.
For the self-employed, tax can be a headache. Forming a limited company can be an efficient way to manage tax affairs, but ensuring you get the right structure for your business is essential.

Thursday, 16 February 2012

Business Quotes: The Economist......

Attributed to Laurence J. Peter:

"An economist is an expert who will know tomorrow why the things he predicted yesterday didn't happen today."

Wednesday, 15 February 2012

Coming Up With A New Business Idea


When you have made the decision that you want to start your own business the choices can be overwhelming. There are so many different things that you can do, so many people offering you advice, it can be tempting to fall into analysis paralysis. There are some basic concepts of new business formation that I have seen and thought about over the years that may provide you a starting point.
One of the most defensible businesses is a combination of product and specialized service that works with local customers who have a need. Retail examples are dry cleaners and restaurants. They each have special equipment like steam boilers or kitchens, have some level of consumables like dry-cleaning fluid or food, and expertise in the staff that make them into good, stable businesses. Although these are good businesses, they are not ones that I would choose to start. There is a lot of competition, profit margins are low, there is a lot of management involved, and there is no clear path to making enough money to fast growth. The combination of product and expert services with local customers is a good one, but it has to be in a more profitable arena
The things I look for in new business ideas are the following: 
  • Combination of product and service.
  • Clearly and narrowly defined customer base that is willing to spend money.
  • Ability to create a barriers of entry to competition.
  • Repeating sales instead of one-time sales.
  • Customer acquisition and servicing cost low versus profitability.
  • Future growth prospects.
  • Initial investment of capital and time.
It is also very important to know your own interests. Again, with a whole world of business ideas to choose from, you should pick something that you enjoy and already have an interest in. There are ways to make money in just about anything. If your interest is music, then you should start something involving music because it will be fun and you probably know what musicians and music lovers want and need. Don't make things hard on yourself, but also don't go down the path of mediocrity. It would be easy and simple to take a job as musician or music instructor, but that is just a job. It is harder yet much more rewarding to come up with an unfulfilled need and meet it. 
  • Know your own interests.
  • Think about unfulfilled or poorly filled needs.
  • With constant technology change, are there new and better ways to do things?
  • Is there a new business concept in a similar industry you can copy?
Instead of striking out new in an entirely unproven direction, take stock of what you already do on a day-to-day basis. Some of the most successful new business were started by employees that saw an opportunity to address a profitable niche and were frustrated by their company ignoring it for so long. There are many great things about leaving the company that you work for and starting a niche business in the same industry, especially if it does not compete with your current employer: 
  • Existing base of potential customers that you already know.
  • Your industry reputation will help you succeed.
  • Focus on niche market allows for clear definition of mission.
  • Potential partnership opportunities with companies in your industry.
After coming up with your idea, there are many things you can do with it. Realize that it may be valuable, so don't go around telling everyone that you are going to do it. Conversely, realize there are few people out there who are willing to take on the risk of starting a new business, so you can discuss the idea in general terms to test the waters. Then see if there is already somebody doing this, whether it is in your market or somewhere else. If it still seems like a good idea, start running through the profitability numbers. If it still seems like a good idea, great! You can start making preparations and plans to take it to the next step.
Get business startup and operations perspective, as well as excellent online resources at Priority Cue.
Article Source: http://EzineArticles.com/6874796

Friday, 10 February 2012

Time Or Money - Which Would You Choose?


Firstly, there was a point in 2011 where I was working 80-90 hours a week managing a business and running my own Company. I believed this was success at the time. Hard work and long days.
Then I read a little book called the Four Hour Work Week, which identified I was mostly keeping myself busy, without achieving any defined results. The 'work' that I was doing was neither productive nor effective. Often it was fixing little minutiae (emails, design) that bared no weight to the return on my time investment. But, of course at that point my definition of success was hard work.
The 4HWW made me take stock of my life. What were the 20% of tasks that very producing 80% of my income and what 80% of tasks were virtually doing nothing (the email, design etc)?
I found that one 30-60 minute monthly task was producing almost 60% of my income and a further 3 actions (roughly 15% of what I was doing) were producing almost the rest of my Company's revenue.
I then proceeded to workout my living costs and lifestyle costs. It occurred to me within 15 minutes that I could completely eliminate my 50 hour full time management job and still maintain my current existence. So I eliminated 50 hours of work in August 2011.
I focused on the 30-60 minute monthly task and the 3 actions that were producing results for my business (research, marketing and systematization). As a result within 3 months of reading The 4HWW I had eliminated close to 70 hours of non effective time use.
Since August I've had the luxury of using my time for projects that I'm passionate about. Teaching others (coaching), business, learning, golf, writing and a bit of living as well.
So you need to sit down and look at how you allocate your time. What actions (generally 20%) are effectively producing your desired results and can you eliminate or delegate as much of the remaining 80% as possible?
Can you set shorter deadlines for your assignments (tasks) to force yourself to focus on execution and only the bare essentials (Parkinson's Law)? Are you addicted to your phone, social media or email? Is it possible to bundle those tasks and schedule them for a specific time either daily or weekly to avoid dealing with them one at a time. This way you can eliminate the 80% of calls, messages, emails etc from the bundle that aren't important to your results.
If you proceed to follow this formula (80/20) with the fundamental tasks in your life, you are much closer to freedom than 95% of people. Remember to choose only the essential tasks and don't waste the most valuable resource you have (time) before it runs out.

About this Author

If you would like 4 videos showing you how to apply these principles go to http://www.timerichsystem.com/ to get instant access right now.

Article Source: http://EzineArticles.com/6867261

Tuesday, 7 February 2012

What's So Great About an Autoresponder?

On virtually all email systems, there are options for use of an autoresponder. If you are scratching your head, wondering what an autoresponder is, it is a automatic message that is sent to those who your list members, based on WHEN they join. They are a great way to reach out to your new list subscribers consistently, and to leverage your time.
While there are a wide variety of ways they can be used, here are a few that might help you to get started:
  1. Social Media Connection. Encourage people to like your Facebook page, follow you on Twitter, connect with you on LinkedIn, join your circles in Google+, etc.

  2. Products and Services Awareness. Highlight specific products or services that you are part of your offering. Often we have items that we're not currently promoting to our list, but still have great value to our followers. Connecting new leads to a products and services page is a great use of an autoresponder. You never know when this might convert to a sale!

  3. Connection to Valuable Content. Connect new leads with old blog posts that are still of great value. Just because you wrote something six months ago, doesn't mean it's not a great post for someone to read today, share your content again for new followers. Just make sure the ones you select are "evergreen" and not too seasonally focused.

  4. Survey your constituents. You can either set up a full survey in SurveyMonkey, or you can ask a simple question and recommend that followers simply hit reply. This is a great way to get information about what your followers needs are, which can help you when you're developing new products or services.

  5. Get to Know You. If you have an "About.." or "Interview with..." section on your website, you could share some of it and then suggest new sign-ups head to your website to learn more. They may enjoy learning about you, especially if they are really interested in your offerings.

  6. Old Freebies. Make those who've just joined your list feel special by offering them an additional freebie. If you've retired one, send after people have been on your list for a little while, just to let them know that you care, and that they might just get something for nothing from you...everybody loves that possibility.
Assignment: Think of ten different items you could put into autoresponders. Then implement them!
Join Suzanne Moore for a free teleclass: Amazing Outreach with Autoresponders. Register here: http://TheImplementationStation.com/AmazingOutreach
Article Source: http://EzineArticles.com/6840742