Lots of different questions have come in from those reading my column this month… I’ve ensured the answers can be applied widely to all sorts of business ideas!
I want to set up a dog walking business and dog day care however I only want to oversee the business side - I feel overwhelmed and not sure where to start?
When you think about the launch of any business, it is easy to feel overwhelmed. Start by imagining where you would like you and the business to be in three to four years. What are your hopes and dreams? Once you have set these – you have the horizon point you are aiming for.
Before you go any further, you need to carefully research your market. Is there the demand for your business idea in the area? What is the competition? Is there good access to outdoor space for exercising your dogs or will you need to drive them to more open countryside? Do you intend to care for them at your home, or rent space? There will be a long list of questions for which you need well-researched answers. Look online for how similar companies in other towns and cities operate.
Now thinking about your background, list all the skills you already have for running your nascent business – then list all those you don’t have. The latter are skills you will have to buy in – this means you will need to have a higher turnover than if you were doing everything yourself, which is how many start-ups begin. By understanding what you can/will do, and what you are not able to do you can start to formulate the structure of the company and how your first 18-month outgoings might look.
Because you intend only to do the business management, finding and retaining reliable, trustworthy staff to exercise and interact with the dogs will be key. Be inventive around how you look for, employ and work with your team. Part-time workers could include stay-at-home parents, students, or those looking for extra cash, meaning you may need only one or two full-timers.
By unpacking the business methodically and carefully working out each aspect, you will create a list of all the things you need to know, understand and do in the right order reducing that feeling of being overwhelmed. Good luck!
I want to buy a second property as a business investment to rent out - should I start a limited company to effectively run this or will I then be subject to capital gains tax if I sell the property at a later date?
I am not an expert on buy-to-let property, so I strongly advise you to get expert advice on this.
By buying a buy-to-let property as a limited company, you would not pay capital gains tax on it when you sell, but would be liable for corporation tax just as you would with any company.
You need to be very careful, however, if you have already purchased the property as an individual and are now looking to move it into a limited company. You will have to pay stamp duty on its sale to the limited company. And if it is not your primary residence, you as an individual will also have capital gains tax to pay on the sale if it has increased in price beyond the annual CGT allowance (currently £11,700pa).
I really want to earn more money outside of my day job but I don't know if I should start a side hustle - what is your advice to how I can look into if I have any additional skills?
So many people in the UK do earn extra cash by running small businesses on the side. It can be fun, allows you to develop other interests and means you meet new people. And there are so many different things you could do… It really comes down to listing out what you are interested in, and what skills you have already or could develop.
You will be much happier working the extra hours if it’s something you really love doing. It could be gardening, book-keeping, catering or running a pattern-cutting class. Think through what it is you would find interesting in giving up your free time to do. Other than just earning money.
Then list out the skills you already have. They can be soft skills as well as practical skills. Are you fluent in conversational Polish, do you know how to bake/decorate cakes, are you a whizz at bike maintenance. The skills can be really varied so draw up as wide a list as possible. Then think about what people might pay you for, and ask whether it would be advisable/essential to get some training or a qualification. For example, if you want to teach evening yoga classes, you need to ensure you are properly trained – just being good at yoga is not sufficient.
Before you commit to starting, research the market and whether there is enough interest in what you’d like to offer. Send a questionnaire out to friends, or do some research in the local neighbourhood. And remember – it is better to start slowly, allowing it to grow as you learn, rather than going full throttle, using up all your spare time and feeling exhausted at the end of month one.
I want to expand my marketing business without taking on staff - is this possible?
Yes it is, but first you need to ask yourself what you mean by ‘expand’. Do you want to have more clients, offer more services, or are you really wanting to bring in higher revenues? Once you have identified what you are looking to do, there are so many different routes to take.
If you would like to offer more services, you can use freelance staff to do the work. This means you only pay them when you need them against an agreed contract, with clear deliverables. You handle the client relationship, with them undertaking the work.
It might be that you would like to offer more services to your clients, thereby bringing in larger fees. If you don’t want to bring in other staff, what other skills do you have that you can turn into new services? Or could you learn additional skills through additional training on a short course or at night school?
Another great way of expanding the revenues of your business is to look at new ways of being paid, in addition to your fees. If you look at the brief your client has given you, it is likely they will have set you some targets they wanted your work to achieve. If you outperform these significantly, ask them for a performance related bonus on top of your fees. Or if you’ve managed to recruit well over the target subscribers to a new service, ask them for a share of the lifetime value of those additional clients. It is much easier for clients to share future potential revenues, than paying out of their pockets now. And it also shows them you have faith in what you do. But ensure you feature these additional revenue structures in your credentials and contract with clients so they understand you are looking at these from the outset.
Erica’s new book Simple Tips, Smart Ideas : Build a Bigger, Better Business is out now. Full of her usual easy-to-use advice, lots of case studies, quick tips, diagrams and innovative ways to think about growing your business – its 288 full colour pages will help you transform your business. Available to order from Amazon and all other good bookshops.