What choice would you make?

[arc88]

After some advice here, been dragging my heels making a decision, but the time has come.

Currently I am self employed working for a company on a continual basis, they are happy with me and I am happy there. The money isn't great for self employed, but I'm confident I could ask for something more reasonable and be given it.

However, I've been considering starting my own company with a friend, but I keep having doubts. He has got a contract waiting for us, which will fill up most of the week and bring in close to what I earn now, plus has alot of contacts. So we would definately have plenty of work. However, I think I would be doing most of the work, as he doesn't test or do the technical stuff which our main contract will consist of. I would also be dealing with the NIC and could see myself dealing with invoices, customers etc. If this work was for myself only I would do it and be happy, but would you guys go into it with someone else who won't be too much help other than bringing in the work?

If I don't take this chance now I may not ever have another, and I haven't got too much to loose as I'm self employed and have most of my tools, van etc already. In my shoes, would you be willing to pick up most of the slack for your chance to run your own business?

 

[stef]

What exactly is you friends input into this co-operation? I would demand 2/3 of the money if I was you.

 

[arc88]

Well, the main input being that he has this contract as it's come through family, and also has contacts in the right place, another giving us a decent chunk of work which may lead to more regular stuff. Has own tools, van etc and will be working too, but I just feel that anything not straight forward or that requires thinking will either be down to me, or result in alot of phone calls. I don't mind helping on the phone, but it won't be one or two times in a day...

Sort of my fault in already saying I'd go half on everything, but I could review that having looked into it more. Not sure how that would go down though.

 

[topquark]

As you're working for your current employer on a self employed basis, what's the problem? You are already self employed, so that's not the issue. Could your potential business partner undertake the work you currently do for your existing client? How sure are you of the contract he has and his ability to find future work?

Reading between the lines, it sounds like you don't entirely trust your friend.

 

[stef]

Hi arc88, it will be exactly as you fear. Getting contracts is easier than fullfilling them. What sort of work os it if I may ask? Domestic, commercial or industrial or everythin? The trouble is with industrial work it can be tricky in more than one way and you need a buddy you can rely on.

 

[Adam W]

If the other guy isn't going to be doing I&T and office work, he can be doing the installation work instead, or something else. If the other guy is bringing in the work you still need him to run the business - you could go it alone and take 100% of the money, but you don't need me to tell you what 100% of nothing is.
At the same time working to support a lazy person is never much fun.

 

[SW1970]

If you are going into business with him, make sure the arrangement is in writing with all aspects covered. What if there's only work for one? What happens if one guy wants to leave etc. What happens if you fall out. What happens if one guy messes something up and costs the business loads etc. Are you ready for all of that?

 

[arc88]

topquark - We're both working for the same person, may be able to do little bits for them. I'm pretty confident in the contract and I'm not worried about work, as we wouldn't need much after the main contract, plus I could always sub for a couple of people in the gaps. I do trust him, but just feel I'd be working harder and longer for no benefit.

Stef - It's domestic work only.

Adam W - Trouble is, I've got the knowledge for the work and the testing abilities so I'd be needed on site, so I'd probably be doing most of it. This is what's holding me back.

 

[topquark]

Then you need to have a "frank and open" discussion about share ownership in the new business (if it's to be limited, which I would suggest...means you won't get left "holding the baby" for the suppliers bills etc).

Maybe he will agree something like a 60/40 split in your favour.

 

[arc88]

Then you need to have a "frank and open" discussion about share ownership in the new business (if it's to be limited, which I would suggest...means you won't get left "holding the baby" for the suppliers bills etc).

Maybe he will agree something like a 60/40 split in your favour.

I appreciate all the input so far, and I think that's the best idea to be completey honest with my concerns and to get something written to make sure it's all above board. We've signed for NIC and payed initial payment already and just got the sheet through, I think the thought of the inspection is making me think twice!

Out of interest, do you know what's involed to be limited? May go this route if it's not too much harder/exspensive.

 

[topquark]

Register with companies house. You'll need to produce (unaudited for small company) annual accounts and file an annual return (£14 payment to tell companies house about shareholders and business address (even if it hasn't changed)). You'll also need a separate business bank account.

There are company creation agents that will do it for you from as little as £50 quid (some include a bank account). Be wary of buying an already set up company, as you'll inherit their old credit history (which may be bad).

 

[oldtimer]

ok first thing you could be breaking the law with HMRC and so could the guy that hires you the definition of SE is having 3 sources of income if you have one then HMRC say you are avoiding PAYE & NI .

Second your friend might be ok to go for a beer with but to depend on him for a living you need to ask is this pub talk or is he and more importantly you committed so if you have problems getting him out of his bed in the morning then forget it.

Third are you telling me that you are self employed and only have one source of income then my friend you need a wake up call because you should have been exploring avenues from day one not when you think its going peetong.

So standing outside looking in my opinion is you need to get a move on plus can you get yourself out your bed in the morning if the answer is no then go get a job

 

[Adam W]

Apart from generating leads what will this other guy be bringing to the table? In all honesty he sounds like a dead weight, which no new business needs.
I suppose you could either work as 'spark and mate' (paid accordingly) until you feel he is up to speed enough to work on his own, or go it alone and pay him commission for his leads and pay him an hourly rate as a 'mate' if you need him on the bigger jobs.

 

[alarm man]

the other lad could be good for a partnership if his sole aim is to bring in the work,he seems more of a salesman who could help out on the tools,but if he does have the contacts then he's worth his weight in gold,you can be the best spark around but if you have no work its means nowt,on that basis you have nothing to lose if he keeps bringing in the work you could add another spark to the ranks and let him bring the work in.you know him so only you can make that call

 

[1shortcircuit]

the other lad could be good for a partnership if his sole aim is to bring in the work,he seems more of a salesman who could help out on the tools,but if he does have the contacts then he's worth his weight in gold,you can be the best spark around but if you have no work its means nowt,on that basis you have nothing to lose if he keeps bringing in the work you could add another spark to the ranks and let him bring the work in.you know him so only you can make that call

That is very true unless he's all talk and no walk

It's crazy how many people I know in various trades but 99% of my work comes through my own effort, advertising, word of mouth.

I personally would never enter a partnership, I wanted to work for myself for exactly that reason. Too many stories about describing how one partner took all the debt and the other cleared off with the EX, Y and Zed :thumbsup

If you have the desire go it alone.