Girlfriend wants to open a salon, need some advice please!

[RL_Essex]

Hi guys and gals, I'm helping my girlfriend do some research on setting up her own salon and found this website... it's great! It seems to have a lot of knowledgable people so I'm hoping us newcomers can get some help and advice :lol:

She has been qualified about 4 years now, and is currently manager of the salon she works in with a good client base, and we feel the potential to attract a decent amount of clients through the doors.

The first question I had, for you other salon owners out there, would you reccommend setting up as a sole trader or a limited company and why?

She doesnt own a house or really have any other personal assets apart from a car so I was wondering whether becoming a sole trader and having unlimited liabilty is risky in this situation?

And finally, are there any other tips any one can give to make sure all the basics are covered?

Thanks in advance for any help or advice!

Ross :green:

 

[Princess*laura]

Hi guys and gals, I'm helping my girlfriend do some research on setting up her own salon and found this website... it's great! It seems to have a lot of knowledgable people so I'm hoping us newcomers can get some help and advice :lol:

She has been qualified about 4 years now, and is currently manager of the salon she works in with a good client base, and we feel the potential to attract a decent amount of clients through the doors.

The first question I had, for you other salon owners out there, would you reccommend setting up as a sole trader or a limited company and why?

She doesnt own a house or really have any other personal assets apart from a car so I was wondering whether becoming a sole trader and having unlimited liabilty is risky in this situation?

And finally, are there any other tips any one can give to make sure all the basics are covered?

Thanks in advance for any help or advice!

Ross :green:

Limited everytime if you can! I would never set up as a sole trader, i just wouldnt feel very secure.

 

[Ruth Mills]

There can also be tax advantages of trading as a limited company too, e.g. as a director, you are able to pay any profits to yourself as dividends on any shareholding you have in the company. This can be more tax efficient than taking a larger salary with the additional tax and NI (although the company does have to pay corporation tax on any dividends taken, and you may find you have an additional Self Assessment liability of 32.5% tax on any dividends that take your income above the higher rate tax threshold). Best thing to do is to get a good accountant!
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[RL_Essex]

Thanks for the quick replies ladies! Ok so it looks like Limited is the best option, so will look into that some more. But if she did set up as a sole trader and it went wrong, she doesnt have any assets that could be taken, so does this mean bankruptcy?

With regards to funding the initial start up, how do most people go about doing this?
I guess having no assets to put up for security is going to make it difficult to get a loan. I'm not too clued up on the grants available, but I'm sure i've heard that under 25s and particularly women can get grants to encourage more participation in business.

 

[SusanEvian]

More importantly is Location Location Location, and getting new clients. You say she works in a salon, there will most probably a clause placed in if she leaves, regarding current clients. I am not saying she would try to take these clients but the last thing you want is a law suite.

So clients will have to be fresh, do you have a particular location in mind? have you seen a premises?

Where is Essex would you want this? what town? what's the competition like? what can you offer they dont? what do they offer you cant!!!!

Just a few things to look at.


Su x

 

[Ruth Mills]

I guess having no assets to put up for security is going to make it difficult to get a loan. I'm not too clued up on the grants available, but I'm sure i've heard that under 25s and particularly women can get grants to encourage more participation in business.

Yes, one of the places you could try for grants is the Prince's Trust, Home

 

[The Pink Orange]

Hi guys and gals, I'm helping my girlfriend do some research on setting up her own salon and found this website... it's great! It seems to have a lot of knowledgable people so I'm hoping us newcomers can get some help and advice :lol:

She has been qualified about 4 years now, and is currently manager of the salon she works in with a good client base, and we feel the potential to attract a decent amount of clients through the doors.

The first question I had, for you other salon owners out there, would you reccommend setting up as a sole trader or a limited company and why?

She doesnt own a house or really have any other personal assets apart from a car so I was wondering whether becoming a sole trader and having unlimited liabilty is risky in this situation?

And finally, are there any other tips any one can give to make sure all the basics are covered?

Thanks in advance for any help or advice!

Ross :green:

Hi,

I am just starting up myself...I am a sole trader...the reason for this is as I am new to this the paperwork is more simple! you can become a limited company at any time.

I have found the Business link web site very helpfull...and I am being funded by the Princes Trust they are fab! and provide a lot of support...I done a 2 day course with them which covers marketing and advertising on 1 day and accounts and a talk by Mr inland revenue! they cover both sole trader and ltd company, on day 2.

You could also try NWES who are similar to the princes trust. Good luck with you plans.

Sara

 

[Curly Bamboo]

Hi guys and gals, I'm helping my girlfriend do some research on setting up her own salon and found this website... it's great! It seems to have a lot of knowledgable people so I'm hoping us newcomers can get some help and advice :lol:

She has been qualified about 4 years now, and is currently manager of the salon she works in with a good client base, and we feel the potential to attract a decent amount of clients through the doors.

The first question I had, for you other salon owners out there, would you reccommend setting up as a sole trader or a limited company and why?

She doesnt own a house or really have any other personal assets apart from a car so I was wondering whether becoming a sole trader and having unlimited liabilty is risky in this situation?

And finally, are there any other tips any one can give to make sure all the basics are covered?

Thanks in advance for any help or advice!

Ross :green:

There are tax advantages in both sole trader and Limited Company. Depends on what your forecast of revenue and profit will be and if you are taking out loans/leases. You can start off as sole trader and change to limited company. Best advice is to speak to an accountant but they will ask for a financial forecast of your proposed business so they can offer the best advice.

Two reputable accountants have told me its more tax effective to be sole trader until you make about £36K profit. However this does depend on your circumstances.

 

[Jessica Rabbit]

Hi,

I am just starting up myself...I am a sole trader...the reason for this is as I am new to this the paperwork is more simple! you can become a limited company at any time.

I have found the Business link web site very helpfull...and I am being funded by the Princes Trust they are fab! and provide a lot of support...I done a 2 day course with them which covers marketing and advertising on 1 day and accounts and a talk by Mr inland revenue! they cover both sole trader and ltd company, on day 2.

You could also try NWES who are similar to the princes trust. Good luck with you plans.


Hi Sara

You said the princes trust is funding you to start up your buisness.... Do you need to provide any capital yourself or do they provide it all for you??? Is the courses they provide for business and accounts ect any good??

Thanks

Tracy x

 

[The Pink Orange]

Hi,

I am just starting up myself...I am a sole trader...the reason for this is as I am new to this the paperwork is more simple! you can become a limited company at any time.

I have found the Business link web site very helpfull...and I am being funded by the Princes Trust they are fab! and provide a lot of support...I done a 2 day course with them which covers marketing and advertising on 1 day and accounts and a talk by Mr inland revenue! they cover both sole trader and ltd company, on day 2.

You could also try NWES who are similar to the princes trust. Good luck with you plans.


Hi Sara

You said the princes trust is funding you to start up your buisness.... Do you need to provide any capital yourself or do they provide it all for you??? Is the courses they provide for business and accounts ect any good??

Thanks

Tracy x

Hi,

I found the course really helpfull, However I would attend before you start writing your business plan to get the most out of it. I was at the very end of the process when I did it.

With regards to loan amounts and personal investment, it would be best to contact them directly. I used the contact form on the web site to receive all the information to start with. I personally didn't need to invest capital from any other source.

I hope this helps, If you would like to know more about the process PM me, good luck