Starting up your own business can seem daunting but it is actually quite straight forward. Just remember being your own boss and working for yourself is fantastic and allows you more freedom than a conventional 9-5. You can work as hard or as little as you feel you want to, setting your own hours and fees.
Listed below are some considerations that you will need to be aware of when setting up your own business.
Sole Trader or Limited Company
Setting up as a sole trader is relatively straightforward and easy to do. You will need to inform the HMRC that you are trading and you must complete a self-assessment tax return form every year to declare your earnings upon which you will pay tax on the profits as well as National Insurance Contributions. You may need the help of an accountant to do this for you but it is quite easy to do yourself and there are many apps now available that can help you do this. In the United States of America you would need to inform the IRS.
To begin with, it may be better for you to be a sole trader but if your company expands dramatically, you may well want to become a limited company. Setting up as a limited company is a little more complicated as you’ll need to register your company with Companies House after which, you will receive a Certificate of Incorporation detailing when your company was formed and its number. This can be done online, as can setting up as a sole trader. There is in-depth guidance on how to do this on their website.
You will need to keep clear and accurate records of your earnings and expenditure which means all receipts must be kept for any spending in relation to your business and invoices should be raised for each makeup job that you are employed to do. You can easily find invoice templates online and a simple spreadsheet is useful to record your income and outgoings. You will find it much easier to complete your self-assessment tax returns by being methodical in your record keeping.
As a sole trader, you will need Public Liability Insurance but this is not too expensive. It protects you from claims if a client has had an allergic reaction to the makeup you use, you damaged a bride’s dress or someone tripped over a hairdryer cord or your makeup kit and damaged themselves.
It all sounds rather formal but it paves the way for a successful and thriving career if it’s set up correctly from the start!