Starting out...

[davisc02]

Please be gentle....

 

Myself and my business partner have a small online business and part of it is to cut keys, we have a Silca Rekord, Unocode 399 and a Mancuna and have been doing this a few years now. This business is basically run partly by my business partners wife and also by us after our normal jobs in the evening.

My business partner has completely had enough of daytime job and has found a shop in a superb location for around £800 a month and really wants to go for it. I actually think it would be a good move for him but I know these things are never as easy as you think. Can anyone give me pointers to what we would need for a shoe repair/key cutting shop and an idea of the costs involved.

 

Thanks in advance.

[Mick Friend]

OUCH really

have you costed

rates

telephone

heating

lighting

divided by the open hours and plus rent then see how much an hour you need to stand still.

Key cutting what a £5 a key?

how much to drive punters your way - and I know nuffin about shoes - I shut my shop 15-20 years ago best move ever.

[Simes]

We started out nearly 5 years ago and have built a successful business. We too have a prime out of town location on a retail park.

 

Very difficult to gauge how successful your business will be, but best advice is don't under-estimate your costs. It's the little things that add up. Insurance, pats testing, fire extinguishers, servicing, repairs, printing, as well as the obvious materials. Very important to include in your projections saving to replace or upgrade equipment and also tax! Then there is the question of Vat registration. Do you anticipate needing to do that straight away?

 

Starting our own business was the best thing I ever did though

[davisc02]

Hi,

 

Thanks for the replies. Simes we are already VAT registered and we would have the shop under the same ltd company so some of the costs you have mentioned we already have. The shop is definately in a great location but I think my business partner is just worried about giving up a depressing but secure job to spending out and then not having enough coming in to cover what he was earning. I suppose it all comes down to having to take a risk every now and then but just wanted to gauge people opinions.... it sounds like you made a good move!!

 

Thanks

[Simes]

Hi,

 

Thanks for the replies. Simes we are already VAT registered and we would have the shop under the same ltd company so some of the costs you have mentioned we already have. The shop is definately in a great location but I think my business partner is just worried about giving up a depressing but secure job to spending out and then not having enough coming in to cover what he was earning. I suppose it all comes down to having to take a risk every now and then but just wanted to gauge people opinions.... it sounds like you made a good move!!

 

Thanks

 

Yep! Was a big risk though. Gave up a good job that paid well with paid holidays, sick pay, expenses etc (financial services). Now I'm earning more for about 30% less hours. Result!

[Mick Friend]

is there no way you can open while the job remains for a short while I was lucky I had shift work and an idiot in the shop for when I was working

[Fast Fix Elgin]

is there no way you can open while the job remains for a short while I was lucky I had shift work and an idiot in the shop for when I was working

Eh...... an idiot in the shop might be better to shut the shop that have a idiot in it ruining all your good work

 

Thing is you must...MUST have the investment behind you before you go ahead, if you go into this thing on a shoestring(eh eh) you will struggle.

it will take a long time to build up our skill level, if your in a good location and get busy right off without the right training it will end in tears

 

Good luck

[davisc02]

Thanks for the replies. Elgin, we have built up enough cash from the current business but as you say its the training and knowledge which I am unsure of. As I said on the key cutting and business side I am pretty confident but just worried about not having enough knowledge for the other bits of the business. We are going to have a look insde the shop tonight and take it from there.

[Fast Fix Elgin]

What other services you going for

Shoe repairs

Watch repairs

Engraving

All of these services will take a long time to master, I pity anyone who starts a business in this industry without at least 2 years knowledge, good knowledge

 

Lets do some simple sums

Wages 25k (based on 25% of gross)

Rent 9.6k

rates 3k

stock 20k (based on 20% of gross)

Utilitys 2.5k

Advertising/Stationary 2k

Legal/Accounting/VAT 10k (based on10% vat in vat out)

Machines/ongoing yearly investment ?

 

So I am thinking turnover of 100k is needed, are you or your partner up to working in a shop that has to make 100k, if your partner is going to do all the work he will get cheesed off very very soon.

 

1 last thing, in my expience partnerships do not work...DO NOT DO IT for the sake of your friendship

[Count Muppet]

Would it really be worth all the stress, long hours, no holiday or sick pay, no pension contributions or other perks etc.

All for just 25k?

Surely you would be better off working for someone else?

[completelocks]

Lets do some simple sums

Wages 25k (based on 25% of gross)

Rent 9.6k

rates 3k

stock 20k (based on 20% of gross)

Utilitys 2.5k

Advertising/Stationary 2k

Legal/Accounting/VAT 10k (based on10% vat in vat out)

Machines/ongoing yearly investment ?

 

 

You can't really apply figures to anything other than your own business. None of them apply to mine, everyone is different. I don't pay business rates for example, and my rent is 4.7k

 

Every business/location is different. I say go for it, but as long as you have the money behind you as someone above said... I think Mick was a bit negative with first comment, unless I read it the wrong way.

[Mick Friend]

MAybe I was but I see perhaps 20 locksmiths a month fold because they did not do a business plan and bought gear they would never need, how many adverts on here

used key machine 5 months old - Car kit selling at 75% of its original cost etc etc

so If I made someone stop and think maybe I saved their marriage, sanity and bank balance - because the moment it goes tits up the 'partner' will stat off

[marky1]

if you have a shoe repairs and key cutting in same shop and you vat reg why dont your husband(partner sell the key cutting side to you and he keeps the shoe repairs you will need to open to bank accounts shoe side is called one name keys another name its a little complicated to get that going but you have 2 seperate business under 1 roof and neither make enough to break the vat threshold whereas if its 1 business then it does

hope that makes sense and yes its perfectley leagel as long as the 2 are kept seperate with 2 bank accounts

[gsc]

Shame about all the negative comments. I would have thought we need to keep this industry alive. Yes it will be expensive but if you're young and have the drive go for it. You didn't say what area you are.

[StevenB]

if you have a shoe repairs and key cutting in same shop and you vat reg why dont your husband(partner sell the key cutting side to you and he keeps the shoe repairs you will need to open to bank accounts shoe side is called one name keys another name its a little complicated to get that going but you have 2 seperate business under 1 roof and neither make enough to break the vat threshold whereas if its 1 business then it does

hope that makes sense and yes its perfectley leagel as long as the 2 are kept seperate with 2 bank accounts

 

It may be technically legal, but I asked my accountant about this very suggestion.

His advice was that if HMRC believe that you are trying to avoid VAT, they are going to be much more interested & likely to investigate your affairs.

Equally, 2 separate businesses run under one roof immediately doubles some of your overheads (accountants fees) so needs careful consideration & calculation to make sure it's the right thing to do.

[Simes]

if you have a shoe repairs and key cutting in same shop and you vat reg why dont your husband(partner sell the key cutting side to you and he keeps the shoe repairs you will need to open to bank accounts shoe side is called one name keys another name its a little complicated to get that going but you have 2 seperate business under 1 roof and neither make enough to break the vat threshold whereas if its 1 business then it does

hope that makes sense and yes its perfectley leagel as long as the 2 are kept seperate with 2 bank accounts

 

It may be technically legal, but I asked my accountant about this very suggestion.

His advice was that if HMRC believe that you are trying to avoid VAT, they are going to be much more interested & likely to investigate your affairs.

Equally, 2 separate businesses run under one roof immediately doubles some of your overheads (accountants fees) so needs careful consideration & calculation to make sure it's the right thing to do.

 

Having spent nearly 20 years in financial services I agree. Very risky strategy trying to avoid VAT registration. Seen many a business landed with massive tax bills of 10's of thousands. Just not worth the risk.