# Starting up my own one man company



## FrM (10 Jul 2007)

Sorry if this has been posted a million times but I'm looking for anyones advice, own personal experiences etc of starting up their own one man business.

I am an I.T consultant at the moment but have got the opportunity to take over 3 sister companies and provide their day to day I.T support. They will be paying a monthly retainer for this which is a great base to start on.

I don't want to be shelling out a fortine on websites etc at the moment but has anyone else went down this road or got hints, tips on what I should do ? Even how to get initial investment.

All information is greatly appreciated.


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## cruchan09 (10 Jul 2007)

Hi FrM, congrats on the big decision to go it alone. I did it about three years ago with a similar type scenario but in a different field. I only lasted for two years as a self employed consultant but that was by choice. Below is my advice based on that experience…….

Decide whether or not you want to be a limited company or a sole trader. There are pros and cons for each, and they are discussed elsewhere on this site. For my part I chose limited company as I wanted a strict separation between me the individual and me the consultant giving advice on behalf of a company. The field I work in is litigious so this was a precaution to limit my personal exposure.

Make sure you have sufficient insurance. You will probably need public liability (PL) and perhaps professional indemnity (PI). PL covers you if you cause an accident in a clients workplace and you are sued. PI covers you if the advice you give is 'poor' and leads to monetary / financial loss for your client and he decides to sue you. PL is relatively cheap, PI can be very expensive. If you have employees you will need employers liability (in case they sue you).

Be strict with withdrawing cash for personal use from the business. Model your cash flow for the first 12 months based upon a fixed salary, business costs and other outgoings. Identify 'bad' months where you may go overdrawn (e.g. when insurance premia are due) and takes steps to address these bad months. What I did was that I assumed a zero cash investment into the business in month one and modelled the first 12 months in this way factoring in all guaranteed work and expected increases in client base into my revenue and I offset this on a cumulative monthly basis against my projected costs. This allowed me to identify the maximum amount that I would become 'overdrawn' before accumulated revenue started to catch up with spend to date and this was the amount that I asked for (and got) from the bank as short term overdraft.

I found NIB and TSB to be the banks that offered me what I asked for in the form of an overdraft readily. AIB refused to extend any money as they said that I should just not pay myself for the first 12 months and therefore remove the need to have an overdraft - not very helpful advice. Be realistic as you will need some form of a salary (unless you have a lot of savings). BOS didn't respond for a couple of months to my submission at which stage I had my overdraft from NIB. Downside is NIB customer service is diabolical. 

Draw up an honest business plan for the first year and a developmental plan for up to 3-5 years and use them to set revenue / customer acquisition targets. Work towards these targets.

If you do a lot of travel and overnights then claim mileage and subsistence from the business. These can help supplement a relatively low salary.

Get a decent accountant, there are some really poor ones out there (a really bad one almost bankrupt my wife’s business by not filing returns and then had the cheek to send her a bill after she had negotiated a settlement with the revenue herself!). I finally settled on my third one.

If you work from home claim money from the business for heating, lighting, telephone, furniture, etc etc etc. - all legal as long as the amounts are not excessive. 

I registered my company name as a .ie and a .com website and purchased a set of website templates on line from an American company for about €40 and used these to develop a simple and cheap but effective website. 

Make sure you get yourself into the golden pages asap, it does pay off.

On your business cards use the back of the card to list your services in more detail.

Try to tie in with similar companies in the same field who can pass on extra work to you or work which doesn't quite fit into their profile but which their customers might ask for. 

If you haven’t worked from home before and you are going to do so be very strict with yourself and doing a full days work.

Finally (I cant believe I have typed all this) don’t sell yourself short. Charge what you think you are worth / what the industry expects. In my experience some companies lose interest if you are too cheap, they assume you provide a substandard service. 

Good luck!

ps one more thing....pay the nice people in revenue on time and the correct amount when they ask.....


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## FrM (10 Jul 2007)

Thanks for that information Cruchan.

Did you say you went back to full time employment after 2 and a half years ?


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## cruchan09 (10 Jul 2007)

Yeah, I went to work for my biggest client. After my contact person left I got his job. Public sector, 32hr per week permanent contract and €90k+ pa, difficult to turn down. Also had to weight up fact that this client was approx. 50% of turnover and could not be sure that the new incumbent would keep using me for consultancy. No regrets though, the job security is nice!


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## euroDilbert (10 Jul 2007)

Lots of good advice there Cruchan09 - however, I partially disagree with one thing you say. A Golden Pages entry is only useful for some types of business. I doubt if it would be worth it for an IT Consultant (maybe I'm wrong though).

I talked to a few others in my line of business, and they get most of their business via the Internet, personal recommendations and some ads in targeted areas. Each area will differ.

eD


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## cruchan09 (11 Jul 2007)

I was sceptical about the goldenpages thing as well as there were over 300 similar companies to mine listed on their website. I put my number in two non dublin directories and I got myself listed in a more specialist section that had fewer companies listed, but I used the slightly bigger entry so that I could give more details on the list of services I offered. The cost of the entries was more than covered by the first client I got and in total I got 5 or 6 jobs from the golden pages. I would agree with euroDilbert though that the vast majortity of clients come from personal recomendations.


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## FrM (11 Jul 2007)

The entry with Golden Pages though can be fairly expensive can it not ? The last time I spoke to them it was near €1000 ?


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## cruchan09 (11 Jul 2007)

I did it two years ago and it was approx. €375 for the slightly larger entry and a free entry in a second directory. I think as the deadline approaches they do better deals. €1,000 is a lot though for a business in its first year. I found out by accident that a good way to advertise for me was to sponsor a four ball in a charity golf tournament. That way I got tax relief on the charity donation, I also got to hand my business card around to a lot of people I would not normally have contact with and I got to bring out clients for a day.


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## FrM (11 Jul 2007)

Sounding more and more promising, now I only have to seal the deal for the initial 3 contracts !

Did anyone buy any of those marketing databases to do mailshots or to get contact details of companies ?


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