Last year I finished as a sole trader and set up a limited company. It was something I had been meaning to do for a while but it would incur several complexities that I was not ready for at the time. When business picked up at the end of the year, I decided to take the plunge and go for it.
I read a lot of information regarding running a limited company and set everything up myself. I like to know what I’m getting into with these things so I didn’t mind all the reading. One of the advantages with a limited company is limited liability. If things go south with client work as a sole trader, my personal funds would have been liable. With a limited company, it’s a separate entity and I am protected.
So, 3 months in and it’s all looking pretty good.
I have subscribed to QuickBooks for my bookkeeping and payroll, and use the Business Payments integration for automatically syncing my Stripe transactions (which is really cool!). I set up a business account with Starling Bank and that’s been going great so far. Unfortunately, the card was sent to my UK address and I don’t want to ship it to SEA so I’m just paying for physical expenses with my account and then reimbursing. I have even set up a pension!
As a consultant, my expenses are very straightforward so it’s really easy to keep track of them. My income bookkeeping is automated, apart from the quick invoice I would have to create anyway. I’m currently in the process of hiring an accountant to take a look over my books and file my reports when they are due.
I have recently been trialling out moving away from an hourly rate and moving towards a mixed project-based/value-based pricing. Hourly rate is notoriously bad, and doesn’t scale well. Project-based pricing makes it feel more like a service, instead of renting a human. Value-based pricing allows me to make money based upon my client making more money from my work. A simple example here would be server costs. If I can reduce the server costs, with no degradation in performance, I take X months worth of cost savings.
I recently heard the phrase “Finder, Keeper, Doer”. It stuck with me and I’ve been trying to apply this to business. When I start working, I do tasks to find new clients – whether it’s emailing interested parties, tweeting about my work or promoting myself. After that, I “keep” my clients by sending them messages with updates or questions. After that, I do the work. By doing these three things, it means I’m not neglecting a certain aspect of my business.
I’ve also been looking into taking on some freelancers to work with. Some of my clients have expressed a desire for development or design work. It’s not necessarily an area I deal with but they ask me because they trust me. Hiring some people would allow me to move from being a one-man-band to an agency. Still… early days yet!
So in abrupt conclusion, the first 3 months have gone well and I’m excited for the next.