It may be that you are interested in either setting up a business of your own, as a sole trader, or in partnership, with others. Alternatively, you may consider setting up a Limited Company which makes you a company Director. The title of Director sounds a lot grander than it is in reality and there will be numerous obligations on you, but this option can offer some tax benefits, depending on how you decide to pay yourself, and some additional protection against your personal assets. It’s quite simple to set up a Limited company and can take no more than an hour online and for a lot less than you probably thought.
Working for yourself and having no line-manager may be something that you are attracted to and will be in stark contrast to your police service career. Fitting your business around family commitments and gaining an improved life/work balance (as opposed to work/life, which suggests the former to be more important) than you may have been used to is definitely worth some consideration. You won’t necessarily work less hours, but you are more likely to be able to work when it suits you and take time out when you need to for things like the school run, events, holidays and training etc.
Setting up in Business
If running a business and being your own boss is something you have a desire to do next in your working life, there are a number of things that you will need to consider and steps to take to enable you to get things up and running. This guide is intended to provide you with some thoughts and ideas as to what you need to be thinking about and doing in order to get started.
There are various options to consider as to the type of business you want to create. You could be a sole trader, Limited Company, partnership or one of the less common choices. Whichever you choose, they each have their own nuances and specific rules in terms of how they are set up and run.
The first thing you need, if you don’t have one already, is a business idea. Your business idea is about you crystallising your thoughts and deciding exactly what it is that you are going to sell in order to generate an income. You may wish to sell products that you can make or buy, or you may wish to sell services, which could be your own personal time or you could take people on and send them out to provide the service on your behalf. Whatever you decide to do, there are a number of steps to go through depending on the type of business you wish to run.
This is the most straightforward business to set up and run. It is basically you setting up a business on your own, with you being the actual business, although you can still give it a name e.g. Tom Smith Plumbing.
A partnership is very similar to operating as a sole trader, except there will be more than one person, each having a share of the profits/losses and risk.
This tends to be the least risky option in terms of exposing your personal wealth, as your risk is limited to that amount which you invest into the company which could include any personal guarantees you may have given if you obtained finance.
A Limited Company is a separate entity from those who create it and is treated as such, including legally. The individual or group of individuals who form the company can be appointed as Directors with responsibility for running and managing the company. The Directors and anyone that the Directors decide, may also hold shares in the company, which are used to determine the percentage of profits they receive.
There are some variations on the above four main business types that people may set up and it’s always worth taking professional advice if you are unsure, but the vast majority of start-up businesses fall into one of the above types.
Government guidance on setting up a Limited company can be found here: https://www.gov.uk/limited-company-formation/overview