To think that not everyone is cut out to be a “business owner”

[Ffwithfu]

I’m probably being unreasonable but run a business that supports small business. Over lockdown I’m sorry to say that I’ve seen so many people that have no fucking clue thinking they can “start a business”.
From those who have no skills, to those who have done no actual research into the market. I’m fed up with the world and his wife thinking they can “run a business.

@Eleganz

I dont get annoyed by people ACTUALLY wanting to start businesses. I get annoyed by people looking at us and going "well it looks easy, you're loaded, I should start a business instead of working my bollocks off for someone else." Oh yeah pal, it's so fucking easy, you'll work soooooo much less.

The problem is there are two ways to start a business. One is with a loan or scraping together all you have and then growing it through the sweat of your brow, the other is to start with a nice chunk of capital and just use it to make more money. The latter is easy, that is why you get jokers like Donald Trump making billions.

The latter isn't easy at all. I've seen far too many people start with a shed load of money and lose it all because of bad (stupid) decisions. When there's money in the bank, it's a lot easier to waste it on fancy premises, fancy car(s), employing too many staff/advisors.

The best (in terms of profit) businesses I've worked with have been shoe-string businesses started out from virtually nothing. I.e. the bloke who started messing about with electrical connectors in his garage and ended up selling his business for £20m to an international oil exploration company. Or the husband/wife who started in their spare bedroom with a couple of hundred pounds of baking items they sold on ebay, then rented a unit and made their own website, after husband lost his job due to illness, which turned into a £1.5m p.a. business after 5 years which they then sold. Or the brother/brother in law who started out selling wet fish from the back of a van and ended up supplying sandwiches to the major supermarket chains.

Nothing like having nothing to give you the incentive to make something of yourself, and no, that doesn't mean you need huge sums of cash behind you to make it happen. Organic growth etc can make a pretty good business for the average Joe Public as long as they don't get too blinkered and keep their eyes/ears open for new opportunities.

Our business was initially hard to get off the ground, did very well second and third year and then catastrophe struck and something very serious happened (personally not business related) which wiped out most of our profits. Staff still need to be paid and it made us reevaluate our business at a very difficult period. We adapted and got through that then Covid hit. We’ve survived throughout and are making plans for next year, we have meetings and adapt our business plan every so often to reflect what has happened, both personally and in the climate of our clientele.

Running a business is fucking hard work. And we’ve learnt lots of lessons along the way (including picking a great accountant and what not to do when hiring and firing staff!). We also work in a regulated area requiring specialist contracts. We did learn a lot along the way, and not everyone can or wants to do it.

But I’d always advise them to give it a go. Do the background work and understand what it really means. It’s not for the faint heartened that’s for sure. I’ve gone through our personal highlights and pitfalls with friends who broach the subject of running their own businesses and most importantly tell them to consider those things which would apply in their own fields. A close friend is going to start their own business next year and has really appreciated the advice.

But surely that’s the point of your job OP? Going through the necessities and pointing out what they need to do and advising caution about certain points. If you’re only seeing people who have ideas on the back of a cigarette packet I can understand the frustration but most people have put more thought in than that surely?

Agree with that bad bad bunny! We had enough money to get us through the first couple of months (after registration fees). There wasn’t another option but to make money. Otherwise we’d have had to give it up. That was a very big motivator I can tell you!

The problem is there are two ways to start a business. One is with a loan or scraping together all you have and then growing it through the sweat of your brow, the other is to start with a nice chunk of capital and just use it to make more money.

There are other ways.
You don't always need a lot of capital.

I have had two businesses - neither required more than £50 start up.
I used profits to grow my business, but have never had a need for capital.

I should point out - the people I’m talking about are NOT my customers.
For those who think I’m being unreasonable- I’m talking about those who don’t bother to take our insurance (as they didn’t even consider it), those who didn’t think about paying taxes, those who don’t think about whether they have the appropriate level of skill to do whatever it is they want to offer.

There are a lot of them about!

Of course no one will know everything - but a starting point would at least we bright enough to know what you may have to research.

I had one once who came in with a brilliantly produced business plan, forecasts, projections, branding, business cards, etc. She was a business/economics graduate and the business was an e-commerce site which she was showing would grow massively into a multi million pound enterprise within 3 years at which time she'd sell it for £50 million. I must admit, I was impressed as she'd "ticked all the boxes" for professionalism and must have spent hundreds of hours on drafting it all, researching, etc. Usually, when new clients come in, they're "light" on the numbers which is where we specialise (i.e. forecasts, tax implications, KPIs etc) but she'd done all that.

The only "pages" which were blank were about the product she was selling - the pages on suppliers, customers, products, selling prices, margins etc were all "TBA". At first, I didn't think too much about that as many new clients "anonymise" their business idea in case it's stolen so it's not something we hadn't seen before. She even insisted on a non disclosure agreement with us, which is also pretty unusual as our usual terms of business already include confidentiality which is fundamental to our profession so a NDA isn't really needed, but we sign them anyway to give peace of mind.

Fell at the first hurdle when I asked her what the product was. She basically hadn't a clue! She'd managed to do a full business plan/modelling exercise without knowing what she was going to sell, where she was going to buy it, who her customers were, buying/selling prices, competitors, etc. I was absolutely dumbstruck. She actually thought that sourcing products to sell was the easy bit and that when she started looking for suppliers, it would all fall into place - she'd just find a few wholesalers and take it from there. She completely failed to understand that the market is saturated with people buying from bog-standard wholesalers.

Myself and our CEO took over the running of our organisation three years ago, and we've spent three years sorting out the messes of the old management.

HR, finance, and data protection compliance all particularly shoddy. No reserves. No future financial planning. No ability to forward plan.

And this was a pretty successful business. Turnover of 1m and ten staff. Trouble was, the previous two executive directors just liked to do the things they wanted to, with no regard to the less interesting stuff. It was the plaything of two childish men.

We have had to do so much work to improve the culture and fix the practices, but we now have five months working reserves, a business plan, and a decent HR function.

You can actually get really far in business whilst still being shite at it.

From those who have no skills, to those who have done no actual research into the market

It's the second group who irk me most; skills can be learned, but if there's not even the will to research they're onto a loser before they even begin

I've done it and it's not easy - though the rewards are great - but as with so many things some are suited to it and some simply aren't

Another aspect is just what constitutes "a business". In the UK, the definitions are very blurred. For tax purposes, there is no difference between a freelancer, a self employed person, or what most people would view a "business", i.e. staff, premises, etc. - they're all treated as one and the same for tax, etc. So your "one man" freelancer, window cleaner, cleaner, dentist, etc is effectively the same as your shop or hotel or plumbers with several staff/vehicles. Likewise, you can have a multi million pound enterprise as a sole trader, or a dog walker as a limited company. It's all quite a muddle.

That's one of the reasons why the Govt Covid support has been so poorly targetted, with many "sole traders" being given more money than they need, yet others (up to 3 million) excluded from support because they don't fall into the arbitrary categories/rules due to the confusion. (Even HMRC aren't consistent as limited company directors are self employed for tax credits/UC but employed for tax/nic). It also means that someone with a worthless £10 limited company who is a company director can sign off passports and other official documents, but a sole trader with a multi million pound business can't unless they have a recognised trade/profession.

I admire anyone wanting to start a business but only certain people can make it work. I think you work far harder than being an employee as all responsibility is on you. I'd much rather have a boss than be a boss. That said, it's surprising how many people go into this with the mindset of 'I want to be my own boss' without realising the full implications of that. Businesses run through Facebook are one such example. It baffles me seeing all these cakes/crafts for sale on there and that 'business is booming' then the next thing you know they've put up a huge post saying they had no idea they had to pay taxes/have their kitchen inspected etc and now they're in trouble. Didn't they do any research?

Bella43

But many people do make it work.

According to HMRC 5 million people are self employed in the UK- 15% of the workforce.

@speakout

Bella43

But many people do make it work.

According to HMRC 5 million people are self employed in the UK- 15% of the workforce.

But that includes all those with "sidelines", hobby businesses, etc., where the owners are often just playing at being in business and aren't reliant on it for their income/livelihoods etc.

Approx 1.5 million were excluded from Govt covid support because they didn't meet the criteria, i.e. less than half their income from their self employed profits, etc. so most of their income was from other jobs, pensions, investment income, etc. etc.

A lot of them will also be artificially self employed, i.e. where the employer doesn't want them "on the books" and makes them self employed instead, i.e. van drivers, some chefs, sales agents, etc.

Only a million "businesses" actually employ anyone.

@Ffwithfu

Of course no one will know everything - but a starting point would at least we bright enough to know what you may have to research.

Then that's on them surely?

All of us have to freedom to set up a company and try to make a go of it. Those that aren't capable fail and is reflected in the number of failures every year. Fail to prepare and all that.

So what are these people to you? You intimate that they're not taking out your insurance so get you're trying to sell them something. What's your relationship with these people if they're not your customers?

Genuine questions but no obligation to answer obvs.

Do you end up doing lots of groundwork for nothing?

I’ve had beauty salons for 20 years then set up a niche business selling dog accessories at large fairs in COVID-19 all collapsed so I took a job as a civil servant. I can believe how people think working for themselves is the answer but oh my a lot of businesses are not viable.
In my area they are either women being bankrolled by husbands - hobby business or gay couples - pink pound or inheritance - hobby again. I cannot believe now I am paid for holidays have flexi time and when my colleagues moan about stuff I think wow you really have no idea 🥴

I run what would be considered a successful business - it supports us comfortably. First thing I questioned was 'how do I get customers?' and 'what tax do I have to pay?' - seems pretty reasonable to me.

@whiterabbitsweets I don’t want to say exactly what I do - but I offer a free consultation which is where most of this comes out. That’s why I say these people are not my customers - I don’t work with anyone without a viable business as I don’t want to take money from them.

In terms of why it annoys me - there’s several reasons - none of which are specific to me personally but more generally

• they leave their customers at potential risk
• they undermine business in the same field - either by undercutting market rate (unsustainably) or by just giving whatever the business niche is a bad name,
• they don’t pay the taxes that they should

I sound really down on small business owners and I’m not at all - it’s the people who think “I’ll give that a go” and do so with no real thought.

On a basic level it’s the difference between say an electrician who decides to work for themselves and bother to check tax implications, what insurance they should have etc and one who doesn’t, which would you prefer working in your home? And how would you tell the difference?

@LyndzB sorry I probably didn’t express myself well. Yes it is of course the first Thing you ask yourself.
I’m talking more about when it’s the last thing people ask - after investing in say making a product, a website, everything else - without thinking “hmm where is my market here”.

it's the people who think “I’ll give that a go” and do so with no real thought.

Yeah, those "I'll give that a go" people are the scum of the earth...
Get a grip

@AllTheUsernamesAreAlreadyTaken But how would you feel if that “give it a go” person built your extension and wasn’t insured, or gave you food poisoning, or collapsed with your deposit money etc.

[quote Ffwithfu]@AllTheUsernamesAreAlreadyTaken But how would you feel if that “give it a go” person built your extension and wasn’t insured, or gave you food poisoning, or collapsed with your deposit money etc.[/quote]
Not all people who "give it a go" are criminally negligent. Why are you unable to distinguish them?

I actually think the OP is spreading a lot of negativity.

I had considered becoming self employed for years, but thought that I wasn't capable, didn't have the skills, the confidence, the ability.

Self employment crept up on me, it wasn't a grand business plan, just a way of making a few pounds while I was a SAHM with young children.
Now 17 years later and two sucessful businesses, I wish I had done it earlier- and I wish I knew how easy it would be.

My two businesses overlapped for a while, but I settled on my second one because it was the most lucrative of the two.
If I wasn't doing this I have ideas for a couple of more businesses that I think could make decent money too.

I would urge anyone thinking about setting up a business to give it a go.

Ignore the naysayers.

@Ffwithfu

Thanks and no worries about keeping your exact role private.

I totally get where you're coming from and take back my original YABU

Although I will say, if you're consulting then it's a good job you're there in the first place as it looks like you're an essential part of the process.

Personally I didn't need a huge amount of guidance but there are a great many incubation centres for my industry and also support for startups. There's also a lot of start-up guidance available for anyone thinking about setting up but guess you're looking for something that catches these people before they get to you?

I do think there should be a requirement from the government to have some sort of health check prior to doing any business but sadly business is so variable, from eBay sellers to more formal trades.

Sorry, you were venting justifiably and I've come round 😂. I do stand by some of my previous comments as failure is part of the whole process but agree that you do need a basic grip on the requirements if you're interfacing with others.

@Eleganz

I dont get annoyed by people ACTUALLY wanting to start businesses. I get annoyed by people looking at us and going "well it looks easy, you're loaded, I should start a business instead of working my bollocks off for someone else." Oh yeah pal, it's so fucking easy, you'll work soooooo much less.

The problem is there are two ways to start a business. One is with a loan or scraping together all you have and then growing it through the sweat of your brow, the other is to start with a nice chunk of capital and just use it to make more money. The latter is easy, that is why you get jokers like Donald Trump making billions.

There is a third way, which is what a friend of mine did. He put a card up in the Post Office window. Total initial business outlay: 50p a week. It said:

"Local handyman/decorator, reliable, reasonable rates, anything considered"

He used the tools he'd already got, and had an estate car anyway.

@tinselfest well no that shouldn’t be the total outlay. On top of that there’s public liability insurance, PAT testing of his tools etc.
Am sure your friend is responsible- but this is exactly the sort of thing I mean.