oh is self employed and it's not working

[ilovenavy]

Before we met, my oh and the mate he worked with decided as tradesman, they'd be better off going self employed, rather than being employed.

Thing is neither of them know anything about running a business - doing the job, yes, but running....nothing.

In the few years they have been doing it they've been earning the equivalent of about £6 an hour. Yet they charge their customers about £60 for them both an hour. I have no idea where their money goes as technically they have little business overheads.

All their expenses like work vehicle, insurance, fuel and work mobile comes out of their own purse - they don't claim them back/put through the business.

We are at the stage where we are looking to a future and moving in, but the fact that he is in this situation is starting to grate on me. He has no pension and as self employed he has no insurances for if he's sick or anything.

I'm just at a loss what to do??

Sorry, this might be the complete wrong board

Perhaps what your OH and his mate need to do is to sit down with a local accountant, who (for a reasonable fee) will be able to explain to them that many of their business expenses can be offset against their earnings, to leave a reduced figure for their income. Otherwise they could be paying far to much in income tax.

The accountant would also be able to advise them regarding how to go about keeping proper business records, and the best way to separate business and personal expenditure.

There is also the possibility that there might be an advantage in becoming a Limited Company or a Partnership, rather than each being a self-employed person. The accountant could also look at whether or not they would be better off registering for VAT.

I second an accountant to closely look and figures. But combine it with time and motion study. For 2-3 days record what they are doing every 6 minutes, this needs to be 100% honest to work - to see how much watching mate doing the job actually occurs etc.

that must be so frustrating to see! i would definitely tell them to get an accountant. surely they must be stressed seeing how little they make from their business? it's pointless! they need to sort it out now or consider getting a new career!

It is extremely frustrating - especially when his come back is that their business is still new and it is I who knows nothing about business. Surely the idea of taking the step to do your job on a self employed basis is for a good work life balance and chance to earn more??

I think he's scared of losing out on customers by charging more. But people are willing to pay for a service if the job is done right! Could you look on competitors websites or contact them asking for quotes and see what they charge for the same service?

You need some facts really. Such as how many hours per day they're charging for? What are they doing for the rest of the time? How "efficient" are they, such as are they wasting time driving up and down the road all day when they could plan their quotes/jobs/shopping better to reduce travelling time and cost? How much repeat business and referrals are they getting? How many quotes are converted into jobs? Then you could build a picture of what's working and what isn't.

No reason at all why they shouldn't be hitting the ground running and making a decent profit right from the start if they're advertising right, doing the job right, and sucking in referrals and repeat business from happy customers.

By the way, I don't think you've mentioned what kind of tradesmen they are - it may help others to give you advice if we knew whether they were Gasafe plumbers, qualified electricians, decorators, window cleaners or gardeners - "tradesmen" is a very wide description.

Are they filling in tax returns and paying tax??? What a shambles. They should read u on running a small business and everything they're entitled to put through the business as expenses.

There's plenty of info online about setting up a business and filling in tax returns - www.gov.uk/starting-up-a-business/start-with-an-idea - look on the gov.uk website.