For the first time in my working career I am attempting to be self-sufficient and self-reliant in terms of financing the wellbeing of my family and me. Its daunting …. scary in-fact.
I have always been a paid employee of medium sized to large multi-national companies. I have strived to perform to my best abilities to justify collecting my salary at the end of the month.
I did not need to consider such things as ensuring that I am paying the correct amount of Tax and National Insurance; what about a separate business account, and how to I advertise my business? On an even more base level, how do I set-up a business??
These are aspects I now need to consider and plan for, as should others that are thinking of setting-out on their own.
In summary, the steps I have undertaken so far in setting-up the business are as follows:
- Receive training from Business Wales in setting-up a new business
- Receive funding from Careers Wales for re-training activities
- Undertaken those re-training activities, namely social media marketing and outdoor First Aid & Instructor training
- Scouted & taken photos of outcrops
- Prepared presentation material as teaching aids
- Made Risk Assessments of each outcrop for Health & Safety purposes
Fortunately, one day shortly before being made redundant from Shell I was reading an edition of the monthly free newsletter from Newport City Council. A significant section of the newspaper was focused on defining the support, provided by the Council, to individuals wanting to set-up a business for the very first time. One of the items referred to a suite of training courses offered by Business Wales (Development Agency of the Welsh Government) that aims to give new entrants the necessary background and support to start a business for the first time.
For a number of years previously I had been thinking of what my future could involve following the end of my Oil & Gas career. Except in a few favoured instances a career in the Oil & Gas industry ends in the late 50’s or early 60’s; there are very few old people in the industry.
I was in Australia attending an industry conference in the year 2007 when an Indonesian friend of mine said that he too was already thinking of what he could do after retirement from Shell. His idea was to take tourists on trips to explain the geology of the island of Bali.
I thought to myself that that was a practical and sensible business idea and I immediately translated Bali to South Wales. I know that there are some world-class outcrops of Carboniferous, Triassic and Jurassic rocks along the south coast of South Wales and that combined with my local knowledge and decades of experience as a geologist seemed a valid option for me to consider.
Key Message 1 is don’t be afraid to adapt someone else’s business idea. Shape the idea to your environment. Standing on the shoulders of giants is OK to do.
I was hoping to initiate the idea at the age of 59 but redundancy at the age of 55 has brought implementation of the idea forward. Hence, I took the bull by the horns and contacted Business Wales.
I attended an initial one-day workshop organised by Business Wales named “Taking the Plunge” in February 2017. The aim of this workshop was to summarise the process of setting-up a new business for new entrants to self-employment. At the end of the one-day one should be able to assess whether self-employment is for you or not. The module covered aspects such as how to do a self-evaluation in terms of assessing if self-employment if for you and how to construct an action plan. The module also summarised how to finance your business and to know what legal constraints will impact your business together with becoming aware of your Tax and National Insurance commitments. I strongly recommend that you attend an equivalent workshop in your home area as it will explain the foundations of setting-up in business.
Should you wish to learn more about how to get started on your own Business Wales offer a series of other modules targeting individual aspects in a bit more detail.
Modules offered by Business Wales for new business start-ups
I attended the Starting-Up, Sizing Up the Market, Winning and Keeping Customers and Pricing for Profits modules.
A significant component of the process of setting-up a business is the compilation of a fully researched and realistic business plan. Firstly, you have to make an honest assessment of whether working for yourself is right for you; the plus-side is that you potentially have the capacity to earn more money as its your business. You also have more control over work-life balance (in theory) and you have the chance of trying-out that big idea. In my case its all about taking the next step following redundancy. The downsides are that success or failure of the business is your responsibility together with facing the unknown (future).
Although you have a good idea for a new business simply having that idea is insufficient to directly equate to success. Constructing a business plan forces you to put your thoughts on paper in a logical order. It is effectively a map of how you expect your business to operate over the first year or two and will cover aspects such as identifying the Unique Selling Point (USP) of the business, how you will do your market research (on competitors), what marketing strategies you will deploy, finding whatever finances are required to get the business going and how you will operate the business, either as a Sole-Trader, as a Limited Company or in Partnership.
When acting as a Sole-Trader your business can operate its finances through either your personal bank account or, a business account, and you can take profit directly as its earned. Essentially, your personal and business income streams combine into one in terms of calculation of Income Tax. The downside however is that you are liable for any debts the business may incur.
Conversely, setting-up a Limited Company means registering your business with Companies House (in the UK at least), and the business is a separate entity requiring its own business bank account. You become an employee of the business and therefore you receive a salary from which you pay Income Tax and National Insurance via PAYE. Laws on book-keeping and tax returns for Limited Companies are strict and a tax return for the business MUST be submitted every year. You will therefore most likely have to employ a Tax Consultant to submit your tax returns.
I have chosen to operate as a Sole Trader for two reasons: (1) because of the small scale of the business, (2) because it is a much simpler way of operating in terms of book-keeping and accounting when such things are unfamiliar. I can take whatever profit the business makes with that income is added to my other income streams; I simply make a simple payment for Income Tax and National Insurance at the end of the tax year.
My Unique Selling Point I defined as being that I provide guided geological field trips to outcrops 6 days a week whereas competitors provide field excursions generally on a once a month basis.
My approach to evaluating market demand for my business idea was to construct a questionnaire consisting of 10 questions and subsequently utilising the Survey Monkey application to post the survey on a number of tourism orientated forums/groups on Facebook, LinkedIn etc. I received a total of 90 responses and it was clear that the majority of those respondents were interested in attending geological field trips when in Wales on vacation.
As for an advertising strategy, I will advertise my GeoTours business in a number of Oil & Gas industry journals together with placing adverts on tourist websites such as VisitWales.com and VisitSouthWales.com. Similarly, I will utilise Facebook to advertise the business too.
Key Message 2 is force yourself to put your ideas down on paper in a structured way in the form of a Business Plan (USP, market research, finances, business structure). It will highlight short-comings that you can fix which will only help you in the long-run
I have made a lot of effort into trying to quantify the likely demand and thence cash flow for the business. This has not been easy as it requires me estimating items that have not yet happened; basically, it is a thumb-suck on how the business may perform but one grounded in realistic projections of demand, pricing, effects of seasonality and impact of advertising.
The starting point I made was to make a Sales Estimate taking into account estimated numbers of customers paying for the field trips I offer, at the price per person I set and then further influenced by the seasonality of the weather; business during the short days of the winter months is expected to be minimal. Then on-top of that I have to take into account the variation in tides as there will be a number of days in succession when high tides that make access to the outcrops unsafe coincide with day-time hours.
Following the sales estimate, the really hard-work of estimating a Cash-Flow for the business ensued. A Cash-Flow document estimates the income per month (including loans and grants) minus all the out-goings incurred by the business; such out-goings include the purchase of printers, safety equipment, software and IT expenses, and travel expenses. This ultimately provides a Net Cash-Flow estimation on a monthly basis. This is an important step in business planning as it allows you to estimate when income will be greater or lesser from the business thereby allowing you to make forward plans of when to implement things such as purchases and advertising campaigns.
During the course of attending the Taking the Plunge work-shop Business Wales mentioned the possibility being eligible for up to £1,500 Re-Act funds for re-training provided by Careers Wales. I subsequently attended an interview with a careers advisor at Career Wales during which support was provided to me in preparing a re-training proposal for re-training funding. This proposal was subsequently submitted to Careers Wales for approval. I am glad to say that my proposed re-training budget was approved.
Summary of the ReAct initiative provided by CareersWales
With the help of the careers advisor at Careers Wales I identified the following aspects on which to utilise the budget; firstly, it was clear that I needed familiarisation is all aspects of digital marketing together with gaining certified First-Aid training specific to outdoor activity. Careers Wales further advised that achieving professional certification in Teaching for outdoor activities would add support to my business. I agreed that that was a good idea.
Between Careers Wales and I we identified the following two training providers:
- Marketing tom media to provide familiarisation in digital marketing & website design
- RCTraining to provide First-Aid and Outdoor Instructor training
At the time of writing this blog the digital media training provided by Marketing Tom Media comprising three one-day courses involving Digital Marketing, Email Marketing and WordPress web design have been completed. The First-Aid for outdoor activities training (RCTraining) has been completed and the Level 3 Teacher training is over 50% completed.
Key Message 3 is find-out what resources are available with local government and or your Council in terms of help with re-training
I am periodically updating my Business Plan to keep it current as training modules are completed and key milestones in my understanding of setting-up in business are achieved.
Key Message 4 is keep your business plan up-to-date and relevant based on what you learn along the way
On a more direct front I have spent significant time scouting all the various outcrops and localities to visit during the course of field trips. During those visits, I have taken numerous photographs of the outcrops which I have used to construct presentation materials to aid me in explaining the geology.
I have also made separate and dedicated visits to all the same localities purely to make Risk Assessments of potential hazards at the outcrops. This has involved assessing the probability of slip and trip incidents, incidents due to tidal fluctuations and freak waves and the likelihood of rock falls from unstable cliffs. Things to do to mitigate these risks are also suggested.
What remains to be instigated include the opening of a business bank account, the finalisation of the South Wales GeoTours website, the creation of a Twitter account and the placing of advertisements. The aim is to start trading and taking of my first groups in mid-to-late March 2018.
Exciting times indeed.