I’ve gained a load of new followers this week. Hello! So lovely to see you over here. For the who are new (which is the majority) one of the threads running through this blog is a exploration of how easy it is to start up an online creative business from scratch, and from a very small initial financial outlay. I had been experiencing quite a lot of anxiety at work and was looking for ways to reduce my hours and put at least some of my working efforts into my own creative projects.
As someone who has always worked for someone else, I have no previous experience in business, so am learning as I go along what is possible, what is difficult, what is confusing. I’m taking a social sciences approach to the research, reading books and talking to people. This week I’ve been getting myself snarled up in the finances side of things. At the moment I’m not making any money, so I’m not too worried about the confusions here, but there is a lot of confusion. I’ve been reading this book ‘Refreshing simple finance for Business’ by Emily Coltman,which is very helpful, and I have learned the following;
Running a tiny business on my own which brings in at the moment very little money (nothing at all) means I can set myself up as a sole trader. This means I don’t have register as a limited company at companies house, or get an accountant. It does mean I have to register my self for tax purposes after the end of the tax year in which I started the Magpie, and will need to do a self assessment, pay tax on my income, and probably some extra national insurance. So far, so clear.
However, this book, along with others, advises that while you can probably use your own bank account, it’s better to have a separate one to keep you business transactions separate from your personal ones which will make the end of year accounting much easier. This is where I hit problems. Most basic current accounts don’t let you use them for ‘business purposes’. So I looked at ‘Start up’ business accounts, and there are several that will allow you to bank with them for free for the first 18-24 months while you are getting up and running. However to apply for one of those you need to give an estimate of your anticipated annual turn over (um…) and have a business plan (should probably have thought about one of these) and you need some tax reference numbers that I don’t understand (possibly don’t have yet). So I’m going to need to go to a bank and talk to someone about what I need to do. I will let you know how I get on.