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Thread: The Cost

  1. #1
    Join Date
    Aug 2008
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    Wales, UK
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    Default The Cost

    For the self employed in the UK we pay forward our taxes and rarely get rebates. The next 12 instruments I build will pay my tax bill, settle loans and cover the necessary purchase of materials and consumables. My landlord has had a safety check of the premises done and another instrument will pay for the remedial work I am responsible for in my 3 units. It will be summer before I see any profit in the business. This is the cost of doing something very few people get to do. AT least I have heat in my home and workshop. An actor I follow on instagram has no heating in her house and is miserable and depressed because she is living from hand to mouth pursuing her dream.

    Be debt free with $30K in start up money before you consider becoming a bespoke ukulele maker. Even after this and you have made your first few faltering sales and are learning your 'value' in the the shark pool, you will very soon realise that the most important process in the whole cycle of making and selling is banking.

  2. #2
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    May 2010
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    Cairns, Australia
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    Default

    Debt free is first and foremost the most important part of the finances. And that includes being mortgage free.

    Then at a bare minimum 6 months of ready cash on hand for all your living expenses. This is basic financial well being that was taught to me from a very early age from my parents that were always self employed.

    It takes so much pressure off every other aspect of the business, your life, family and mental well being that it changes your outlook on taking on commisions, and "having" to make a sale this week.

    No one who is living this life will ever will tell you its easy to get to this point.

  3. #3
    Join Date
    Feb 2019
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    By far the best avenue to take here in the UK is to set up your business as a Limited Liability Company.
    Col.
    From the UK with a bad case of MIAS.
    Korg PA700, Korg Kross 2, Gibson LP, Fender Jazz Bass,
    + Amps, PA, Boss GT100, mixer.
    Ukes - Kala KA-TEME and Risa ST electric solid body.
    Uke wish list, a Bass, make and model yet to be determined

  4. #4
    Join Date
    Mar 2009
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    Stockton on Tees..North East UK.
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    Default

    My bank manager once told me the the 3 most important things to watch in business is Cash flow, Cash flow, and Cash flow.
    And beware of overtrading.

    Classic Symptoms of Overtrading
    High revenue growth but low gross and operating profit margins.
    Persistent use of a bank overdraft facility.
    Significant increases in the payables days and receivables days ratios.
    Significant increase in the current ratio.
    Very low inventory turnover ratio.
    Low levels of capacity utilisation.
    Last edited by Timbuck; 01-25-2020 at 02:03 AM.
    http://ukulele-innovation.tripod.com ebay i/d squarepeg_3000 Email timmsken@hotmail.com

    If you can believe that moving images and sound, can fly through empty space across the universe and be seen and heard on a box in your living room ?.. then you can believe in anything.

  5. #5
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    Default

    Tell that tom my son - there are very few benefits now to having a limited company.

  6. #6
    Join Date
    May 2015
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    Default

    An understanding girlfriend with a good job that does not have a penchant for new shoes.

  7. #7
    Join Date
    Dec 2019
    Location
    Pacific Inland Empire
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    Default

    Beware of credit too. It will stab you in the back come pay-back time.

  8. #8
    Join Date
    Nov 2019
    Location
    Brenchley, Kent, England
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    Default

    Credit factoring is one of the worst ideas I've seen - giving away a large chunk of profit while losing contact with (and probably alienating) customers.
    Pete Howlett 'Deacon' - low G (That One With The Amazing Back)
    Gold Tone small bodied Tenor resonator - high g
    Kala Tenor resonator - low G

    Also Mark Savoy G melodeon, Andy Norman DG Anglo, Alba & MK whistles, Dave Copley flutes and Jon Swayne bagpipes. Well, keeps me busy.

  9. #9
    Join Date
    Dec 2011
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    Grand Junction, Colorado
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    Default

    I would further advise to any budding luthiers that you get orders (income) before going crazy buying tools, wood etc.
    For if you have no orders (income), you can't claim the tools on tax.

  10. #10
    Join Date
    Apr 2017
    Location
    U.K.
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    Default

    Quote Originally Posted by Timbuck View Post
    My bank manager once told me the the 3 most important things to watch in business is Cash flow, Cash flow, and Cash flow.
    And beware of overtrading.

    Classic Symptoms of Overtrading
    High revenue growth but low gross and operating profit margins.
    Persistent use of a bank overdraft facility.
    Significant increases in the payables days and receivables days ratios.
    Significant increase in the current ratio.
    Very low inventory turnover ratio.
    Low levels of capacity utilisation.
    Some years back a friend ended up with a dominant customer who kept wanting things and was late paying for them. That customer went bust, my friend never got paid for the goods he had supplied and the whole issue nearly made him bankrupt. Beware how you trade.

    Edit. As the economy picked up he became in contact with someone with who he had previously either worked with or for. He gave up his business and went back to employed work where, using un-utilised specialist skills and experience, he earned a lot more and had a more secure income stream. His experience showed me that self employment isn’t always the better option, it all depends on circumstances and what your strengths and weaknesses are.
    Last edited by Graham Greenbag; 01-28-2020 at 08:55 PM.

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