[G Griffin]

I don't know but I earn more than I ever did before but never seem to gain much in spending power over my previous job.

Are you still using that Nigerian accountant?

[dazmond]

im spending  about 5 grand a year on expenses.same as dave.

koopmaster i dont think your including all your expenses in your figure(commercial van insurance,road tax,MOT,repairs/parts,fuel etc) plus the cost of van,resin,brushes,poles.

my fuel bill is around £60 a month due to lots of compact work in one area.so roughly £700 a year.

im earning considerably more than i was 5 years ago.itll be £17,000-£18,000 more a year turnover than 5 years ago this year.my 5 year plan has been on target and exceeded my expectations so im a happy chap.time to set another 5 year goal/plan now!

my earning power has increased a lot but my girlfriend and daughter find a way of spending it quickly!

[8weekly]

£2000 is possible if like said you work from home don't have metered water and your round
is close to home.
A water fed pole system shouldn't cost you more than £500 a year over five years less if you go down the
D.I.Y. route.
Poles anything from £30 to x amount a year depending on how hard you are on them. (£30 is for a Harris converted )
Couldn't see it allowing for paid holidays though.

No it isn't. Fuel, insurance & servicing alone will get you close to £2k even if you are trad.

Fuel depends on how much driving you do per day as does servicing.
How much fuel would you use if your round was within a couple of miles of your home ?
How often would you need a service if your only doing a few thousand miles a year ?
Most of my work is less than a mile from home so £500 a year easily covers fuel, I change the oil in
my van once a year £50 mot £30.
Road tax and insurance £600.
Pay a couple of grand for a van and keep it for 4 years' £500 a year.
Im not saying you wouldn't be cutting everything to the bone but its certainly possible.

That's £1,680. Never need tryres, filters, brake pads. So in 4 years your £2k van never goes wrong? Why not just admit you were wrong? 

[SeanK]

£2000 is possible if like said you work from home don't have metered water and your round
is close to home.
A water fed pole system shouldn't cost you more than £500 a year over five years less if you go down the
D.I.Y. route.
Poles anything from £30 to x amount a year depending on how hard you are on them. (£30 is for a Harris converted )
Couldn't see it allowing for paid holidays though.

No it isn't. Fuel, insurance & servicing alone will get you close to £2k even if you are trad.

Fuel depends on how much driving you do per day as does servicing.
How much fuel would you use if your round was within a couple of miles of your home ?
How often would you need a service if your only doing a few thousand miles a year ?
Most of my work is less than a mile from home so £500 a year easily covers fuel, I change the oil in
my van once a year £50 mot £30.
Road tax and insurance £600.
Pay a couple of grand for a van and keep it for 4 years' £500 a year.
Im not saying you wouldn't be cutting everything to the bone but its certainly possible.

That's £1,680. Never need tryres, filters, brake pads. So in 4 years your £2k van never goes wrong? Why not just admit you were wrong? 

Off course anything can go wrong even with a new van, but Koopmaster must not have had this therefore
as he said his expenses where £2000.
If he had run into a few problems then his expenses could have doubled but that doesn't mean its not possible
to do it for £2000.
By the way there are no rights and wrongs when it comes to expenses, a million and one things could mean your
paying double or more in your expenses than me or vice versa.
But don't assume just because you cant achieve  a low expense bill anybody else who can is working them out wrong.

[George P]

I was told years ago by a very successful man that 40% of turnover should be wages, therefore you need to cover another 60% for other things, like expansion, profit, expenses etc

[gary999]

After the wife ,taxman,kids have taken their share im left with
bugger all.Given up worrying about it anymore

[dazmond]

dont forget workwear,wet weather gear,waterproof boots,gloves,stationary(business cards,leaflets,chits,ink/paper for invoices etc.)PL insurance,LPG if you use a gas heater in winter.cloths,detergent,virosol/tfr etc.

it all adds up

[trippyboy]

For me the first £250 in a week is dead money

[Mr.G]

Its the loss of holiday pay and sick pay that makes a big difference when self employed.
I reckon thats worth the best part of 2 months pay a year!

[gary999]

Sick pay you will be lucky in most companies in the private
sector if you get any more than stat sick pay at around £88
per week,you must be off more than 4 days consecutively,doctors
notes yah de yah.

Holiday pay the most i ever had was 25 days and we had to save
three of those for xmas.

Im defo better off,i spend less on fuel travelling,yep there is insurance
wet weather gear i buy once a year, gloves etc  but im only working
a third of the 80 hr week i was doing when i was an employee,i take
time off when i want and i put some extra effort in during autumn i take
all of january off and watch the world go by

Yes it has it downside bad winters etc but im definately happier
and more relaxed and thats what counts most for me

[Window Lickers]

My expenses for the first 3 months of this year are £5700, that includes odd bods 2-3 days a week wages.

[Carl2009]

Another interesting thread. Basically talking about expenses in £ is pointless. Who is doing better, someone spending £10,000 on overheads on a turnover of £100,000, or someone spending £2,000 on a turnover of £10,000?

You need to focus on gross margin and net profit - of each £100 of turnover what % is profit? Don't kid yourself either - overheads are everything that you spend on the business, from wiper blades to that £2 pack of paper for the printer to a new sack of resin. Add up all your overheads (as an example let's say £5650) and subtract from your turnover (say £36000) to get your net profit (£30350). Divide your net profit (£30350) by your turnover (£36000) to get your gross margin as a % figure - in this case it's 84.3%. Your gross margin figure should be going up every year, ideally as a result of decreasing overheads AND increasing turnover. You need to monitor these figures and strive to improve both.

The above should roughly work for most sole traders who don't have any big capital expenditure planned or current, employ or work on an accrual system. Those new to business should also remember:

1. You are "taxed on what you make, not what you take", i.e. you are taxed on profit, not on drawings (the money you take out every month to live on). Your net profit is basically what an employed person's gross annual salary is - i.e. before tax and NI are taken out.
2. Remember the dreaded tax paid "on-account" when you are past your first year and are in profit...: http://www.simplybusiness.co.uk/knowledge/articles/2010/02/2010-02-26-payment-on-account-what-it-is-and-how-to-pay/
3. Just because you spend something on the business doesn't mean it's "free". It's a business expense and only tax deductable, not free. The way to think of it is the cost price to you as an individual is actually around 25% less than you pay at the till.
4. A cashflow is essential - I have a rolling 5 year cashflow that identifies expenses (as much as possible) before they happen.
5. Don't forget Class 4 NI has to be paid, not just tax.
6. An accountant can make your life a lot easier - it's a cost, sure, but it's also less of a ballsache. Just keep a careful record of your takings (window cleaning software does this for you - I use Roundtracker) and keep your receipts in date order and don't hand him a carrier bag full of loose ones - you'll just pay for him to sort them.

Personally speaking with the spreadsheets I have set up I know what my net profit is projected to be as the year progresses, based on what I've taken so far and what I project to come in / go out. I am in the fortunate position to not need to take out everything that i've made (i.e. net profit for the month minus an amount put aside for tax and NI) each month, then twice a year I pay myself a little "bonus", still leaving enough in my business bank account for problems such as a really bad winter, illness, my van needing major work. This way tax and NI is accounted for, the business account has enough working capital, and I get paid what I'm due. It works for me, but I'm not a family man with a mortgage and kids, so I appreciate it might be different for others.

Cheers