How Much Does it Cost to Set up a Small Business?

Do you want to know how much it costs to set up a small business in the UK?

The total cost will depend on the industry.

Below is our guide to setting up a small roofing business whilst on a tight budget.

Below you will find a list of expenses you should expect to incur when setting up and running your sole trader business for the first year.

We’ve kept the cost to a minimum by hunting around for the lowest prices, so this is just a researched guide:

1 – Transport

You’ll need a van to run a small business and from experience, we know that the bigger it is, the better.

Transit box vans and tippers are popular choices for roofers, we suggest a transit box van with a long or medium wheel base for extra storage space.

If you are not a VAT registered business then you won’t be able to claim the VAT back from the taxman. Therefore, it’s best to purchase a second-hand vehicle from a private non-vat seller rather than a vat registered trade seller.

Cost: from £2800.00

Ford Transit on sale at Auto Trader in June 2017

Alternative Option – Use your car and a small telescopic ladder when visiting a customer for quotes and hire a van as when you need it.

2 – Roof Rack

A used heavy duty roof rack is perfect for storing ladders, ridge ladders and scaffold boards on top of the van to maximise the available space inside the vehicle.

Start your search on Ebay, you’ll be amazed at how many roof racks are on sale.

Cost: from £125.00 

 

3 – Ladders

You’re not much use to a homeowner if you can’t access the roof.

I always carried a 3metre triple extension ladder in the van for day-to-day stuff and a longer 4metre triple on the roof for hard to reach places. Anything above that and I would be looking to hire a suitable ladder and just add it to the customer’s quote.

Cost: £135.00 and £185.00 respectively (new from Ladders UK Direct)

 

4 – Ridge Ladders

A 4metre double extension ridge ladder will extend to 6.5metres which is enough for most domestic situations.

Cost: £170.00 (new from Ladders UK Direct)

 

5 – Access Equipment

Aluminium towers and an Easi-dec system are usually enough to provide access to a roof and edge protection for most minor repairs.

Obviously for larger projects a professional scaffold company could be used.

While an Easi-dec system is very expensive when purchased new, they do occasionally appear on Ebay at more reasonable prices:

Screenshot from Ebay in June 2017 – 5.5 metre high Easi-dec system

Boss scaffold towers are always on sale on Ebay and there’s plenty of choice regarding dimensions and extras.

Below is a Boss tower, double width, 2.5metres long and 8 metres high, complete with toe boards and stabilisers:

Boss scaffold set for less than a grand

6 – Business Logo

Your business logo doesn’t need to cost a fortune.

Do some searches on Google Images and find around ten logos you like, then choose a colour scheme, then head over to Fiverr where you’ll find plenty of people that will design a logo for you from £5.00.

Tip: the more examples and specifics you can give them, the more likely you are to be happy with the logo.

Even if it takes a few attempts before you get a logo you like, it’s still much cheaper than a traditional logo designer.

7 – Clothing

Wearing clothes that have the company logo stitched onto the material is a must. It makes the business appear much more professional and trustworthy.

Polo shirts cost around £11.00 each including embroidery while hard wearing trousers cost from £35.00. Hi-vis vests cost from £10.00 and jackets from £25.00

Wear Your Logo and Workwear Express are good places to start.

Cost: one year’s worth of clothing for two people – £350.00

 

8 – Business Cards and Flyers

Business cards are a must, flyers are optional but are handy to push through letterboxes of neighbouring properties.

Expect to pay around £150.00 for a stash of cards and flyers, including a simple design.

Start by exploring Vista Print or Instant Print

 

9 – Advertising Boards

Free standing advertising boards are cheap, easy to assemble and can help to increase enquiries.

Cost: Expect to pay around £70.00 including a printed panel. Start your search at Discount Displays.

10 – Website

There are four types of website to consider:

  1. a simple website
  2. a simple website with a few “landing pages” that are targeted to specific aspects of your business (ie flat roofs, roofline, emergency repairs etc)
  3. a simple website with  landing pages and a separate blog where you can create additional content yourself
  4. a site that includes a payment system so your customers can login and pay their invoice

We suggest that at a minimum, you have a site created where you have some landing pages and can create blog posts. These could be; comments from customers, before and after photos of your work, case studies, updates about your company etc. If you can afford it, get a payment system included as well.

Cost – £500 for a 6-page site with a blog where you can create additional pages yourself.

 

Alternative Option: Just create a simple website with some basic details and put your customer comments, reviews and photos etc onto social platforms such as Facebook and Twitter etc.

11 – Advertising

We have already calculated a price for flyers, business cards and an advertising board.

Below is a price guide for one year’s worth of advertising. We suggest a spend of around £2000 for the first year, this can be a mixture of:

Checkatrade£750 per year (approx – they don’t list their prices anymore)

Which? Trusted Trader £700 per year

Rated People £15 per month + purchase job leads as when your diary permits

Local newspapers and web directories – £600 per year

Google Adwords – As required to fill your diary, these ads drive visitors from the search engine to landing pages on your site so they need to be very specific (flat roof, storm repairs, roofline etc). The cost is on a “per click” basis, so only use as needed.

Sub contract – for the first year, it’s worth building a relationship with a larger local roofing firm and doing some work for them on a sub contract basis, just to fill the diary when you aren’t busy.

It’s worth remembering that as the business grows, so will the word of mouth and repeat customers. It’s not unusual for the first year’s advertising cost to be the highest. Services like Checkatrade work best when you have lots of reviews, so the first few months might be slow but things should pick up with time.

 

12 – Vehicle Signage

While a full van wrap can cost several thousands of pounds, having your logo, brief description and contact details placed on 4 sides of a van will cost anywhere from £300 – £700.

A recent article on the telegraph newspaper suggested that, in a city centre, a van could be seen up to 3000 times per hour.

Van signage is perhaps the best way get your name out there.

Van signage from Kall Kwik (Farnham Surrey)

13 – Software

Google offers free (or nearly free with cheap storage) online cloud services that include:

  • create documents such as quotations, invoices and receipts that can be printed or accessed via email link
  • spreadsheets so you can record your expenses and turnover
  • create slideshows
  • email that is linked to your website, so your visitors can use an email address such as “contact@yourroofingcompany.co.uk”
  • online storage for photo albums so you can share images with your customers via email link

This service is a popular alternative to Microsoft Office.

Cost: free or £2.00 per month for plenty of storage space. See Google Docs here.

14 – Insurance

Public liability insurance isn’t expensive for sole traders but the price goes up if you have employees or use a source of heat such as a gas torch or heat gun.

Expect to pay around £200 per person for liability insurance

(tip: by default most insurance policies have a 10 metre working height limit, double check your policy doesn’t)

The cost of van insurance will vary and depends on these factors:

  • type of van
  • your age
  • location
  • where the van is kept overnight
  • your driving history/claims
  • level of insurance
  • whether you want tool and equipment cover

I paid £375 for my last third party fire and theft insurance policy but I was 36 and didn’t have any claims to declare.

15 – Waste Carriers Licence

If you transport waste from the customers home to your yard, home or waste disposal centre, you’ll need a waste carriers licence.

Failure to purchase this licence may result in a fine of up to £5000.

Cost: £154.00 for a three-year licence.

The Total Cost?

To set up a small roofing business for a sole trader, you should expect to outlay around £10,000 to £11,000 in the first year.

This figure includes most of the running costs for the first year and equipment such as access towers that’ll last for many years to come.

Of course, you can spend much more if you want to.

You could also spend less by hiring equipment as required rather than purchasing everything upfront.

What Sort of Return Can You Expect?

Back in 2007 during the economic recession, I set up a small roofing business specialising in domestic repairs and maintenance such as; moss clearance, gutter repairs, tile repairs, flat roof repairs, cement work such as hip, ridge and valley runs etc.

I didn’t have any business experience whatsoever, I had been fully employed by another firm prior to setting up this business.

The business was based in Hampshire.

With only myself and one part-time employee who was at college two days a week, my small business managed a turnover of £75,000, that was mostly from small repairs and maintenance. Not bad considering other firms were going out of business due to the recession.

The next year, I was turning over £100,000 and the rest is history as they say.

So while £10,000 may sound like a lot of money, a roofing business can yield a good income, certainly much more than working as an employed person or even a sub-contractor.

The first year is the hardest as the learning curve is steep and you won’t have any regular or repeat customers to rely on.

Don’t Forget:

  1. While the value of equipment and vehicles will reduce over time, even old vans, ladders and towers will have some resale value.
  2. If you register for VAT within four years of purchasing a van, scaffold set or ladder etc you can claim back some of the VAT. See this VAT guide for more details.
  3. While £10,000 is a lot of money, this is a business expense, so it will help to reduce your tax bill.

What’s NOT Included in Our Cost Guide?

We didn’t include a cost for any of these:

  • Training inc health and safety courses.
  • Tools and sundries such as rubble bags, sheets, shovels or tubs and buckets etc.
  • Accountancy fees – if you keep good records of all your purchases and income then completing a sole trader’s tax return is easy. Expect to pay around £150 for some to do it for you.
  • Limited company setup fees, we assume you’re a sole trader.
  • Computers and printers as we assume you already have them.
  • Computer anti-virus, which you’ll need if you store personal details from your customers.
  • Stationary such as paper, pens, envelopes, inkjet cartridges etc.

Expenses You Can Claim to Reduce Your Tax Bill

We’ve created a handy guide that lists all the expenses you can claim to reduce your tax bill.

Explore our expenses guide here.

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