Options after being made redundant (kind of)

[Barx]

Good day to one and all.

WARNING: probably a bit of a boring story here.

I'm in a bit of a pickle and trying to find a way out without hindering the rest of the family in much way.

I have technically been made redundant on Tuesday gone with immediate effect. It's rather complicated affair but the company is no longer operating and the workers have been dropped. No options for any redundancy etc. And after 12 years of service, it's leaving a bit of a bitter taste.

Anyways, that aside. I wasn't on bad money and am the sole income for the household. I don't really want the mrs to have to go to work yet for the sake of the kids and we also have very ill members of the family and it means someone is available, basically on-call in case things go south, which it does fairly frequently.

I did bring a lot to the table and earnt my money, being Qualified supervisor for electrical, MCS technical guy and similar for SSAIB. Plus working as electrician and loads of other duties. I think one of the issues is, nobody needs all these skills / duties covering and as such, pay grade drop inline.

Obviously now, the standard sparky money (seems to be about 23 - 25k around here isn't enough to cover the bills and feed us. We don't have any outragous outgoings, but they add up. I've looked at price work available locally and it would cover us but I am doubious about the continuity.

A guy that I have known for a long time has offered a day rate and to keep me busy and he will deal with the fluctuations of price work if that makes sense. This is a good oportunity, but again the money drops slightly shy.

I have just had a little sum come in, nothing worth shouting about but it could help me here. Instead of using to top up the day rate income and then in the future saying "OK, it's run out, now what?" I'm thinking buy a cheapish tester and get insurance (probably going to have to do these 2 anyway) and then get registered with stroma and try to get some additional jobs for myself to top the money up. Be it the odd board change or EICR on a saturday morning. This can then be done as and when needed and technically wont run out.

Does this make any sense or have I got tainted vision? I haven't looked at too many figures yet but I'm hoping something like £120 - 150 insurance (liability and indemnity), £400-500 for a second hand decent tester of Paul Hanlon (Some may know him from ECUK Facey page, £255+vat for stroma. I already have 18th regs, OSG and GN3. So don't think there is too much more I can see that I would need to buy.

Obviously I could be miles out and living in dream world, hence this post. How feasible is this? I have no idea on book keeping / accounts so will have to talk to someone about that.

Any input welcomed,

Cheers

p.s. please reply quickly while I can afford the interenet. LOL

 

[Murdoch]

rule of thumb for being SE, your overheads in total will average monthly costs over the year are around £500

this allows for running costs of your van, but not buying a van

hope this helps

 

[NozSpark]

I was told that you should base your hourly rate on working no more that 40 weeks

This is based on 4wks holiday, 8 bank holidays, a bit of time for illness and a bit of time for lack of work (inc. early darts)

 

[SPECIAL LOCATION]

When I was made redundant and started up self employed back in 1999, I got a few books about running your own business, marketing, bookkeeping etc..

One of the sections was about anyone going from paid employment to self employment and working out costings to maintain your same standard of living.....

It posed the question what happens if you have little or no earnings for a whole month?  Or for two months?

and related numerous factors that will reduce your monthly income..

Quiet/slow spell with little or no new work coming in..

Personal illness, you are physically unable to work..

Vehicle breakdown off the road for multiple days..

Late payment from customers..

Bad weather, can't get to customers or job not able to be completed due to weather..

Hold-ups due to faulty/incorrect/unavailable materials.  including customer changes mind part way through job  and/or  awaiting other trades before you can complete your work..

Holidays - You need a two week summer holiday to recharge!

Close family member or friend has urgent personal needs that you need to help with..

etc..

Individually you can generally ride them without to much of a problem, but if multiple issues arise or they last a bit longer than average, or a few come back-to-back...

What is your back-up plan?

The suggested guidance was if you can save enough money in reserve, to cover all essential monthly outgoing for three months, statistically you can ride out some of the toughest combinations of problems that can trip up a small business.

And..

To maintain the same standard of living covered by your previous earnings, you MUST be charging at least double what you were earning  to allow sufficient to cover overheads and contribute toward the low to negligible earning months.

Guinness

 

[Barx]

When I was made redundant and started up self employed back in 1999, I got a few books about running your own business, marketing, bookkeeping etc..

One of the sections was about anyone going from paid employment to self employment and working out costings to maintain your same standard of living.....

It posed the question what happens if you have little or no earnings for a whole month?  Or for two months?

and related numerous factors that will reduce your monthly income..

Quiet/slow spell with little or no new work coming in..

Personal illness, you are physically unable to work..

Vehicle breakdown off the road for multiple days..

Late payment from customers..

Bad weather, can't get to customers or job not able to be completed due to weather..

Hold-ups due to faulty/incorrect/unavailable materials.  including customer changes mind part way through job  and/or  awaiting other trades before you can complete your work..

Holidays - You need a two week summer holiday to recharge!

Close family member or friend has urgent personal needs that you need to help with..

etc..

Individually you can generally ride them without to much of a problem, but if multiple issues arise or they last a bit longer than average, or a few come back-to-back...

What is your back-up plan?

The suggested guidance was if you can save enough money in reserve, to cover all essential monthly outgoing for three months, statistically you can ride out some of the toughest combinations of problems that can trip up a small business.

And..

To maintain the same standard of living covered by your previous earnings, you MUST be charging at least double what you were earning  to allow sufficient to cover overheads and contribute toward the low to negligible earning months.

Guinness

This is very good info. Though it does worry me a little more. I currently can see a way to cover my bills/food/savings (hols, xmas, insuramce, etc) working mon-fri yet alone save up 3 months lol. Granted this is subbing type work.

 

[Sharpend]

Barx I know that agency is not the best, however for a person with such skills as yourself then sometimes it can lead to a golden egg. 

I had a quiet spell two year ago as I’d come back from working away and opted for a little local agency work, This led to regular work with the firm for a much better negotiated rate and two years later I’m still subbing to them earning as much as I’ve ever earned as I had a skill set that none of their guys had. ????

 

[SPECIAL LOCATION]

This is very good info. Though it does worry me a little more. I currently can see a way to cover my bills/food/savings (hols, xmas, insuramce, etc) working mon-fri yet alone save up 3 months lol. Granted this is subbing type work.

Reality is that you may get a quiet month, but assuming you are half decent at what you do and you set your costings right....

to have a quarter of year (3months) that is difficult should be almost as rare as rocking horse poo!

The underlying point was you need something in reserve, Or access to reserves, that don't hit you with massive interest rates or bank charges etc..

It is all down to managing cash-flow.

You cannot work on the mentality of I'll just bang this months bills on a credit card or loan or overdraft, unless you know you can pay it back off quickly before it becomes another business expense noose around your neck.

i.e. should the poo hit the fan, a family member, or close friend, able to assist with an interest free loan to tide you over for a few quiet weeks, is as useful as you having your own savings..

giving you time to sort yourself out again.

Its all comes back to the "rainy-day" savings account the older generation used to talk about before this modern era of easy quick credit & loans.

As I said that was the guidance in a book from late 1990's of what to aim for...

Newer books may suggests a different approach nowadays.. ?

The reality is you can get by without that level of back-up...  (I do  )

But you must have some back-up funds, 

And you have got to ensure you don't under-sell yourself by forgetting the daily business overheads as well as the obvious job costs.

opcorn

 

[Murdoch]

Being organised is the key for me but this can go horribly wrong when disorganised builders aren't ready for you or call you back earlier than expected.

Regarding cash flow and late payments, careful use of wholesalers credit terms and a credit card can pay dividends. Such as not picking up kit you don't need before the start of the month so you have a decent period before you have to pay.

On bigger jobs I agree terms of invoicing twice per month (half way through the month and at month end ) to keep the cash flowing in.

 

[Sidney]

I would consider agency/contracting work to tide you over until you could build a customer base/reputation. This would keep the cash flow going. I know someone in Peterborough who does national work including telecoms and some government work (schools/NHS etc) if you get stuck?

I'm in a similar position at the minute but I can financially take my time at the moment to relax a little and get some jobs done on the house my wife has been nagging me to do for the last few years... 

 

[Tony S]

I worked for an engineering agency for just three months and really enjoyed myself. With it being a specialist agency the money was reasonable.

 

[Evans Electric]

careful use of wholesalers credit terms and a credit card can pay dividends. Such as not picking up kit you don't need before the start of the month so you have a decent period before you have to pay.

Thats well worth noting .....  I know my wholesalers well enough to  pick up stuff in the last week of a month and say book it out on the 1st of next month .  

 

[Evans Electric]

A guy that I have known for a long time has offered a day rate and to keep me busy and he will deal with the fluctuations of price work if that makes sense. This is a good opportunity, but again the money drops slightly shy.

If this was me  Barx   , I'd go for working with this guy , so continuous money coming in .    I understand there is a drop but as I'm sure you know , the more you are out & about , meeting people ,  chances often pop up .   

DO NOT SIT AT HOME HOPING FOR SOMETHING TO HAPPEN 'COS IT WON'T . 

Just go SE  ,   develop , as you said , some EICRs  etc  on Saturdays  and take it from there .    

I would take this opportunity  to build up my own customer base even if just Domestic  .  I'd say its unlikely you'll get a job as you had before  ....age is another part of the equation .....  I was redundant when the firm went bust ....I was Supervisor / Estimator/ Health & Safety officer at the time .... jobs like that are just not about .... only qualifications  were  Approved Electrician  , so back on the tools ,   no body an old phart  so Self Employed  , buy a van and make the best of it .

No options for any redundancy etc. And after 12 years of service, it's leaving a bit of a bitter taste.

You claim redundancy pay from the Government in cases like this  ...as I did  .    Look online for the  relevant form  . 

I have no idea on book keeping / accounts so will have to talk to someone about that.

Don't worry about this , its not a problem ,  you'll work the first year / put your accounts together / (with our help) to submit the following April . 

Just keep simple Cash Accounting  records , so :-  

1)    Keep all invoices , receipts , petrol chittys,  Vehicle insurance /MOT/  any repairs etc . / Stroma / that meter /    Liability Insurance ( You'll £5  million for industrial /£2million  Domestic. )  

2) Accountancy should cost no more than £200    or submit them yourself  if confident.       I can email you on this , once you sit down & look at it you'll be fine  ,  I won't complicate the thread at this point . 

3)  If you are being paid through the infernal CIS  system  which exists only if you  are coming under the Building trade  for payments , then make sure you get a monthly              statement  for whoever is paying you ...they are obliged to deduct 20% Income Tax   off The Labour Costs Only of your invoice to them .       If this raises it's ugly head  PM me  ...  this ONLY applies to construction work ...NOT direct work in  Commercial /Industrial/ Domestic / Fire Alarms  & Security Alarms .  

     

 

[binky]

take agency work to tide you over until you are set to do your own thing, but remember, a new business takes time to get customers. Local ads seem to work best, sign written van helps a lot, but it takes about 2 years to develope a reputation and good customer base.

 

[Murdoch]

On an extra note ...... remember first impressions really count ......... so be prompt (call if you are going to be late) and do invest in some logo'ed clothing - make sure its stitched logos and decent quality business cards ..................

 

[Sharpend]

You can actually go on a one day course with HMRC for self assessment, oh and it’s free to you, my tax pays for it!! 

 

[Tony S]

The DWP used to do a course on becoming SE. It’s worth asking I they still do.

I don't know i this is of any use https://www.gov.uk/business-support-helpline 

 

[Murdoch]

I would also suggest you look at computer or cloud based packages for estimates, invoices and record keeping - massive time savers and this helps keep you accountants bills down too