Setting up your own business can be a big leap – choosing the right time for you personally and financially. Whilst many startups need little or no investment, some may require initial funds to get started – perhaps for equipment or some money set aside as security while things get going. Here, our client shares their story on how the lead up to redundancy gave a kick start to figuring out their big move.

For many of us, the events of 2020 changed the way we work. For me, being furloughed during the pandemic came as a shock, with uncertainties about my income and future, the fact I was forced into some much-needed time off from my stressful job became a stress in itself.

Unable to work and having to ‘stay at home’, did however, give me a period of reflection – time and space to actually stop and think. Outside of the home-schooling and stir craziness, realisation hit me – I’d been unhappy in my job for a long time, the extent to which was starting to affect my mental wellbeing and home life. There had to be something else, a career I’d be more passionate about without the burnout.

But what did I really want to do with my life?

I’d been in the banking industry for more years than I care to mention – my salary was ok but it wasn’t my dream job. I stayed because I simply became complacent. Since childhood, like many I’d have loved a career in football – while my footballing days were over, I realised this was my passion – this is the industry I wanted to be in.

How could I start a new career? Especially with a mortgage to pay and a family to provide for?

I spiralled into a brainstorming frenzy. Friends joked I was having a mid-life crisis, my partner concerned I might hastily quit my permanent job and if I’d had a Financial Advisor I’m sure they’d have winced and shaken their head at some of my madcap business ideas that followed!

Enlisting the help of a career coach helped me to hone in on these ideas and identify my goals. I was excited by the potential, but feeling as if it was still beyond my reach. For my idea to work, I needed funds for the initial costs, and for this to work for my family, I needed security.

It soon came to the end of my furlough and I was lucky to be able to return to my position at the bank for a while, but my heart wasn’t in it. The possibilities of setting up my own business felt as if they were slipping away – I gave up a little and opted for the easier route – to stay where I was.

The workplace had changed and roles within my department needed redefining, I had an inkling it was coming, but hadn’t felt prepared for what came next…Redundancy. In some ways I felt a relief, but with overwhelming concern for my future it was a worrying time.

After the initial shock, and once my redundancy package was confirmed, I started to see the positives – all I could think about was setting up my business. I am thankful for having the time to set out my goals, and this situation meant I had enough savings to allow for the risk I was about to take.

What happened next?

Of course, after seeking business advice, making a business plan and doing my research, my next step was speaking to an accountant to find out how I go about setting up a business and what type of structure I could go for. I was feeling a little overwhelmed – with so much information out there, I found that speaking with someone in the know gave me peace of mind. The very same day I had a limited company formed and was looking into domains to secure my business name – things were getting real!

I used my redundancy money to invest into my new Limited company. Ensuring I’d set this up first, I was able to put funds into my new business bank account, so that anything I bought for the company was recorded properly. My accountant (yes you’ve guessed it, it was Integro Accounting) talked me through how this works with my ltd company ‘paying me back’ once it has the profits, and how I could do this in the most beneficial way to me given that my redundancy pay had already pushed me into the higher rate tax band. They talked me through my responsibilities as the Director of a limited company, including submitting personal tax returns, company accounts and corporation tax returns – while I thought I had a grip on this, you don’t know what you don’t know – and I found paying an accountant to manage this on my behalf really did take a load off.

How’s it going now?

With many hurdles, it certainly hasn’t been an easy ride, but I’m pleased to say I have just completed my first year of trading and have broken even! Having paid off initial equipment costs I’m looking forward to a profitable second year. Redundancy can be a kick in the teeth, but it can also provide you with the opportunity you’ve been waiting for…

We thank our client for sharing their journey and hope this story provides a positive story for those in the same position. If you are thinking of setting up your own business and would like to talk through your options, our team of accountants are here to help, call today on 01242 504510. Perhaps you’ve already decided to form a limited company – find out about our same day formation service.