STEP ONE: Fundamentals for starting your business
The good news is if you are already a qualified personal trainer you can start earning straightaway and there’s no need for a complex business structure to start charging clients that are ready to pay you!
Of course there are limitations, risks and opportunities with how you approach your business and where you want it go. But fundamentally, if you want to start your business today and earn money you can. You’ll just be doing that as a self-employed person and strictly not as a legal business entity but as a sole trader.
As long as you pay your taxes and declare your earnings, and have a relevant personal trainer qualification, you can earn money as a personal trainer.
You can adopt your business name from day one and trade under that name (your trading name), it doesn’t have to be your actual name. Or you might be thinking that its better for your profile to register your business as a company. And you’ve got the perfect business name that will resonate with your customers and be the next household brand… As a sole trader you don’t have to register the company name with companies house but you can to start the process of protecting it. Check here to see if your chosen business name is available: https://www.duport.co.uk/company-formation/sole_traders.php.
Sole trader responsibilities:
But being a ‘sole-trader’ you are personally responsible for your profits and your losses. When you start to look to protect your personal assets and liability that’s when you consider becoming a limited company or some other legal entity and you might consider an accountant to work out the best trading entity for your circumstances. If you are looking to set up consider your legal responsibilities as set out by HMRC: https://www.gov.uk/set-up-sole-trader
At a minimum you’ll need to:
- keep records of your business’s sales and expenses
- send a Self Assessment tax return every year
- pay Income Tax on your profits and Class 2 and Class 4 National Insurance– use HMRC’s calculator to help you budget for this.
What can you charge as a personal trainer?
What you charge as personal trainer is up to you but you need to understand your qualities and skills in the market place but that’s another blog for another time. You may however, want to check out what type of money you might be earning through Body Focus’s earnings calculator: https://www.body-focus.co.uk/personal-trainer-income-calculator/ to see if this is a career that can sustain you!
Developing a business and going VAT registered
If you’re looking to employ people and earn a bundle then a business might be more appropriate to form a company. There’s pros and cons as to whether start as a sole trader or form a business but a lot of the time it comes down to how much you’re likely to earn. If you earn more than £85k you need to register your business as VAT registered. Or if you plan to buy a lot of VAT products you might be considering becoming a VAT registered company. As such you’ll need to form a company that is registered with companies accounts. Have a director (probably you!) and a company secretary are some of the basics you need to register the company and become a legal entity. As such, you will need to report your accounts to HMRC. Its quite simple to set up a VAT company if you meet the legal criteria and you can do it for as little as £14. Check this out here: https://www.duport.co.uk/company-formation/limited_companies.php for some more of the details on this.
Gaining financial control from day one:
If you have financial control over your money then you will be in more control of your future. Obviously, being paid in cash has its benefits but it is hard to manage money like this. The endless trips to the bank can be time-consuming. Whilst you might have time in the day as a personal trainer, you’ll have lots of other things to do such as build your online profile or sell supplementary products. Consider how to look after your money from day one because they’ll be financial surprises along the way and staying ahead with what’s your money, what’s HMRC’s money and what money your business may unexpectedly need is key.
Tools to make life easier?
Keeping a record of your expenses and invoicing out can be done really easily these days with online accounting packages like Xero.com and Quickbooks.com. Both of these companies have invested heavily to make their software really easy-to-use. And whilst you may employ a book keeper or an accountant its an advantage to know some of the fundamentals of these accounting packages to keep control in your business but also to reduce costs of someone else doing work you can do or a 3rd party system can automate, repeat invoices for you. All time-saving things you’re business is going to need.
XERO have online help which is there and available to get you started, plus its in XERO’s interest to make it work for you, as you’ll be paying them monthly for the different types of accounting you need. And you’ll need them for the life of your business too! You’ll start paying anything from £10 per month up to £50 per month depending on what facilities of theirs that you use; from inventory control to PAYE and scheduling your employees pay.