How do you make that jump?

How do you make that jump?

Didn't find your answer?

During the various topics on business premises for accountants, I've often wondered:

How do you make the jump of moving from a small at-home practice to nice shop premises in town?

Is it a case of needing the capital in the first year or two to finance it? Because by moving to a shop you immediately can add another 10-20k onto your overheads, which is a big bite into the profit you are used to making (if indeed it's that much to begin with).

Not that I'm considering the above move - I like the freedom of working at home and don't want to create for myself a 9-5 existence (feel free to correct me if I've got the wrong impression). But I've wondered for a while now how you decide to make that move, and how you actually manage it.

Thanks

Jenni Frost

Replies (16)

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By User deleted
02nd Oct 2007 17:16

For Steven
Steven

I can SO relate to that one - can I ask how you did it!

Did you sell your practice and re-start or simply get rid of clients?

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By User deleted
02nd Oct 2007 17:13

Other costs
The legal costs are pretty minimal.

I shopped around and max was about £400 to review a standard lease.

On serviced offices you dont normally have a lease just a licence to occupy so no legal costs unless you have a desire to pay a solicitor.

Cant really think of any other hidden costs.

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By User deleted
02nd Oct 2007 18:40

Sounds fatastic
Steven

Many thanks.

I can truly see how that works better. So much of my time is absolutey wasted on admin etc. Their are many days when I feel I have done nothing and despite growing the practice profits are unchanged.

Can I ask -

Do you operate from home?

Also do you use a secretary or simply do everything yourself?

What about holiday cover?

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By AnonymousUser
02nd Oct 2007 19:31

Offices etc
Steven and Liz,, what you're saying is what I thought I was aiming for at present, but it just doesn't seem to be happening [efficiency at home]. I'll certainly bear your experiences in mind, as an alternative point of view. I'm so glad I asked this question!!

Nicola, thanks for the info on the legal costs etc - what exactly is included in a serviced office? Business rates? Electricity? Phone line?

Thanks

Jenni
jenni[at]farrantfrost.co.uk

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By User deleted
03rd Oct 2007 10:44

Serviced office
With the serviced offices I had, and looked at, you had to pay a service charge which covered your share of bills oe insurance, business rates etc., but it was only a few pounds on the office I had - less than £20 per month.

The only bills you generally have to pay yourself are phone/internet.

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By AnonymousUser
03rd Oct 2007 13:27

Liz ...
I now work completely from home and do all my own admin. I have been through all of the office configurations i.e. I started from home, moved to Regus 'virtual' solution, had a village high street premises and a serviced office before arriving at current solution. I had a fear (probably justified) in the early years that I would lack credibility if I had a residential address but now everyone knows how I work so I thought I might as well save the money and come clean. I also live on the Isle of Wight and my client base is on the mainland so I have no issues of clients wanting to visit me!

The Regus solution when I started building my client base was fab. I think it was £125 p/m and for that I got their address, their superb reception/telephone answering and an office for £5 per person per hour only (inc coffee & buscuits!) when I needed it. When people phoned I could just say "were at Regus, when do you want to come along?" I would then put the suit and tie on, rush down to Regus, make the meeting room look lived in and wait for my client to arrive in reception. After a while everyone knows you there and the prospective client never knows you are not there permanently! This is a great half way house.

Liz ... I don't have holiday cover but I do take my hols in March / April when I am not busy. I write to everyone beforehand to let them know, set up email away message and answer machine. I now don't even take a mobile away with me. I have never had the slightest grumble from clients.

On working from home ... I don't have kids and my wife leeds a similar working life. We also have two dogs, so this type of work could not suit us better but I appreciate that others have less easy circumstances.

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By User deleted
02nd Oct 2007 13:20

Price
Hi Jenni

Getting a first proper office neednt be very expensive at all. My first office was one room in a serviced office block and cost me £165 per month all in. It really was the best move I ever made. I dont regret it for one moment. I have since moved onwards and upwards.

As a Mum myself I wouldnt even contemplate working at home with a child/children. It is so distracting and in my view not fair on a Mum or the child. Us women can multi task but work and children is difficult. You end up doing one job not propertly. Dont get me at all wrong I am not saying you cant be a Mum and work what I am saying is you cant do both in the home. Even more reason to get out and get that office and some good reliable staff so that you can have the best of both!

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By AnonymousUser
02nd Oct 2007 14:44


Thank you everyone for your great advice. There is a lot of quality food for thought here and I appreciate you all taking the time to share it with me.

Nicola, I like the idea of a low-cost office such as you mentioned, and what you say about children makes perfect sense.

You've all convinced me maybe I need to expand! not til after January though !! ;)

Apart from rent, rates and insurance, are there any other costs involved that I've not thought of? Are legal fees always necessary when taking on a lease/ rent?

Thanks everyone, you're a great bunch of people :)

Jenni
jenni[at]farrantfrost.co.uk

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By AnonymousUser
02nd Oct 2007 14:56

Just to add balance ...
I started as sole practitioner ... expanded ... now back to sole practitioner again. Personally I find the stress attached to having to take responsibility for other peoples work far outweighs any monetary benefit arising. I have worked in industry with 17 reportees but it does not compare to having to face people who trust you with their personal finances and admit that a member of your staff has cost them money through an error.

Ok, I won't be rich this way but I am very very content and that is worth more to me. Just try and make sure that you know yourself and what you want before making that leap!

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By AnonymousUser
02nd Oct 2007 17:22

Liz
I had predominantly taken on bookkeepers / payroll staff, so I simply stopped doing that kind of work. I then streamlined what I do personally so that I now only have meetings one day per week and the other 4 are spent doing chargeable work. The change is phenominal as I believe I have created 25% additional capacity by getting rid of (a) my own inefficiency (b) the time spent monitoring other peoples work or covering for them when they were sick.

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By User deleted
29th Sep 2007 14:45

Bit of a strange question
given that you DON'T want to do it!

But I did it last year - in the end, I bought a residential house on a busy road that would not look out of place as an office. Put in for change of use planning permission. I am now paying a mortgage which is lower than the rent I was looking at taking on. And the value of the house has increased.

And of course it is a big hurdle. It's like the hurdle from running a practice in your spare time to doing it as your main source of income.

I also took on my first employee last year, another big hurdle. Needless to say, last year's results were down.

But this years are well up!

Regarding costs - the rent that my company pays me is £7k p/a, the rates are £800, and I have other costs too, but you can't make an omelette etc...

Regarding the 9-5 thing. When I worked at home, I very often worked evenings. That hasn't changed. I have a laptop, I simply have to plan more when I come home. My offices are in the next village from where I live, it's ½ hour walk or 10 minutes on bike. I also tended to work beyond 5 at home - now I have to finish at about 4.50 to I can close up and catch the post.

I am also perceived better - when I worked from home, a few clients weren't sure whether it was my full time job! I have started getting bigger (and better quality) clients.

And my wife is thrilled now that she's got the bedroom back and the children don't have to share!!!


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By skylarking
29th Sep 2007 15:15

RR is right
You have to look at it strategically.
What you do at present might suit you fine, it did me once upon a time. But what do you want from your business in say, 3-5 years time? Whatever it is, you want to start the ball rolling now or it will never happen. If your business ambition is to have a worker of 1 (you) and the cosiness of working from home, that's fine, but be aware that you are severely limiting your earning potential.

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By AnonymousUser
29th Sep 2007 17:42

ambition
On the one hand, I'm ambitious and am tempted at expanding. Though I'd rather earn modestly and have more freedom than be loaded and a slave to the grind.

On the other hand, in 3-5 years time, I want to have kids! What on earth happens to my business then?! Maybe an expanded practice is something necessary in that case. Or maybe unsustainable. I'm thinking aloud ;)

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By skylarking
30th Sep 2007 11:49

Jenni, you are almost there
You say you don't want to be a slave, but unless you expand that is exactly what you will be. You will have a business that functions in direct proportion to the amount of effort that you personally put in. If you stop working, the income dries up.

If you expand and then want to have kids you have a number of options open to you - delegate more, recruit someone, sell all or part of your business. Options are more limited if you stay as you are. Remember that when you expand you are not only looking to increase your income, but your wealth. You are building a client portfolio that has value in the marketplace.

Often the only question that arises once the leap has been made is, 'why didn't I do it sooner?'

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By User deleted
30th Sep 2007 20:09

From Andy's comments
Jenni, it would probably be useful for you to read the E-Myth.

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Stephen Quay
By squay
28th Sep 2007 14:32

Jumping Into The Unknown
I worked from home as a sole practitioner in our rural village for 20 years. I hogged, I mean, I shared the dining room and had client files everywhere - files in the office, archive files in the garage and caravan. Then a local farmer decided to ditch his dairy herd and convert his beautiful brick and flint barns into a small professional business park - all in the same village. It was a "no brainer".

I leased a small modern office over two years ago and never looked back. I now have all my files, furniture and equipment in one place and productivity has increased. Clients visit me at my office instead of at home which has increased my perceived professionalism. Turnover increased much more than the costs for some reason. This may be due to being less distracted and being able to focus more away from home. It's nice to be able to leave the work spread out at the end of the day, go home and carry on the next.

Rent and service charges are approx £1000 per quarter and £45 pm rates. I have four times the space I had at home. Being vat registered helps to minimise costs as vat is charged on the rent and service charges.

I consider myself very lucky. I am surrounded by beautiful Dorset countryside and could walk to work (but don't yet). My wife's happy as she has her dining room back.

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