Initial Costs

Hey all,

I'm newly registered here but have been reading regularly since way back.

I've been paraplanning for over 10 years (in finance for almost double that) and hold FPFS - up until now I've been employed but feel it may be the right time to look to spread my wings and set up on my own in the new year. I've done a fair bit of research and many great answers are on this forum so I won't cover old ground, but any tips or words of wisdom very much appreciated!

One thing I would like to know as it will dictate when I can actually make the move is what sort of ball park capital would I need to start up? I know I'll need a safety net of at least a few months costs and I'm aiming for about 6 months but can anyone give me an idea of the legal and admin costs involved at the outset? I know this will be very different for everyone but some idea would be great.

Thank you very much for any advice



  • Hi Ted

    Firstly, welcome!

    I'm a relatively new outsourced paraplanner, so have been through the initial costs and the company has been debt free for some time now. I actually set up my company while I was still employed, and did some freelance work for a couple of other outsourced paraplanners to get some money in the bank for the expensive stuff!

    One of the mistakes I made was to appoint an accountant, which blew a massive hole in my finances (I discussed with my wife about three months in that I didn't think I'd be able to pay them; fortunately I had a VAT refund which helped to plug the gap!). I would get a bookkeeper in to begin with, even if you go the Limited Company route, as it will be a lot cheaper. By the time you do need an accountant you will hopefully have sufficient funds to afford one!

    I did this for around 7 months, before I was made redundant, however this just moved my go live date by a month (in fact I was just about to hand in my notice!)

    The expensive stuff was to get the Terms of Business written - the lady I used has moved law firms but I found her really good, and this is probably the most important thing to ensure you get right. I spent a similar amount on my website, as although I haven't generated any business through it, I felt I needed a professional looking website due to the people we deal with (I haven't generated any business as a direct result, but I have had favourable comments from clients and potential clients).

    When I 'went live', I put £5,000 of my own resources into the business, which paid for the ToB and website, and then when I started generating some income I repaid the loan within a few months.

    The first thing you should do though is register with the ICO. You can do this online really easily, and it costs around £40 I think, but you can get a reduction if you pay by direct debit. It's only a small outlay, but very important!

    I hope this gives you a few pointers, but please do feel free to come back and ask any questions or to clarify anything - good luck!

  • Hi Andy

    Thanks so much for your reply, sorry it’s taken me a while to come back. It’s good to have a ball park idea of the amounts involved.

    Unfortunately, my current employment contract explicitly prohibits me from setting up a company while with them so I’m going to need to do a lot of work over a short period of time following going live. My thoughts so far have been to go the Ltd company route but I am weighing this up currently. In any case I will bear in mind your comments regarding using a bookkeeper initially – I wonder if bookkeeping software might be a solution.

    I had actually made a note of the person who did your TOBs from a previous post you made (with thanks) so will see if I can speak to her at the new firm if she’s still doing same work.

    Have looked into a few options regarding website design and do feel that this needs to be done professionally even if not the primary source of business generation. I’m thinking that I will rely heavily on word of mouth and direct marketing to contacts built up over time but want the front of house to look good. May I ask how you’ve generated business?

    Great point regarding the ICO registration thanks, I knew it was something that was needed but not sure I’d have put it to the top of the list. It is now!

    Thanks again for the detailed response, really appreciate it.


  • Hi Ted

    Glad to be of help. Does your company prohibit you from doing anything in addition to your main job, ie could you do it on a self-employed basis to start with? I think my previous job had a non-compete clause, but that was around working with/for/as an adviser; my view was that what I was doing wasn't competing with the business I was working for, so wasn't an issue!

    Bookkeeping: I use Xero for that, but I still have an accountant to take care of the things like VAT returns as I have neither the time nor desire to do it myself. The bookkeeper also covered that when they were working with me, and it was far more cost-effective at the time. Xero is great for keeping everything straight, and if you use a bookkeeper or accountant they will prefer this to a shopping bag full of receipts! Xero also has a handy feature where you can take a picture of your receipt and upload it for reconciling later. (Other packages are available but that's the one I use!). If you set up a limited company you will need one for your annual company returns.

    In terms of generating business, all I can say is that I was really lucky with my first two clients; in the right place at the right time. The first I was a client of theirs, so we already had a professional relationship. The other was a referral, which is the best sort of business!

    I have picked up a couple more clients recently through LinkedIn; but not from direct marketing to people. I am fairly active on there, and an IFA just happened to notice a cheeky post I put in reply to someone else, and another I think it was just being connected and noticing my activity. Other paraplanners use Twitter a lot and get a lot of business that way. I have an account but I can't really get on with it but you may have a more positive experience.

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