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Assets – business essentials, kit and more
When you start your business, you will need to invest in the ‘tools of the trade’ or business essentials.
These items become assets to the business. You must retain all the receipts as you can claim back from the taxman certain start-up costs and get the VAT back if you’re registered.
Assets are important to your business as well because you can use some of your assets to help secure financing for the company. So, it is important to understand a little about business finances – you can learn more about this during our courses.
The principles in business ‘tools’ and planning apply similarly to a management consultant as a plumber.
So and as an example, let’s take a look at the tools you might want to start as a plumber. A framework of three sections with some rough pricing will help you think about the ‘tool assets cost’:
- The essential tools are those you should to fix a leak or just stop any further damage.
- The contingency tools a reliable plumber would carry given the correct plumbing materials.
- The tools that can speed up the work and to know that there is no more you could have done.
You can look up suggested minimum kit lists for various roles and ask people in the business about the best sources.
Once you have a list of your business essentials, stationary or tools, you need to add up the costs for use in your business plan; we cover that in the business planning course.
Remember: Quality ‘tools’ are important if you rely on them or use them frequently. Other ‘desirable’ tools may be worth buying on buy cheap, use once basis and buy new ones. Your customers will expect you to do the job on first visit so having the required tools is essential for your reputation and performance = future work/income!
We have found a great skilled trades kit list and ‘what does that tool do’ knowledge base. Don’t be surprised by the name but, for just about every skilled trade check out Wonkee Donkee – yes seriously!
By the way, our friends in Forces Cars Direct can help with your commercial vehicle needs with significant discounts on forecourt prices for the Services Family.
Many of the services providers do discounts for veterans which is useful for sole-traders.
Check out the Defence Discount Scheme for useful offers but check the small print as sometimes deals are restricted for personal use rather than business use. Its also worth shopping around as some services offer discounts which may beat the MoD discount scheme.
If you work from home, you can claim part of your home running costs against earnings. This includes phones, broadband, heating etc set against tax for your business. You can learn more about this in our small business accounts, reporting and taxation module.