Tricky title but I think an important question for many when it comes to how some businesses are perceived.
So why am I asking what appears to be an accountancy question on a PR blog? Well, it comes down to perception really and if I’m going to bang on every week about how to help manage your reputation I thought I should at least consider the message that your legal status sends out.
Sure, for some it is just a series of letters on the bottom of an invoice or email signature and it probably won’t be a deal-breaker if you have already wowed the client with your wonderful widgets but…it….might.
Would you want to take that risk?
I work with a huge range of clients, most of which fall into the (rather large) SME bracket and most of whom are Limited in terms of their legal structure but I also regularly meet sole traders happily going about their business – hey, until March this year I was one of them. So why did I make the leap and go Limited?
I thought the timing was right for me
I thought it would send a good message back to the owner (me!) about the business
I thought some people viewed sole traders as less than serious about their business and didn’t fancy similar misconceptions
I thought that clients, suppliers and business partners would potentially have that little bit more confidence/reassurance
And…sure…I thought there might be some advantages when it comes to the tax man!
However, I include this final point last. I think the other messages that waft around in the breeze of public perception (please forgive the moment of poetry) are more important than making a tax saving and even suspected they might help me to win some more business here and there. I can worry about any tax and admin implications once I snaffle new clients.
As I’m no expert on accountancy, I thought I’d ask one and who better than the folks who helped me through the Limited maze, Crunch, who I agree provide a “ridiculously easy approach” to accounting.
“At Crunch around 70% of our new clients form limited companies. Aside from the tax savings, many freelancers and contractors find it gives them an added air of professionalism, as well as financial protection should things go wrong.
“In some sectors, the self-employed are actually compelled by their clients to go Limited due to the added protections it can afford in terms of separating your business from you as a person. Many people think incorporating is the bureaucratic equivalent of Everest, however with easy online formations you can have your own Limited Company up and running within a few hours.”
Loving Jon’s Everest simile there and I have to say that perception held me back for a while too.
However, I’d rather have no perceptions holding me back, so I will make what sounds like a strangely counter productive statement and declare; “It is time to be totally Limited!”