# 15.7, Setting up properly: the stuff your college didn't cover
You're right to call this "the stuff college didn't cover" – most courses barely touch it.
1. What college usually doesn't teach
Training providers and CITB research talk a lot about technical skills gaps, but they also flag business basics as a weak spot. Most apprentices finish with almost no grounding in:
- How to price work properly (day rates, overheads, profit).
- How tax, CIS and self‑assessment actually work.
- Basic contracts – what to put in a quote, what terms to have, how to handle variations.
- Cashflow management – late payments, deposits, staged invoices.
- Choosing a business structure (sole trader vs limited company) and what that means for risk and tax.
So they're strong on the tools, weak on running a small business. Your guide is plugging a real gap, not just adding fluff.
2. Common admin and legal gaps
Law firms and trade insurers see the same problems again and again from small UK businesses, including trades:
No proper registration
- Not registering as self‑employed with HMRC.
- Registering a limited company without understanding responsibilities or doing the Companies House basics.
No written terms or weak contracts
- Working off WhatsApp and vague quotes only.
- No clear payment terms, no variation/extra work process, no cancellation terms.
Wrong or missing insurance
- No public liability cover, or wrong level.
- No tools cover despite tool theft being a huge risk in trades.
Misunderstanding business structure
- Treating a limited company like a personal bank account, not separating company money from personal.
- Not realising that as a sole trader your personal assets are on the line for business debts.
Tax and expenses confusion
- Not keeping records properly.
- Not claiming basic allowable expenses (van, fuel, tools, phone) in the right way.
These are all fixable, but you want to catch them at the start, not when you're already in a mess.
3. Order of setup: do it in this sequence
For a one‑person trade business, a simple, realistic order:
Step 1: Decide your structure
Start as sole trader unless you've got a clear reason to be limited (e.g. big contracts demanding it or serious risk where you want liability protection).
Step 2: Open a separate bank account
Doesn't have to be a fancy business account on day one – a clean separate current account is enough. Keeps business money away from personal spending and makes tax and budgeting easier.
Step 3: Register with HMRC
- Register as self‑employed for Self Assessment.
- Register for CIS if you'll be a subcontractor to contractors.
- Note your deadlines so you don't get fines.
Step 4: Sort insurance
- Public liability as a minimum – protects you if you damage property or someone claims injury.
- Consider tools insurance and van insurance with business use; tool theft is one of the biggest risks for trades.
Step 5: Upgrade your CSCS (if you work on sites)
Move to your blue Skilled Worker or relevant card as soon as your NVQ is confirmed, so you don't get bounced at the gate later.
Step 6: Find an accountant/bookkeeper
- Doesn't need to be a big firm – just someone who "gets" CIS and small trades.
- Get them to set you up with a simple record‑keeping system or software so you don't drown in receipts.
Step 7: Basic documents and processes
- A simple quote template with terms.
- Invoicing process and payment terms (e.g. deposits, staged payments).
- A habit of logging income and expenses weekly.
That's the order – it flows from "what are you?" to "where does the money go?" to "how do you stay legal and insured?".
4. Realistic setup costs (ballpark)
Numbers vary by trade and how much kit you already own, but UK trade guides and insurers all cluster in a similar band.
Insurance
| Cover | Typical cost |
|---|---|
| Public liability (one person) | £80–£200/year |
| Tools insurance (up to £7,500 cover) | £60–£150/year |
| Van insurance (business use) | £600–£1,800/year (depends on age, area, van, claims) |
Accountant and admin
- Small‑business accountant for a sole trader: typically £400–£800/year.
- Accounting software: £10–£30/month if you use it.
Tools and van
If you've already built up your kit during your apprenticeship, you might just need to top‑up.
- Basic tools "top‑up" only (you've already got most things): maybe £500–£1,500.
- Full kit for a domestic electrician / plumber / chippy starting from scratch: could easily be £2,000–£5,000+ spread over the first year.
- Used van suitable for a tradesperson: often £5,000–£12,000 for something half‑decent, or you're into finance/lease territory.
Putting it together
For someone going from "just finished apprenticeship" to "properly set up sole trader" in a domestic trade, a realistic first‑year picture:
| Item | Typical first-year cost |
|---|---|
| Van (purchase or first year of finance/lease) | £2,000–£5,000 outlay |
| Tools (extra kit, replacements) | £500–£2,000 |
| Insurance (liability + tools + van) | £800–£2,000/year combined |
| Accountant + software | £400–£1,000/year |
| Branding/website/lead-gen fees | £300–£1,000+ |
Just to be on the pitch as a self‑employed tradesperson, it's normal to have several thousand pounds tied up in van, tools and insurance, plus £1k–£3k a year in running costs before you pay yourself a penny.
What to do next
- Read: 15.1 – I've finished my apprenticeship · now what? (the full picture)
- Read: 14.2 – How to price your first job without underselling yourself (build your day rate from these real costs)
- Read: 15.6 – The money reality · what you'll actually earn in years 1-3
- Read: S7 – Self-employed vs employed (sole trader vs limited, HMRC status)
- Read: S8 – Getting your CIS registration sorted
- Read: S9 – Setting up as a sole trader
- Read: S15 – Insurance you actually need
- Download: First 30 days after apprenticeship checklist (once live in Doc Hub)
- Download: First Job Pricing Worksheet
Sources (UK)
- CITB / training provider research – business skills gaps in apprenticeship programmes.
- Law firm and trade insurer commentary – most common admin and legal mistakes for small trade businesses.
- Trade insurance comparison sites – indicative monthly/annual costs for public liability, tools cover and van insurance.
- Self-employment setup cost guides – starter costs of £3,000–£10,000 depending on trade and existing kit.
- HMRC guidance – Self Assessment registration, CIS registration, allowable business expenses.
- Companies House – sole trader vs limited company responsibilities.
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