Going fully corporate - a serious business

The final option is the limited company and, as you may have picked up from earlier, the benefit of this is largely in its name – it has limited liability. As a director, if the business goes wrong, you will only lose what you have put into it. There is little chance that people who are owed money by the failed business can come after your personal assets or house (unless, of course, you have secured loans on them).

Also, you may find that you are taken more seriously as a company by the banks simply because there is the perception of size and corporate responsibility that comes from having your accounts published annually. The filing of annual returns and accounts (including having your accounts audited where necessary) is an additional expense in money and time but these can be done as part of a general business service for your salon.

Of course if your endgame is the sale of the business and the yacht in the Caribbean then the final reason to have a limited company is to give you an exit strategy. Limited companies can be sold, and filed paperwork shows prospective buyers the historic performance.

SO WHAT'S THE ANSWER?

Well, as with anything, what kind of salon owner you want to be is down to personal choice. But to kick-start your decision-making, you should think about the following questions:

  Do you like the idea of being self-employed and master or mistress of your own destiny?
  Have you got enough working capital or professional advice to adopt the more formal structures?
  Are you seeking investment in the business?
  Would you prefer to limit your exposure to your creditors?
  Do you want to sell the business in the future or will the business have a brand it can sell?

If you it still seems like a minefield or you simply want a chat then you should take advantage of your solicitor or services like hairlaw.co.uk