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How To Start a Carpentry or Joinery Business in England

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If you are interested in creating your own carpentry or joinery business, you may be unsure where to begin. While all the legal requirements for starting a business may seem overwhelming, there are a few key areas you should first consider. This article will explain some legal issues specific to a carpentry or joinery business that you may wish to consider before launching your own small business. 

Do You Have a Business Plan? 

There is no legal requirement to have a business plan. However, from a commercial perspective, all businesses should have a plan. 

You can think of a business plan for your carpentry business as providing the answers hypothetical investors may ask you. For instance, your plan should address:

  • your plan to market your carpentry or joinery services;
  • how you will source your initial clients;
  • your up-front costs, as well as fixed and variable costs;
  • how you intend to finance your business; and
  • whether you intend to hire any employees or bring on a business partner.

The financial portion of your business plan is significant because poorly managed finances will sink any business. Therefore, you should start to consider factors like your:

  • break-even analysis;
  • profit-and-loss forecast for the first year;
  • cash-flow forecast; and
  • balance sheet forecast. 

What Are Your Up-Front Costs? 

Your up-front costs require due attention because, in many senses, it is the first and most challenging hurdle to overcome. However, provided you can make enough to pay these initial variable costs off, you should be able to generate stable long-term cash. 

For carpentry and joinery, start-up costs may include:

  • accreditation costs; 
  • trade association costs; 
  • equipment costs; 
  • vehicle costs; and 
  • storage costs. 

More generally, you should consider:

  • insurance; 
  • employee wages; 
  • rent associated with an office or registered address; 
  • marketing costs; 
  • business cards; 
  • legal costs; and
  • a “war chest” of savings.

Bear in mind that not all of these items are one-off expenses.

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What Structure Suits Your Business? 

A business structure refers to the legal framework your business will operate under. The four most common business structures for all businesses in England and Wales are:

  • sole-traders;
  • unincorporated partnerships;
  • limited companies; and
  • limited liability partnerships (LLPs). 

Each business structure has its advantages and disadvantages, and not all will be relevant to your business. However, as a business founder, you should familiarise yourself with the implications of trading through an unincorporated business structure instead of an incorporated one. 

Sole traders and unincorporated (general) partnerships are unincorporated. On the other hand, limited companies and LLPs are incorporated. If you incorporate, you will benefit from the legal principle of limited liability, which means that your business’ assets and liabilities are separate from yours. 

For example, say a client successfully sues your business for £2m in fees. However, your business is only worth £50,000 and trades through an incorporated structure. Since you benefit from limited liability, the client will likely only be able to satisfy a portion of their legal claim against your business’ assets. However, your personal assets, like your house and car, will not be at risk.

On the other hand, if you traded using an unincorporated structure, the law does not distinguish between your business and your personal property. Therefore, you could be ordered to sell your home and car to settle the claim against your business.

However, trading through incorporated structures also requires more administration and management than unincorporated entities. You should balance this downside with the potential benefits from trading with limited liability. 

Further Considerations 

Before starting your carpentry or joinery business, you should consider the following. 

Insurance

Most carpenters and joiners will need a public liability policy and insurance covering the costs of injuring yourself or another person or damaging another’s property. Furthermore, you will need to abide by the terms of the policy to ensure that you will be covered if something goes wrong. 

Accreditation 

There is no legal requirement to obtain accreditation from an organisation like the Institute of Carpenters. However, from a commercial perspective, you may find it difficult to win contracts and sub-contracts from customers and clients. Therefore, you may wish to invest time and money in obtaining one or more of the various carpentry and joinery qualifications available in England and Wales. 

Tax Liability 

Your business’ tax liability depends on the business structure you trade through and your income and expenses. That said, you should consult an accountant or tax professional to ensure you comply with your obligations and maximise any credits and tax benefits your carpentry and joinery business may be eligible for. 

Key Takeaways

As with any new business, you should ensure that you have a thorough business plan in place for your carpentry or joinery business, with particular attention paid to the financial portion of your plan. You will also want to consider what business structure you should adapt and ensure you understand the implications of incorporated versus unincorporated structures, particularly regarding limited liability. You should also consider what insurance policy best suits your business needs. 

If you need help with your carpentry or joinery business, our experienced startup lawyers can assist as part of our LegalVision membership. You will have unlimited access to lawyers to answer your questions and draft and review your documents for a low monthly fee. So call us today on 0808 196 8584 or visit our membership page.

Frequently Asked Questions

What do I need to start a carpentry or joinery business?

From a general business perspective, you want to ensure you have a strong business plan. From a legal perspective, you should familiarise yourself with regulatory obligations and the business structure that is best for you.

What are the main regulatory requirements for a carpentry or joinery business?

In general, there are few, if any, legal obligations unique to carpentry or joinery.

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Jake Rickman

Jake Rickman

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