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Blog: In order from day 1: starter tips that really help you

As a start-up, there is a lot coming at you that is new to you. With these tips for start-ups, you can avoid common mistakes that will cost you money later.

1. Think twice about your hourly rate

"Cheap is expensive" is a well-known saying for stuff that breaks down soon after purchase. The same applies mirrored to the hourly rate you charge. If you work too cheaply, you end up being expensive by having to work much harder for an okay income. Moreover, you need to put money aside for taxes: gross is not net. Do not let yourself be bluffed by a client and take the time to calculate calmly whether you will have enough left over at the bottom line.
A second pitfall is budgeting the number of hours: again, clients tend to over-optimise the work or come up with additional requirements during the job. Hence these two tips:
  1. Don't be afraid to negotiate. With this calculation tool calculate your hourly rate.
  2. Keep track of your hours:
    • To be stronger when your client comes with additional requirements.
    •  So that on subsequent jobs, you can better estimate how much work the job is. So that you don't turn unpaid hours.

2. Set up (financial) records from day 1

Most start-ups manage their finances based on the bank balance. With that, you quickly lose track. When you start doing business, it is important to look further ahead. A (simple) accounting system provides important information on which you can steer, such as:

  • Bills still outstanding.
  • The VAT you have to pay at the end of the quarter.
  • The turnover you made
  • The amount you have set aside for your income tax assessment.
  • The buffer you have (after deducting expected taxes and running costs).
  • Last but not least, you avoid having to search for the receipts of all expenses afterwards. You save time!

Note! To be eligible for the self-employed deduction and the start-up deduction, you must meet the hour criterion (at least 1225 hours per calendar year). You must therefore keep track of your hours. This includes all the hours you spend on your business, including the time you spend on administration or marketing.

3. Take your tax return seriously

As an entrepreneur, you have to deal with VAT and sales tax returns. At least four times a year, at the end of the quarter, you have to file a return, even if you have nothing to declare or pay. Take this seriously: if you are late, you will get a warning the first time. The next time you are late, a first fine will follow.
Tip: You have to file your income tax return before 1 May. Via the business portal of the Inland Revenue, you can ask for a deferral.

4. Arrange your liability

When you go into business, you run risks. Damage you incur while practising your profession is not covered under private third-party insurance. Sometimes you may also need additional professional liability insurance. It is wise to research what is common in your industry.

General terms and conditions

Another way to limit your liability is to draw up and use general terms and conditions. In these, in addition to liability for damages, you regulate things like:
  • The payment term and any collection costs and interest;
  • A retention of title for when the customer fails to pay;
  • Settling a dispute. What are the steps and who is competent to adjudicate in a case of conflict?
For the deposit of general terms and conditions at the Chamber of Commerce you pay €21.70 annually.

5. Get an accountant to do your accounting and tax returns

Preparing the profit and loss account and balance sheet is skilled work. You can use an accounting programme, but for the finer details it is better to turn to an administration and accounting firm. This will save you time, but more importantly: a good adviser knows the route to deductions and entrepreneurial schemes. He or she is a valuable sounding board to whom you can turn with questions and with whom you can spar about your plans and dilemmas.
Tip! Many NOAB offices offer special starter packages with guidance and explanations.

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NOAB KEURMERK

The Dutch Association of Administration and Tax Experts (NOAB) is a trade association with over 1,050 member firms.
Together, these member administration and tax consultancy firms serve more than hundreds of thousands of entrepreneurs in the SME segment,
focusing on unburdening, guiding and advising entrepreneurs.

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