Pete Burnes has his own plumbing company based in Highgate, Central London. He set up as a sole trader ten years ago and has been doing well. He employees six staff and has recently moved from doing smaller commercial and residential work to working on larger commercial properties and for businesses in the city. He has decided to turn his business into a private limited company as he feels it offers more security for him and his family.
Pete has been making a healthy profit and has used his retained profit to invest in new machinery. To purchase a new van he had to take out a secured bank loan which he has been paying back at a rate of £100 per week for the last two years. He finds that his overheads are low and after some early hiccups his cash flow is positive.
Pete gained a number of his new clients through word of mouth recommendations. However as he is looking to expand his business he is considering promoting it using other means, he has been speaking to a small agency about doing a series of above the line adverts in local newspapers and on the radio to increase his client base.
As the owner of the business Pete is used to making all the decisions however this has recently changed as he feels that he wants to delegate some of his authority. To this end he is considering employing a full time administration manager who will be able to sort out all the bookings for projects and the paperwork enabling him to be more involved in the projects and operational side of the business.
Pete has had some recent concerns with his business as he is finding that he is being increasingly undercut by other building firms who are feeling the squeeze of competition from an influx of European builders. Some residential building work has also began to slow down as interest rates have increased and people have less money to spend on home improvements and small building projects.
