It's a serious business, stand-up. Hours on the phone booking appearances. Long journeys - often spent alone - travelling to gigs. Days when you just don't feel up to performing. And when you get up on stage there's the possibility of rejection. The clowns of the 21st century still shed tears.
Geoff Whiting, a former salesman turned successful stand-up comedian and club booker, knows all the ups and downs of making people laugh for a living. After being made redundant in 1997 from his job selling delicatessen foods, Whiting spent the next four years working flat out on the comedy circuit. He relished the live performances, the smell of greasepaint, but found the endless travelling and 20-hour days less enjoyable.
He's still a workaholic, spending his days booking acts into clubs and six nights a week performing. But it's not just budding comedians like Whiting who devote so much time and energy to their work. It's a work ethic commonly found among the UK's growing band of sole traders - self-employed entrepreneurs who work alone. Not all of them live off mother-in-law jokes, but Whiting's are the classic problems faced by this business breed.
Today's corporate world is dominated by big business. Yet the giant British multinationals account for less than 1% of the 3.7 million businesses operating in the UK. Most of the remainder is made up of one-man bands, which account for a staggering 63% of all UK enterprises. And people are increasingly opting to be their own boss. According to the Small Business Service, more than 1,200 new businesses start up in the UK every day, and at any one time one in every 30 adults is trying to set up a new business.
The advantages of being a sole trader are obvious. Anyone can set up alone, as the red tape is minimal. There is no need to register with Companies House, no corporation tax, no reason for a business plan, unless to secure an initial loan from a bank or private investor. The general perception is that you print up some business cards and you're off.
The reality is only slightly less straightforward. As Whiting found, it took only the catalyst of losing his job one Monday morning to propel him into stand-up comedy. 'They called me in and said: 'Sorry, leave the car, here's the money we owe you, goodbye', and that was that,' Whiting recalls. A week earlier, he'd competed in the Daily Telegraph's Open Mic awards for stand-ups. It was his first attempt at comedy, and to his surprise he got through to the semi-finals. While preparing his act, he lost his job. 'I started going to job interviews and claiming unemployment benefit,' says Whiting. 'But I kept up the comedy, and eventually I got better.' A year later, he went into it full time.
Whiting feels now that it was a big step. His benefits stopped and he was soon thousands of pounds in debt. But within six months he was earning as much as he'd ever earned as a salesman, and once he'd set up his company, Mirth Control, booking comedy acts into venues, he was earning even more.
Although, as he says, 'when I started, I had no idea it would turn out that way'.
For most sole traders, the future is uncertain. Success requires determination and self-confidence. The sort of person who lies awake at night worrying about the next mortgage repayment won't enjoy what can be an insecure existence. And as a sole trader, you have unlimited liability - you are personally responsible for any business debts. In the case of bankruptcy, creditors are entitled to sell off any stock, personal goods and other assets you possess. Says David Hands of the Federation of Small Businesses (FSB): 'If you go into debt, you could lose your home.'
The positive side is that sole traders are entitled to all the profits of the enterprise. But they must register with the Inland Revenue, as they are classed as self-employed for tax purposes. Many sole traders, like Whiting, employ an accountant to manage their financial affairs.
David Irwin, chief executive of the Small Business Service, says it's advisable to hire an accountant, 'but it's also important that you understand your finances yourself, especially when managing them on a day-to-day basis'.
Setting up a business can be a financial drain. Whiting had to take out loans for everything, from buying a computer to paying rent. 'It's all about priorities,' he says. 'I still drive an F-reg car, not because I can't afford a new one but because I'd rather channel the money back into Mirth Control.' Some fellow comedians are not so prudent. 'There are guys on the comedy circuit driving around in flash new cars who are up to their eyeballs in debt,' says Whiting.
As well as planning finances, anyone thinking of going into business alone must be prepared for the high number of hours they'll need to put in. 'If it's your business, you've got to work as many hours as you can tolerate,' says Whiting, 'especially at the beginning. You just can't do it half-heartedly.'
Even if you can greet this idea with enthusiasm, your family must also be prepared for it. Despite the incessant pace of the past few years, Whiting found time to get married - in a ceremony at the Edinburgh Festival, with a congregation made up entirely of comedians. 'My wife is totally behind it,' he says. 'If she wasn't I'd either be divorced or I'd never have got married in the first place.'
Whiting admits that living with him isn't easy. He's at his desk at home from 9 to 5, booking acts into the 25 clubs he works for. He may then spend half an hour with his wife before rushing off to do a gig. 'It must be horrendous to live with me,' he says. 'I'm a fanatic. And I'm sure it's the same with any other self-run business.'
As well as the long hours, it's rare for sole traders to take much holiday.
Whiting has about 10 days a year over Easter and Christmas, and some don't even manage that. 'We haven't had a honeymoon yet, apart from three days at the Edinburgh Festival,' says Whiting. 'And that's more of a busman's holiday for me.'
It's important for sole traders to know their market. A business may have the best product in the world, but unless an audience is carefully targeted, it will go unnoticed. Whiting is fortunate to be both a performer and a booker. As a performer, he's able to visit comedy clubs across the country and make the necessary contacts with club owners. When it comes to booking acts into these venues, he has a valuable insight into his target market.
Irwin stresses the importance of knowing your audience. 'The common reason that sole traders fail is because they have an insufficient understanding of their market. They must also differentiate their product or service, because it's very rare that a sole trader can compete with a larger organisation on cost leadership.'
Those who find no time off, mounting debt and working alone a turn-off can always set up a partnership. Like sole traders, partners are considered self-employed.
Again, there is little red tape. But it's wise to consult a solicitor - all partners are liable if just one runs up debts.
Another option is to register as an incorporated company, although there may not be much advantage early on. To Irwin, 'the advantage of becoming an incorporated company is you have limited liability. But when profit levels are fairly low, it's better to be unincorporated, because you pay lower levels of National Insurance.' Incorporated businesses also have more legal and regulatory requirements to fulfil.
A sole trader can always employ someone if the business is growing rapidly.
'At some point I'll have to employ somebody, especially if I keep expanding at the rate I did last year,' says Whiting. 'It might cause its own problems, because if you've built the business in your own image someone else is bound to have a different idea of how things should be done. But I can't physically do it any more.'
The life of a sole trader is not always easy. Of those operating in the UK, 78% have an annual turnover of less than pounds 100,000. The average wage for the self-employed is pounds 15,000 per annum, compared with pounds 19,000 for the average employee. Says Hands at the FSB: 'Lots of people think that the lifestyle of the sole trader is horse racing and fast cars and holidays in the Bahamas. In fact, it's very hard work, there's no time for holidays and the wages are often below the national average.'
But don't let that put you off. Working as a sole trader means being your own boss, and the psychological rewards can far outweigh the concerns.
At the end of the day, it's your business and you can do what you like with it. 'You need conviction, self-belief and a relentless work rate,' says Whiting. 'But you're your own person, you make your own decisions, and your identity is stamped across the business. There's a real sense of achievement in that.'
Small Business Service: 020 7215 5363 or
Federation of Small Businesses 01253 336000 or www.fsb.org.uk
Geoff Whiting at Mirth Control: 07966 189592
HOW TO SUCCEED AS A SOLE TRADER
- First of all, you should notify the Inland Revenue and National Insurance Contributions Agency.
- Be prepared to work long hours.
- Discuss with family and friends the likely impact of your new endeavour on your time and finances.
- Consider getting insurance to cover yourself, your stock, assets of the business and so on.
- Speak to an accountant about organising your finances.
- Set up a personal pension plan.
- Network as if your business depends on it, since it probably does.
- Be aware that if it all goes wrong, you will be personally liable for any debts.
- Be persistent. There's no point doing all the groundwork only to give up at the first hurdle.