Becoming a driving instructor: Realities of managing a franchise business

Joining a franchise has lots of benefits; not only can you launch your own business without the need for that ‘lightbulb’ idea, but you also get ongoing support from a larger brand with experience and a decent reputation behind them.

However, while there’s certainly a strong support network to lean on, every franchisee is still responsible for the day-to-day running of their business. And for a driving instructor, that means building up clients, and equally as important, keeping detailed records to ensure you’re getting paid, promptly.

With lots of customers to keep track of, all paying varying amounts at different times and via a range of methods, staying on top of your accounts can prove a headache for many sole trader driving instructors.

Here, we find out what it’s really like running your own driving school business day-to-day, and how a small business accountant can help ease any potential pain points…

Nxt Gen Driving Academy

Owner: Matthew Gallagher
Company: Nxt Gen Driving Academy
Description: Driving school
Based in: Suffolk
Website: www.nxtgendrivingacademy.co.uk

After leaving college, Matthew Gallagher struggled to find a career that matched his qualifications. Falling into a “dead-end job” for the next six or seven years, it was initially a joke with his girlfriend that set him on the path to running his own business – after he sent her an ad to become a driving instructor for a laugh.

As his girlfriend reeled off a list of reasons why it was actually a fantastic opportunity, before he knew it he’d started the training process and admits he hasn’t looked back since. Completing his training in January this year and qualifying as a fully-fledged driving instructor, Gallagher tells us “the joy I get from the job is immense.”

With the flexibility of being his own boss meaning he can choose his own hours, Gallagher also has the added bonus of support from the Nxt Gen Driving Academy franchise network. More than anything though, it’s being able to offer someone a skill for life that makes driving instructing so rewarding, according to Gallagher:

“When they come back from tests with that pass certificate you can tell how much it means to them. All the positive feedback I get from my students obviously means they enjoy my teaching. When you love your job you’ll never work a day in your life!”

So Matt, what’s your average day like?

My usual hours were initially Monday to Friday 8am to 5pm. However, as the business has grown, I’m now working more like 7am to 7pm, or thereabouts, six days a week. When I get home I also sort out enquiries from new people and bookings for current students.

Who are your main suppliers – what do you need and how do you tend to buy your materials?

A lot of my supplies are covered in my franchise cost. Anything I do need such as extra fuel, oil, car parts to keep the car in tip top condition etc. I like to pay by card so I can keep my receipts. This makes it a lot easier to manage with the accountancy software I use.

I luckily have a good understanding with my local car wash who are very good at getting my car in and out to a great standard of cleanliness to get me back out on the road soon as possible. I just don’t have the time to wash it as often as those guys do it for me.

I also have a very good program on my iPad which I use for teaching purposes which logs and saves my pupils details along with their progress. It stores up-to-date information on the total of hours they have had and their payments details too. For instance, if they have block paid lessons, that will be logged down and I can take off hours they have had each lesson against how much they have paid accordingly.

How do you keep your records?

I currently have a folder to keep my receipts in and I keep receipts for everything including: fuel, car repairs, car washes etc. I ask everyone for a receipt as I know that it is difficult to get the tax relief if I don’t have the receipt especially if I have to pay cash for a service like car washing.

I am looking at a scanner so that I can scan and store my receipts in Google Drive in the future.

What are the pain points that other people wanting to become a driving instructor franchisee should know about?

The hardest part for me was keeping a diary and time management, something I never had to do before. I often allowed too much time between lessons in fear of being late, now I’m so much more organised with well-filled and well-timed lesson gaps.

Advertising was key to gaining a good reputation around the local area, although of course having the support from my driving school, Nxt Gen Driving Academy, was a massive bonus! I knew I had the support there when and if I needed it but it was still crucial for me to build up a client base.

When do you do your accounting and how does having an accountant help?

I do my accounting when I can, usually twice a week after I have finished lessons for the day. The bank feeds are excellent in the Sage One software that I use and to have my accountants Paul and Amy at 1 Accounts Online to give me advice when I need it is excellent.

I am new to business and trying to get my head around what to keep and claim for but I am getting there.

The small accountant’s view

Founder: Paul Donno
Company: 1 Accounts
Description: Cloud-based accountancy firm
Based in: Suffolk
Website: www.1accounts.co.uk

Matt’s extensive use of social media meant that when he wanted an accountant he posted on a local Facebook site for recommendations and we were thankful that a lot of people recommended us to Matt.

The big consideration when starting a business is whether to set it up as a Limited Company or not. Because of the new rules regarding dividends it was considered beneficial to start as a Sole Trader, however careful consideration was required regarding the structure of the franchise that he had purchased and in many cases the structure would be an advantage being Limited. However, ultimately, the agreement worked for a Sole Trader, being an easier structure to deal with initially.

We set Matt up on our Sole Trader service and registered the business with HMRC. For a new business it is essential to understand what is allowable and what isn’t and also understanding Capital Allowances on vehicles, whether to lease or buy outright are all decisions required at the start.

Clothing is also a good example to look at. In small businesses, most clothing – unless it is for health and safety – is not allowable for tax however if you add your logo for advertising then it is in most cases allowable for tax.

Another consideration regarding the status of the business is training. As a Sole Trader this isn’t normally allowable if you are learning a new trade (in this case driving instructor), however as a Limited Company and structured correctly it may well have been allowable as training employees is a tax deductible expense.

Our advice when starting a business is to always get professional advice as soon as possible. It could save you a lot of money in the long term and most accountants will offer initial advice for free – we do!

This article was produced in association with Sage One. For more business insight and tips to keep on top of cashflow and small business tax visit the Sage business bloghttp://uk.sageone.com/blog/.  

For a free trial of Sage One please visit http://uk.sageone.com/products/.