I was chatting in the local pub with some friends the other night, and the conversation turned to the question of why we now have so many energetic young entrepreneurs setting up their own companies. Various views on this topic were exchanged (and beers consumed!). When I proudly boasted “ well, one of the obvious reasons is that I can set up a company in less than 2 hours and run it effectively for less than £50 a year!”. This claim was challenged in the group. Several people were skeptical and wanted more details. We chatted for quite and the conversation touched on many of the key aspects of developing and executing a new business.
Heading home that night I (groggily) tried to add up in my head all the pieces to make sure my boast could be supported. And I am reasonably comfortable that I am correct. Here are a few details of how I believe I can support that claim. I have used examples of products and companies I have used….but there are lots of alternatives you can find too. Note that these are the baseline “entry costs” for these services. More expensive packages and upgrades are always available once you get started!
- Set up your business
The first stage is to find a name that you can register to help you make your company distinctive. You can then use a company specializing in formations to set up the company, register the domain name, and configure it to provide email services, web-forwarding etc.
- Finding a good name that’s not been used: namecheckr.com – £0
- Look for similar registered companies: beta.companieshouse.gov.uk – £0
- Company registration and set up: theformationscompany.com – £20
- Domain name registration, email and web forwarding: GoDaddy, 1and1, joker.com – £10 per year
- Social media: twitter, facebook, Instagram, etc. – £0
- Get a web infrastructure
You’ll need to get some infrastructure to allow you to start communicating and sharing materials within and outside your team. Of course, you don’t need to own that because its available on-demand:
- Web hosting and cloud service: AWS lightsail – £3.50 per month
- Document sharing: icloud, dropbox, box, googledocs – £0
- Web management: wordpress – £0
- Collaboration: slack, gsuite – £0
- Conference calls: skype, appear.in, zoom – £0
- Keep it on track
Once you get moving you’ll need to ensure you are synchronized with the rest of the team. Once you get a few clients, you want to keep an open dialogue with them.
- Project management and planning: trello, asana, google calendar – £0
- CRM: hubspot – £0
- Mail lists and campaigns: mailchimp – £0
- News and email scheduling: buffer, hootsuite – £0
For many purposes…that’s it! Your company is legal, and you have things running. Of course, there are a million more things you can do, depending on your business needs, activities, products development, etc. But to all intents and purposes, you are a going concern.
Ah….but this is where my boasting may come crashing to the floor. In reality, however, there are now a couple of expensive add-ons that you can probably not avoid. Death and taxes…they always get you in the end.
- When the tax man cometh
Once you start trading, life can get complicated very quickly. At a minimum, you’ll need some accounting software service and a way to track invoices, payments, and expenses.
- Invoices and billing: xero – £5 per month
- Accounting services: Sherwin Currid – £400 per year
- Keeping the hounds at bay
Depending on your business, you will want to try to protect yourself from things that can go wrong. And in businesses, things can go very wrong, very quickly.
- Liability insurance: Hiscox – £250 per year
Remember, this is just the mechanics of setting up and running the company. Being able to do this quickly and cheaply allows you to test new product and business ideas readily. But not frivolously. It is not an excuse for wasting energy, time, and opportunity. The hard part is having a good idea, building a business case, convincing others to join you, finding a funding stream to build your products and services, creating a sales pipeline, and a million other things! These are where you need to spend your time and resources. Not on worrying if your website is working!
Perhaps you have set up and run your own company….or have interests in doing so. How do these suggestions fit with your situation? I’d be fascinated to see what is on your “must-have” list for running your business, and what you’d recommend to others following this path. Let us know!
(Disclaimer: Creating a company has tax and financial implications. I am not a lawyer. Nor an accountant. You’ll need to do your homework, get advice, and take responsibility for your own decisions.)