Quite possible the single greatest and least boring lecture I’ve ever sat through.. then again, starting my own company is what I intend to do.
The basis of the guest lecture was setting up your own business, and from someone who had actually done it without any prior knowledge before he tried.
The first issue Richard talked about was how many people would be taking part with the setup of the company. Whether it was by yourself or with a friend/group, each having their own benefits such as setting up by yourself is better from a bank point of view since there will be less arguments over the direction of the company, the group being better from a trader point of view since people interested in buying your software would see you as more professional than a freelance.
Securing money is important as one would expect when setting up a company, a business plan is needed for banks to judge whether or not they’ll invest in you, and Richard himself got the backing due to his Excel spreadsheets just updating when you changed a value.
Another method of getting money is to find an investor which can give you more than a bank can, however this can pose problems, as by law you have to take the path that will get the most money for your investors.
The lecture continued to talk about company types, whether you want to be a Sole Trader or register as a private limited company. As a Sole Trader, you and your company are seen as one, so if you get sued, your company doesn’t just get sued, you do. As a registered company, only your company can be attacked through lawsuits, not yourself. Being registered as a company may be harder to setup, but it makes you look more professional, however your finances are visible to other companies.
VAT registration although optional if your annual turnover is less than 70k, but the downside to registering is that you must charge VAT on top of your sales if you are registered. Although you as a company can claim it back, and if you sell to another company that is VAT registered they can claim back the VAT they paid on your product, for average consumers, it makes the price higher. By not being VAT registered, it can make your company appear small to larger companies.
Finally, when setting up a business, Richard mentioned that it is good to get help from CIDS Manchester, Accountants and Solicitors that are recommended, and Companies House.