Crossbone Systems

When you haven’t got any money and you need a website that will look nice and professional, my advice would be to head over to wordpress.com. As well as being really easy to update (even for non-technical users), they offer all sorts of nice features for creating web pages and news/blog posts. The bonus is that they have stats tracking built right in, so you can how popular your site is (or isn’t!) getting. Their site is built on the same engine that this website uses, and you can sign up with them for free.

Just what every bootstrapper needs.

Once you’ve built your site using their tools, it’s only a few dollars to ensure it appears whenever you visit your company’s main website address.

Ryan Carson just posted a link to a short video he’s made listing some top money-saving tips for starting up a web company. He also talks through a useful spreadsheet that helps you plan your cash flow for the first year.  Check it out.

Tax is a slightly scary area. I’ve been reading a lot about VAT lately, primarily to make sure I’m fully compliant with all UK laws in the matter, but also to determine how to maximize my income.

As of April 2008, you don’t need to charge VAT until your company has brought in £67,000 of revenue in a year. (Note: you can check the latest figures from the relevant page on the HM Revenue & Customs site).

Once you have registered for VAT, the procedure is fairly simple - you add VAT to any invoices you send people, (eg. you add 17.5% to a bill for IT support services). Once people pay you the VAT, you keep it in a separate account from the main revenue you’re earning.

You also need to keep a log of anything you buy on behalf of the company that has a VAT charge (most equipment).

When the time comes to hand over the VAT to the tax office, you simply take the money you have saved in your special VAT account, subtract the amount of VAT you have paid on purchases, and send the remainder to your tax office. If you’ve actually spent more than you’ve collected then you can claim it back from the tax man.

You are allowed to register for VAT before your income exceeds a threshold £67,000, but until you’re about to reach that threshold, it’s optional. You might like to register if you know you’re going to be buying a lot of essential equipment for your business and want to claim back the VAT.

This article is all about how to set up an official private limited company, but to write about that subject requires me to make some assumptions. Without any, I’d have to write an entire book. So here are my assumptions - if more than a couple of these hold true, read on:

1. You’ve got a ton of ideas and are struggling to find time to work on any of them
2. You’ve hardly got any money to use to seed a company
3. You want to build a company, a brand and/or something you can point to and call your own
4. You live in the UK

The last one doesn’t preclude you from enjoying this article, but I’m going to focus on the specifics of starting up in the UK, because that’s where my experience lies. The bootstrapping blog has a guide for any Americans reading. Read the rest of this entry »

One of the constants of (UK) business seems to be late payment. I’ve seen many articles written about this, and it’s an unfortunate situation. But the reality is that when you send someone an invoice, the chances are that you’re not going to see the money for well over a month for the following reasons:

1. You have to give a “reasonable” payment period on the invoice, which can be anything from 14 to 60 days. (30 days is fairly typical)
2. Clients will often count the date of the invoice from when they receive it, not when it’s dated
3. They have to send you a payment, and they will use 2nd class mail
4. It’s likely the payment will take at least 3 days to clear

All in all, it’s a difficult situation when you’re on a tight cash-flow.

And people pay late.

So is there anything you can do about this situation, or do you just have to starve for your first two months of business? Well, if you’re bootstrapping your business it’s less of a worry, but in high-level terms, you have two choices:

1. Join the culture - make sure you pay the bills that you receive on the last possible day and earn the extra few pounds/pence from the interest of having the balance in your account
2. Fight the lack of good manners - pay your bills in a reasonable time, (eg. in the middle of the period) and politely demand that your clients do the same

I pass no judgement on either. Whichever is right/best is left as an exercise for the reader.