On Wednesday, I founded Crossbone Systems. Before founding the company, I considered blogging the experience but was worried that the whole thing might come across as a little nauseating.
Well, now I’ve already made my first costly mistake, I figure that maybe blogging it isn’t such a bad idea after all. I’m only human; there are bound to be plenty more mistakes to come that might be worth warning people about.
I was a big fan of the Bootstrapping Blog. Unfortunately, it deals with the generalities of starting your company, the hints and tips for staying solvent: not the hard fast, legally-required specifics to actually get things off the ground.
It’s easy to feel screwed founding your first company
The first thing I discovered is that before you even decide to found a company, they see you coming. You’re fresh meat, ready for the taking. A quick search shows the millions of pages all offering to take your money in exchange for a fast and easy founding.
I’d done a bit of research into company law, I vaguely knew what I was letting myself in for, and had some idea of what I needed. Even so, there are several issues that come to mind as you start to browse around those first search results:
- How do I know that these companies are even legitimate?
- How do I know that these compaines are any good?
- Are the “special offers” they all offer really that special?
- Is my decision, no matter how well or ill-informed, going to come back to bite me later?
I wrestled with those 4 questions for a while. I figured that Google were trustworthy enough that, in theory at least, the top results could only realistically be legitimate companies. So I did a bit of research, but in the end I just picked what looked like the best deal, feeling generally pretty intimidated about the whole affair. I went with the silver package by Companies Made Simple. This gives me:
- 3 hour online formation [not a feature – I did it outside office hours]
- Full Trading Limited Company [well, duh]
- Fast Track Banking [what, faster than walking into my bank? sadly not]
- Printed certificate [sounds useful]
- Registered Office – EC1 [sounds brilliant, in theory]
The complete package cost me £59.99. However, I also needed a company secretary and thought that using friends or family was a recipe for disaster – Companies House make the role of company secretary sound pretty intimidating. So I went with a “Nominee Secretary”. The “nominee company secretary” adds another £75 to the cost. At this point, I should have noticed the sales text states “Nominee secretaries do not usually have an active role or function in the actual business of the company.”
Now at the time, that all sounded very exciting indeed. Hindsight is a wonderful thing: to make use of the company secretary, I need to complete forms in the presence of a JP, Doctor or Solicitor. So that’ll be another expense.
When coupled with the fact that the registered address service only includes mail forwarding for mail that arrives from Companies House, and I’m seriously feeling screwed by the registered address package. If I want mail from the registered address sent to a real address, that’s another £15 per month!
Successfully founding a company without getting screwed
I’ll be writing a more detailed article in the future, but for now my basic advice would be this:
- Before you’ve even registered your company, talk to an accountant. If you need to, ask them about their services for acting as your secretary or registered office address.
- Start a company using the cheapest service you can find – your accountant may be able to recommend an online service.
- Register the web domain names for your company as soon as possible.
- Get a company bank account as soon as all company paperwork has arrived. HSBC let you have the first 18 months free.