A practical introduction to starting a creative business
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This document provides advice and information for starting a creative business, including how to register a company, get business banking and tax accounts, manage VAT payments, apply for funding, sell internationally, and eventually shut down the business. It recommends enlisting an accountant to handle tax filings, using bookkeeping and accounting software to stay organized, and considering insurance for your business. The author shares their experience owning multiple creative businesses in the UK, US, and Estonia.
A practical introduction to starting a creative business
- 1. A practical introduction to starting a creative business
- 2. (or all the things I wish people had told me about when I was 26).
- 3. I am not a lawyer or accountant. Do your own research!
- 4. Alexandra Deschamps-Sonsino alex@designswarm.com @iotwatch on twitter & insta I don’t use Facebook
- 5. About me Industrial & interaction designer First UK distributor of the Arduino
- 7. About me Founder of Good Night Lamp
- 8. Who are you? What brought you here today?
- 9. What has prevented you from opening a business? What are you worried about? What scares you?
- 10. I currently own 2 UK businesses 1 US subsidiary 1 Estonian business
- 11. I currently own 2 UK businesses Designswarm Industries Ltd Good Night Lamp Ltd 1 US subsidiary Designswarm Industries Inc. 1 Estonian business Designswarm Industries OU
- 12. Before that 3 UK business which were dissolved Tinker.it Ltd (2007-2010) Anything Labs Ltd (2013-2015) The Internet of People Ltd (2013-2014)
- 13. A business is a Welsh blanket. It protects you from the elements.
- 14. A business is a Welsh blanket. It protects you from personal bankruptcy. It allows you to work with very big companies. How it does doesn’t affect your personal credit score.
- 15. A business is a box. It’s a good way to work with people you’ve never worked with before in a structured environment where the risk is managed.
- 16. A business is cheap & easy to set up. It is also easy to close down.
- 17. Your best friends when running a business: Your accountant Your bookkeeper Your accounting software A good filing system A good binder HMRC & Companies House
- 18. Your accountant can take care of: Your registration Your VAT returns (if you earn over £70K) every quarter Your End of year accounts Your Corporation tax return Your Payroll (if you have employees) Your personal tax return (£0)
- 19. A bookkeeper can take care of: Collecting & sorting all your receipts Putting them into your accounting software Have everything up to date for your VAT returns You can also decide to do this yourself
- 20. Accounting software online will help you: Invoice your clients online easily Keep an eye on your sales & expenses Keep an eye on VAT returns Keep an eye on how well your business is doing
- 21. A good filing system that you keep safe: Sort your receipts by month in an expanding file. Buy one for every year. Store them with lovespace as you have to keep records for 6 years after you close a company.
- 22. What do you need to do? Your registration Your VAT returns (if you earn over £70K) every quarter Your End of year accounts Your Corporation tax return Your Payroll (if you have employees) Your personal tax return (£0)
- 23. Register a company Companies House website Costs £100 or £200+ with an accountant You can be using a different name than the name you register with. This is called your trading name. Let’s look for a name for your company!
- 24. Getting a business bank account Try HSBC especially if you think you’ll do business internationally. Make an appointment with a business banking advisor. Come with your ID, proof of address, registration documents and business plan printed out.
- 25. Getting a VAT number. You don’t have to register for VAT if your turnover is less than £85 000. You can only register for VAT if you have a bank account as HMRC will pay into (or take from) your account auto-magically.
- 26. VAT VAT is 20% that you add on top of your services. VAT you owe every quarter is calculated by: VAT you charged-VAT you paid (from your suppliers).
- 27. How to manage VAT payments Keep a savings account with 40% of money coming in to cover what you might owe in VAT and corporation tax.
- 28. End of year accounts You file accounts for the year prior. In December, I filed accounts for 2016. So you need to hold on to your savings for that year for a long time. Check your accounting software as you go!
- 29. Corporation tax 20% of your profits that year which you will need to pay to HMRC. You can ask for a delay in paying this, just call them.
- 30. Your personal tax return Ideally you are an employee of your own company so you get your P45s, a pension, PAYE and NI paid for you by the company. This means you will get a symbolic salary under the minimum taxable income so you don’t pay taxes twice!
- 31. Insurance As a business you can get Indemnity insurance and employee liability insurance. Many large businesses need this to work with you. It might cost you £79+/mo
- 32. Funding European & Innovate UK funding are open to registered companies. There is tax relief for your R&D work.
- 33. Selling to the US You can set up a subsidiary of your UK business in the US using Atlas Stripe service. You get a bank account with the digital bank Silicon Valley Bank and your business is based in Delaware.
- 34. Brexit! We will become 20% more expensive as we will have to charge VAT to European customers.
- 35. E-Estonia Estonia has a e-citizen program that lets you set up a company in Estonia and set up a bank account online using digital banks.
- 36. Shutting down a company You can close a company in writing if you don’t owe anyone any money. You can let it become dormant. You can dissolve a company with an insolvency company if you have debts you can’t manage. This will cost you around £5-6K.
- 37. Questions?