Getting Started

Discussion in 'Starting a Business' started by ruu1989, Feb 26, 2012.

  1. ruu1989

    ruu1989
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    I'm hoping to start up a small business. Nothing exciting, new, or ground-breaking.

    I have a sound technical background and hope to set up a small web hosting company (I already have a few people interested in buying hosting). I assume I can't just take cash payments and ignore the tax man. Could anyone explain the basic steps from going to a guy with an idea to a guy who runs a small company, ensuring that all legal/tax requirements are being met.

    If it helps:
    > I initially expect to be spending/earning no more than a few thousand a year (this is not my primary source of income, I see it as more of a hobby which should be able to sustain itself).

    > I am not allowed to 'carry on any formal or registered trade business or profession' at my home address. I don't know if this is a problem, can be ignored, or means I will need a PO box (I don't understand a lot of this).

    Any more information I can provide to help, please let me know.
     
  2. Fergal

    Fergal
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    Welcome to Business Advice Forum ruu1989, thanks for joining and posting your business questions.

    What country is your business based in?
     
  3. Oliver.N

    Oliver.N
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    Good Luck with it man :) Although it is very different depending on the country you are in yea.
     
  4. RegAddking

    RegAddking
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    Some ideas:

    1. Keep records of all financial transactions on a spreadsheet and your receipts and invoices.

    2. You have to decide whether you want to be a Sole Trader or form a Limited Company.

    3. For the latter, you can use a virtual office address as your registered office. My company does these: RegisteredAddress.co.uk

    4. A get a free 1/2 hour consultation with a local accountant.
     
  5. ruu1989

    ruu1989
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    Thanks guys! Completely forgot to mention, I'm in the UK.

    I've been looking at becoming a sole trader. My total outgoings for 'the business' will be about £80/month, and I hope to - somewhere between - match or double that in revenue. I know these are tiny figures, but I assume the legal mambo-jumbo applies nonetheless.

    I could also see me using this as a front for some freelance work. Perhaps a make-your-site-then-host-it-for-you kind of deal. All ideas really, but this is purely a 'side project' off my full time job. Like I said, more of a hobby which can hopefully sustain itself.
     
  6. kundansingh

    kundansingh
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    differnt countries have diff rules and regulatio regarding business, so u should make your move step by step:)
     
  7. ruu1989

    ruu1989
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    I understand a lot of the difference between being a sole trader and forming a limited company, is my personal liability if things go balls-up.

    If I set up as a sole trader, do I have to register as self employed? How would this be affected by my full time day job? Do I effectively pay myself? I don't expect to make anything from the company for at least a few months. My father has talked about providing the monthly capital for the server until things get rolling.

    Sorry for the myriad of questions. There's just a lot I'm interested in finding out!
     
  8. JPStonestreet

    JPStonestreet
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    I don't have any advice on the legal/tax issues, but I do have some general business advice on your model...

    How are you planning to host the sites? Will you have a server in your house or are you reselling services from existing web hosts?

    In the US, web hosting is a very competitive business and it has become really hard to compete with established companies who have distributed data centers with 100% uptime guarantees, all for a few dollars a month. If your hosting service doesn't have similar capabilities and your server goes down, you're going to have some pretty unhappy customers.

    You might want to consider signing up for a reseller program from an existing web host to get started. This will allow you to manage the customers, but you won't have to manage the servers. You can mark up the price of the hosting to cover your costs and customer service. You can also create the "make-your-site" functionality (which is a great idea if it's easy to use) to add extra value on top of the web hosting and your other services.

    I'd suggest doing some additional research on the market and some options for providing the service before you jump in.
     
  9. ruu1989

    ruu1989
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    It's mostly to host for friends/family/friends-of-friends. I'm not attempting to earn a living through this. My game plan at the moment is to rent a low-mid spec dedicated server from LeaseWeb (around the €50/month mark) and then run Parallels Plesk on top of it. It can handle provisioning, payments, and a hosting store-front. I've got a list of about 11 people who are interested in paying roughly £3-4/month for it. As I keep stressing it's more of a hobby which should be able to support itself than a business scheme. If it turns into more - great!

    It's primarily the legal/tax stuff I'm looking for advice on!
     
  10. riteshnarula

    riteshnarula
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    Good luck for your business and god bless you.
     
  11. ThirdSEO

    ThirdSEO
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    The web hosting industry is REALLY competitive so it's a very good thing that you already have people interested in buying hosting plans.

    Don't accept cash payments. Either setup a PayPal account with recurring monthly payments (which costs money) or go with a hosting company like HostGator and buy one of their reseller hosting packages. If you already have a few customers who want hosting going the HostGator route would be the best idea. You'll earn passive income and just walk to your mailbox to collect checks. Won't have to worry about any technical aspects or customer service issues. Reseller hosting has a ton of advantages so it's definitely worth looking in to. Here's a link to HostGator:

    http://www.hostgator.com/

    Once you land on their webpage click on their Reseller Hosting and check out the plans they offer. They have plans starting at $19.96 per month, which means if you already have 3 customers and charge them $11.99 per month thats $16.01 profit every month for literally doing nothing. Let me know if you have any more questions and I'd be glad to help.
     
  12. RegAddking

    RegAddking
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    1. You might want to ask that question in an 'Accountancy' sub-forum of this or some other forum. As you will be invoicing people it's better to sort it out sooner rather than later, as you will be lweaving a paper-trail.

    2. You know you can get a semi-dedicated server, which might be easier to admin.
     
  13. amac

    amac
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    Good advice.

    Good luck with your hosting business. It's pretty competitive, but there's probably niches out there like anything where you can build your business e.g focus on developers as opposed to corporations, reach out to designers as opposed to sys. admins etc etc.
     
  14. stevenrenolds

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    Good luck! I recommend for money saving purposes that you use a resellers plan with HostGator to start off until you get a sizable customer base.
     
    #14 stevenrenolds, Oct 23, 2012
    Last edited: Oct 23, 2012
  15. Mark T

    Mark T
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    The best thing you can do is to seek help from a professional financial adviser. With them, you can set up an appointment and help you out on how to compute the taxes you would be paying, the business stuffs that you have to take note of and should not avoid - only a business financial analyst / adviser can help you with that in terms financially managing your business.
     

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