macrobug

Macrobug will be at the Smartphone Show both days. Hopefully I’ll be able to talk about our products somewhat.

Unfortunately there won’t be any fluffy toy bugs. Maybe next year?

I’m finally on top of my accounting system, more or less. So I now feel sort-of-qualified to try to explain it all. This is probably mostly quite obvious, but I didn’t previously know about stuff like director’s loans. In decreasing order of obviousness:

• The company gets income.
• The company pays for outgoings.
• Whatever’s left over is profit, and is taxed as corporation tax.
• Stuff I personally pay for myself, on behalf of the company, I have to make an expense claim for. Then it’s just more standard outgoings from the company.
• I raise an invoice against companies to whom I have supplied products or services.
• Expenses which I’ve agreed I can reclaim from my the company I’m contracting to, I simply add to this invoice. Unfortunately most of them I’ve paid for personally, which means I have to record them in many places - my expense claim against Macrobug, Macrobug’s outgoings, Macrobug’s income, and Macrobug’s invoice against the contracting company. (The middle two stages are somewhat simple - it doesn’t have to be wholly itemised, but it does have to be split into categories).
• I had to pay the company for my share.
• Anything else I want to give to the company, I pay as a Director’s Loan. I can claim that back at a later stage, without any fuss.
• If the company wants to pay me, and hopefully it will do, then I have a choice. Either I can pay myself a salary - taxed as normal with income tax, national insurance, etc. - or I can pay myself dividends out of the profits. These dividends are taxed at corporation tax rates, which is less than income tax/NI, so it’s obviously preferable to pay dividends. However it’s important to pay enough salary to maintain national insurance continuity. Furthermore, if the Inland Revenue suspect that you’re basically an employee of a company you’re contracting to, they can choose to tax you as if you were - thus taking a big lump of tax over and above the corporation tax. This is called IR35 and is a complicated area. For various reasons I believe I am outside IR35 so it shouldn’t happen to me, but you never really know until/unless the IR come knocking. (I personally reckon that even if they did decide my contract was an employee-like relationship, they’ll have lots of full-time contractors to investigate before they get around to part-timers like me).
• Either I or my company can pay me a pension.
• VAT adds a whole wad of fun on top of that. To be honest I’m still not 100% on top of it but I’ll probably post when I am!
• I just prepare ‘day books’ of the company records, which my accountant will turn into proper accounts at the end of the year.

AppleInsider thinks so. Fingers crossed. It will be a relief when I can finally use a modern fast laptop with a power supply that works and doesn’t belong to somebody else who wants it back.

One thing that I knew I’d find tricky is knowing how fast to make decisions. Whether “simple” decisions like which accountant to use, or which bank to use. Or complex decisions like which product to develop, etc. I do tend to be quite anal in assessing these things in my normal life; for some decisions I have been known to make embarassing spreadsheets of the pros and cons of particular options.

Looking at the simple decisions, I knew I’d struggle if I took ages deciding everything - there are just too many things to decide on - bank, accountant, IFA, solicitor, whether to register for VAT, what sort of company, how many shares to issue, etc. etc.

I was right - it’s been tricky. On occasions I have got bogged down in decisions - the bank was a particular pain. I filled in application forms for Barclay’s, Co-op and Alliance & Leicester before deciding which one to use. Mostly, however, I’ve been able to remember that time is money. Contracting for X pounds per hour for part of the week does put a very definite value on your time - especially when you’re ekeing out every remaining hour to try to get your own business of the ground. So on the whole, I’ve made decisions much more quickly than I normally do.

Methods to make quick decisions:

• Get professional advice. If your accountant suggests doing things a certain way, do it!
• Use friends and family to get recommendations for advisors. This worked for my accountant and my lawyer.
• Remember how much the procrastination is costing you.
• Convince yourself that, in the long term, it doesn’t matter much. In the case of the bank account I think I may have overdone this self-delusion… but hey, at least the decision is made.
• Avoid too much internet research. This tends to suck up time and doesn’t actually get very much information into your brain. If you’ve got a professional advisor you can phone, or a branch you can visit, you’ll probably learn more.

With the exception of the bank decision, I haven’t made a single spreadsheet to look at pros and cons - and even the bank one only had about five rows!

What about the more complex decisions, such as which product to develop? That remains to be seen. The only one I’ve had to deal with so far is whether or not to patent, as per my last post. I appear to have decided to do so.

Claire and I were discussing what a “mogul” is, and how it differs from an entrepreneur. We decided there was probably a spectrum entrepreneur-mogul-tycoon.

Right now I would say I’m at the sub-entrepreneur level. Maybe if Macrobug is successful people might consider me an entrepreneur one day. I doubt I’ll ever make it as far as mogul. And can anybody, in their wildest dreams, imagine a “Symbian Debugging Tools Tycoon”?

Fortunately I already had my business cards done, or I might have been tempted to put that on there as my job title.

OK, this is a biggie.

I believe that some of the tools ideas I have are probably patentable. But should I patent them? There are lots of pros and cons. Worse still, I actually have to make a pro-active decision about it, and soon. I want to be able to talk freely about what I’m doing within a few weeks, without having to get everyone to sign non-disclosure agreements. That either means I file a patent within that time, or it means I give up on the whole patenting idea forever. (Once you’ve publicly disclosed an idea you can’t patent it).

In some ways it’s just an argument between working hard on the product to gain competitive advantage, versus trying to legally protect it. When put like that (and given that software patents are nasty) I’m inclined not to patent, and just to work hard. However I can’t get away from the fact that it would add value to the company. There’s also the irritating fact that patents are supposed to be there to encourage ‘little people’ like me to innovate, and if I don’t have any IP to bargain with, they might just cause me to get squished one day.

As usual, all thoughts welcome. This really is a tricky one and I just can’t make up my mind.

A lot of people start their own business because they want something badly. Often, these ambitions are very worthwhile - for example, they want to work part-time to look after their kids, or they want to be able to move to the Alps, or some other positive lifestyle change.

Sometimes the ambition is simply to make lots of money.

I don’t really have those ambitions. It is quite appealing to be able to work from home, if ever we have kids, and it’s quite appealing to be able to work from wherever… but right now neither of those things are something I really need. As for money - well, that would be appealing if I thought I could really make a fortune from the business! - but right now I’m assuming I will just scrape by, if I’m lucky.

No, the reason I’m doing it is purely to get the experience, and because I feel I’d have regretted it if I hadn’t given it a try.

This might prove to be a problem in the future, if my motivation starts to dwindle. I can imagine that it’s much easier to really push yourself if you have something to really fire you up. We’ll see. For now I have no problem because it’s interesting and I’m learning lots.

It’s surprisingly how quickly I’ve had to develop branding for myself. So far, I’ve given one presentation, e-mailed one word document to people, and arranged to meet several groups of people. Each of these events has required some work - a PowerPoint template, a Word template, and business cards respectively. (Based on the basic ideas put together by Pepsmedia for the website).

Here is my most recent effort, the business card design:

Yes, I’ve called myself Managing Director. I considered Chief Bugsquasher or something but I didn’t think my more formal clients would be too impressed. They’ve already got a lot to deal with, with the name and the logo…

Again, in the vein of trying to give hints to others starting a business, it costs about £40 to get a run of 250 printed - you just send them a PDF of the right size.