Taking the First Steps, Company Basics: Building a Business Lecture 1
Today, I attended the first of the “Building a Business” lecture course at the Said Business School, which was given by Tom Hockaday, the managing director of Isis Innovation Ltd. His talk was titled “Taking the First Steps, Company Basic”. These are my notes (the lecturer’s slides are here):
A Company
- Legal Entity
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Defines things like liability,
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Has a set of documents called the Memorandum and Articles: these define the purpose and rules concerning the running of the company.
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A Company Secretary handles bureaucratic aspects of the companies legal status.
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Minimum Requirements for a Company
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A name
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A share
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A director
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An address
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Insurance
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the Companies Act 2006 covers company law at the moment. It covers, among a lot of other things, directors’ duties: there are good resources online for this. Companies must keep accounts and not trade insolvently. Directors are personally liable for what a company does if it gets into trouble.
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Tax
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boring but important. There are corporation and personal tax issues to address: the Enterprise Investment Scheme and the Enterprise Management Scheme help investors and managers small companies save money.
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There are lots of grants and free advice and expertise available.
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People
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If relationships get strained, it’s important to stop trading and fix the problems.
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Deal honestly and decently with people in your company and the relationships will be more effective.
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The MD plays a crucial roles
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Supports everyone else
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Ideally should be someone who has done it before
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if you can’t afford one, seek advice from friends.
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Being an MD of a startup is harder than doing the same role in an established company because there is no momentum.
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Advisors: it’s important to work out who’s paying – take free advice, and get it early.
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Lawyers
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Accountants
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Bankers
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Human Resources
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Public Relations
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Business support networks
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The Idea
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Not a business plan but a value proposition – “the elevator pitch”.
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(1) Do something – product/service
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(2) Sell it to someone – customer
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FOR MORE MONEY THAN IT COSTS YOU
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A lot of startup companies will have predominantly intellectual property – make sure you protect your rights.
The Money
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Companies need to make money. Most companies need some initial investment.
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“Money changes people and never for the better. [Founders] usually start out as mates, but if one of them is getting much more money than the rest can lead to jealousy and resentment”.
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“Cash is King”
