Hi, firstly good luck! Bit too much down to earth thinking here, so thought I would try and lift the mood!
I think you need to start off by producing your own target income required to survive i.e. pay for rent/mortgage and pot noodles, and then work out how much you need to borrow and the number of clients you will need to gain over 12+24 months at various price points and see how realistic it is under various scenarios.
Acquisition costs, make up some numbers for your scenario analysis, as you can only really find this out by doing. If you are super social media savvy you might be able to get by on a shoestring otherise there are specialist who will charge you £500 a month to handle all that. Website say £1k, then as above £2-8k on other bits and bobs related to promotion.
Software and IT you could probably spend £50-200 a month on.
Your best bet, in my opinion, if you are technically capable already is to look at Tax Assists Franchise. Its a 40k initial fee and then about 9% of income and you would need to lease a property, but its a proven model you are paying for with a pre-built IT, marketing and operations platform.
There aqusition costs are very good on paper but you will have to speak to them to get the info. From your lack of knowledge about your own firms PL I think you have a whole area of unknowns and risks which this setup would mitigate to a large degree.
I attended one of their workshops and they are a smart operation. My available areas were pretty poor though, and you really need to believe in the high street shop model, which I think does work but not for me at the moment.
You can borrow 70% via banks to finance it, so lets say you would probably need about 20k in personal savings and 45k loan to cover the fee and other startup costs and Working Cap. You can hit 250k in year three or four.
Most traditional accountancy practices are not tech natives nor do they probably have the skill set to manage the nuances of many different off the shelf cloud accounting packages. If you are referring to Crunch Accounting then they were founded by a technologist rather than an accountant and are the business model of the the future in my opinion.
A traditional accountancy practice will build their internal workflow around a single core product due to internal skills limitations, and the software providers also offer incentives for building up the user base.
This will include marketing contributions and have hurdle rates for lower cost per license based on user base (which does not need to be passed to the client!).
Therefore it becomes more profitable to focus on one product and easier to also provide a quicker customer experience so everyone should be a winner. I expect over the years firms will need to offer a few more options, plus there will be consolidation in the cloud accounting market.
Each Cloud product is also racing to build the best app environment to enable linking in of other data sources as well as outputting data to tools. For instance automatic bank feeds from various banks (they all have different standards) and companies offer various reporting options or workflow apps etc.
You can, therefore, build a collection of apps to achieve your requirements, whether this will be achievable from recommendations and implementation from your traditional accountant or you will have to build yourself is another issue.
If you are looking for a Professional services firm focused and looking at your points, you WIP will be linked to projects I assume so you would need an accurate project and resource management capability. I think this would be outside the scope of the 3 cloud solutions mentioned wihtout an 3rd paryt app approach. Corporation Tax you will find hard to achieve this, this is what your accountant is there for to compute.
One could setup a Chart of Accounts and business rules to achieve a good yard stick if you business was straight forward. VAT should be easy to track with all of those systems and be simple to review and accurate, again your accountant will probably need to review the 1st year. PL should be a standard function.
Regarding point 4 I do not have a strong opinion on this I am looking forward to see MS Dynamics Financials released into Europe which is a mid-tier product, also Sage Live looks good (well the Video marketing is!)
I do not think Company House names have much bearing on your actual trading name or brand and only check that your legal company name is not the same as an existing name or contains any regulated words such as BANK and INSURANCE.
Trademark your trading name with the IPO it costs £200 and takes 3 months. Once submitted for approval, the TM will be back dated to the date applied.
Write to your competitor to make them aware of passing off protection laws, once your TM is approved then I think the law is a lot easier to enforce on your side for infringement of registered TM and he will have to trade under a different name, albeit his company registered name will likely be unaffected.
I think you should also ask how these 11 imagine running the company from a statutory point of view, if it was just an off the shelf setup and articles etc.
If you had 11 directors it sounds like a total nightmare a few months in.
You would need potentially some huge legal arrangements around shareholdings and running the company I suspect.
Hi Tom123 I would recommend you check out the following mid-tier solutions which I have looked at, they can be cloud or hybrid cloud server setups I believe. They might give you some ideas on what processes and reporting you could make further time savings on.
Aqilla - Which is a very affordable version of SUN accounts you could get a 10k system (inc Consultancy day setup as the main cost) that can do what a 100k install could do.
AccountsIQ - This also looks a good system that can handle Multi currency and Groups really well. Again I think that is probably about 10k mark inital cost I recall.
Sounds expensive but if it eliminates the need for a headcount...
However I am sure Sage have an upgrade in your ball park like others have said. Bank feeds should be an easy win to get sorted out quickly.
QB and Xero would be a step back I expect, I think the UI is good for making life easy for Business owners but for someone like yourself who just wants to smash through a bunch of complex double entry you need something that enables you to get straight to the heart of the ledger.
My answers
Thankyou
Hi, firstly good luck! Bit too much down to earth thinking here, so thought I would try and lift the mood!
I think you need to start off by producing your own target income required to survive i.e. pay for rent/mortgage and pot noodles, and then work out how much you need to borrow and the number of clients you will need to gain over 12+24 months at various price points and see how realistic it is under various scenarios.
Acquisition costs, make up some numbers for your scenario analysis, as you can only really find this out by doing. If you are super social media savvy you might be able to get by on a shoestring otherise there are specialist who will charge you £500 a month to handle all that. Website say £1k, then as above £2-8k on other bits and bobs related to promotion.
Software and IT you could probably spend £50-200 a month on.
Your best bet, in my opinion, if you are technically capable already is to look at Tax Assists Franchise. Its a 40k initial fee and then about 9% of income and you would need to lease a property, but its a proven model you are paying for with a pre-built IT, marketing and operations platform.
There aqusition costs are very good on paper but you will have to speak to them to get the info. From your lack of knowledge about your own firms PL I think you have a whole area of unknowns and risks which this setup would mitigate to a large degree.
I attended one of their workshops and they are a smart operation. My available areas were pretty poor though, and you really need to believe in the high street shop model, which I think does work but not for me at the moment.
You can borrow 70% via banks to finance it, so lets say you would probably need about 20k in personal savings and 45k loan to cover the fee and other startup costs and Working Cap. You can hit 250k in year three or four.
Most traditional accountancy practices are not tech natives nor do they probably have the skill set to manage the nuances of many different off the shelf cloud accounting packages. If you are referring to Crunch Accounting then they were founded by a technologist rather than an accountant and are the business model of the the future in my opinion.
A traditional accountancy practice will build their internal workflow around a single core product due to internal skills limitations, and the software providers also offer incentives for building up the user base.
This will include marketing contributions and have hurdle rates for lower cost per license based on user base (which does not need to be passed to the client!).
Therefore it becomes more profitable to focus on one product and easier to also provide a quicker customer experience so everyone should be a winner. I expect over the years firms will need to offer a few more options, plus there will be consolidation in the cloud accounting market.
Each Cloud product is also racing to build the best app environment to enable linking in of other data sources as well as outputting data to tools. For instance automatic bank feeds from various banks (they all have different standards) and companies offer various reporting options or workflow apps etc.
You can, therefore, build a collection of apps to achieve your requirements, whether this will be achievable from recommendations and implementation from your traditional accountant or you will have to build yourself is another issue.
If you are looking for a Professional services firm focused and looking at your points, you WIP will be linked to projects I assume so you would need an accurate project and resource management capability. I think this would be outside the scope of the 3 cloud solutions mentioned wihtout an 3rd paryt app approach. Corporation Tax you will find hard to achieve this, this is what your accountant is there for to compute.
One could setup a Chart of Accounts and business rules to achieve a good yard stick if you business was straight forward. VAT should be easy to track with all of those systems and be simple to review and accurate, again your accountant will probably need to review the 1st year. PL should be a standard function.
Regarding point 4 I do not have a strong opinion on this I am looking forward to see MS Dynamics Financials released into Europe which is a mid-tier product, also Sage Live looks good (well the Video marketing is!)
I do not think Company House names have much bearing on your actual trading name or brand and only check that your legal company name is not the same as an existing name or contains any regulated words such as BANK and INSURANCE.
Trademark your trading name with the IPO it costs £200 and takes 3 months. Once submitted for approval, the TM will be back dated to the date applied.
Write to your competitor to make them aware of passing off protection laws, once your TM is approved then I think the law is a lot easier to enforce on your side for infringement of registered TM and he will have to trade under a different name, albeit his company registered name will likely be unaffected.
I think you should also ask how these 11 imagine running the company from a statutory point of view, if it was just an off the shelf setup and articles etc.
If you had 11 directors it sounds like a total nightmare a few months in.
You would need potentially some huge legal arrangements around shareholdings and running the company I suspect.
Is an LLP more suitable?
Hi Tom123 I would recommend you check out the following mid-tier solutions which I have looked at, they can be cloud or hybrid cloud server setups I believe. They might give you some ideas on what processes and reporting you could make further time savings on.
Aqilla - Which is a very affordable version of SUN accounts you could get a 10k system (inc Consultancy day setup as the main cost) that can do what a 100k install could do.
AccountsIQ - This also looks a good system that can handle Multi currency and Groups really well. Again I think that is probably about 10k mark inital cost I recall.
Sounds expensive but if it eliminates the need for a headcount...
However I am sure Sage have an upgrade in your ball park like others have said. Bank feeds should be an easy win to get sorted out quickly.
QB and Xero would be a step back I expect, I think the UI is good for making life easy for Business owners but for someone like yourself who just wants to smash through a bunch of complex double entry you need something that enables you to get straight to the heart of the ledger.
Thanks, I'm sure there is no argument for them being anything but separate. I need to revisit VAT groups!