Welcome to the area where I feel I’m swimming rather than standing on firm ground. Thankfully, I have advisors for this, but I’m still the person who needs to make the decisions. Let’s dive into the swimming-pool: it’s called Starting a Company, in the city of Oh-My-God-Is-It-Really-A-Good-Idea-To-Blog-All-This.
I have one event underway, Going Solo. If all goes well (and I intend it to) this will be the first of many — whether they cater to the same audience or not is still something I’m thinking about. So, I want to create a company which will be behind these events. Good for branding, allows me to bring in partners, pay myself a salary, etc. (Actually, I realise now that I’m not 100% sure why it’s a good idea to create a company — I’m sure it is, but I have trouble explaining it. Enlightened comments welcome.)
This company has a board of advisors. I haven’t drawn up any contracts or anything yet, but we have verbal agreements. I do want to get things down on paper, though. In French, we say les bons comptes font les bons amis, meaning that keeping money/business issues clear and clean preserves friendship (or makes it, depending how you understand it).
I need to incorporate the company, too. I live in Switzerland, I’m a British-Swiss dual citizen. In Switzerland, to have an “SA” company (the equivalent of an Ltd.) you need to show up with 100K CHF on the table. Even an SàRL requires 20K. From what I hear, it costs virtually nothing to set up a company in the UK. My focus is events on the European market, so basically, I see no real reason for the company to be Swiss. I’m no specialist of these kinds of decisions, though, so I’m basically listening to what people tell me and reading up here and there.
It seems to me that the simplest thing to do is to set up the company in the UK. I could have a subsidiary (? = succursale) in Switzerland, but again, I don’t understand how this makes things easier. (This isn’t making me look good, is it?)
I’m also not sure what happens with my “independant” status in Switzerland. I’m not going to stop being “independant” because I set up the company (ie, not looking at becoming a full-time employee of my company yet), so is there a way I can preserve this — it’s particularly important from a tax point of view, for example.
Then, advisors. I want the advisors to the company to have a (small) financial stake in it (I think that’s rather common), so I need to write up agreements for that. Do I need a lawyer (eeek)? Can I just do it myself? How do I know what to write in it? I’m a bit uncomfortable about saying who the advisors are publicly before the formalities are done — am I worrying for nothing?
Which also brings up another issue: many people around me are being very helpful by providing their advice and support. But if I bring them all onto the advisory board, as I’d be tempted to do, that means I’m going to have a (possibly) important amount of very little shareholders, which can create trouble if I want to bring partners into the company, or investors, or sell (they have to approve, don’t they?) So, can I have two kinds of advisors — advisors with a financial stake in the company, and others without?
Those of you out there who own companies with advisory boards or who are on advisory boards — would you mind telling us a bit more about how this works? And this is Europe, not the US (in case it changes anything — I suspect it does). Also, should I set up the company now, or wait until the first event is done?
Same kind of questions about partners. At the moment, there will be three of us doing the bulk of the organisation of Going Solo. We’ll be subcontracting other companies or individuals for some pieces of work, of course (any tips about where to go shopping for Wifi That Stays Up, by the way?) So, as far as Going Solo is concerned, we can draft out an agreement between the three of use to determine how much and how we get paid for our work, and what happens with any extra money we might have (ok, might be dreaming here). If this first event goes well, and we’re happy working together, it could make sense to have them enter the company, wouldn’t it? (This is where the when-how-howmuch stuff comes in, but I’m aware we’re not there yet.)
So, maybe my question is this: what are usual models for paying people who organise events? From what I’ve heard, bringing in sponsorships should earn you a cut of what you brought in, though it gets complicated when the sponsorship in question is not just cash, but covering the expenses for certain parts of the conference, or bringing in goods/services. It also gets complicated if the event doesn’t make as much money as planned, or makes a loss — should the person in charge of the sponsorships be paid while others are not? So many questions.
Also — trademarks? Do I need to trademark anything?
Any pointers, advice, or opinions that can help me see clearer here will be most welcome.
I think the kind of advisor you need first is someone familiar enough with Swiss law to answer your independent status questions, and the company incorporation questions. There’s also a need for insurance advice related to events – I’m sure someone in Switzerland could help you with insurance questions 😉
As to the size of the advisory group and how they’ve got ‘skin in the game’ or ‘money on the table’ remember that an advisory group is only as useful as your ability to use it as such. I’ve found that with one organization where I’ve been on the Board of Directors, the size of the board >30 means that it’s tough to know everyone, and that we didn’t get utilized as well as we could have by the director. Each relationship is something that has to be maintained, as well as tapped. Keep that in mind, or you’ll find your board, advisors, etc may lose interest.
OK…on incorporating in the UK – great idea and if you’d like a UK registered office, I can sort you out in Leeds at the prestigious Old Broadcasting House!
Companies House (http://www.companieshouse.gov.uk/) and BusinessLink are good places to start for advice on the mechanics of incorporating. It shouldn’t cost more than £50 and a few working days to setup.
For your board structure I’d keep your ‘recruited’ legal directors (non-executive directors) of the company to 2-3 non-executive directors at a maximum, maybe with 5% equity stakes to begin with. One of them should be a good administrator or company secretary.
However, an advisory board doesn’t have to be compensated or a legal entity. It’s basically a mechanism of adding friends and helpful advisors of the company…exposure in return for access to knowledge. I wouldn’t make them legal directors.
In compensating your staff…purely performance-based is sorta harsh! Give a mixture of a fixed fee based on their time-input and then a bonus based on the success of your event. That way everyone gets paid fairly for their effort, but you can share a huge success equitably too without people going hungry!
Je ne peux rien te dire de précis, car je ne m’y connais pas, mais je pense qu’il vaudrait mieux que tu aies recours à des pros pour te conseiller. Soit tu consultes un avocat (c’est pas une idée bête, tu veux pas te retrouver coincée par le fait que ta compagnie est britannique pour une raison qui t’étais inconnue), soit tu consultes qqn qui a une compagnie en Suisse (ce que tu as probablement déjà fait) ou un genre de comptable, de consultant en entreprise, enfin, bref. Qqn qui est calé.
En général, pour la rédaction de contrats ou de tout genre de documents légaux, tu ferais mieux de faire réviser ça par un avocat.
Pour les impôts et ton statut de freelance, c’est pareil: un comptable serait pas de refus. Au Québec, je ne suis pas sûre qu’on puisse être proriétaire d’une compagnie ET freelance. Mais peut-être que, comme tu dis, si on n’est pas un salarié à temps plein, c’est autre chose.
Donc, pour résumer tout ça, si j’étais toi je me “surinformerais”, quitte à avoir des frais inutiles. Ça peut te sauver la mise et te donner des infos auxquelles tu n’as pas pensé parce que tu ne connais pas le domaine légal ou le domaine des affaires.
Et si les pros sont hors de prix, pourquoi ne pas essayer d’avoir recours à des étudiants ou à des centres communautaires? Ce n’est qu’une idée…
À tout bientôt!
Having a registered company is not a must unless you already plan to hire people or in case you absolutely need it for the image of the event. Also, you may prefer to wait and see the result of the first event (interest, attendees, problems) and make your final choice only then.
Country: not sure if you should decide up front. Note that the Swiss Law will change on January 1st 2008 (Nouveau droit des SA et des Sàrl) including more flexible rules for Swiss ciitzens and foreigners.
Advisory board: why not but if you’re already 3 it may be enough. I’d make the difference between friends just giving you a hand and a formal board. For the latter, you need to define the needs, the objectives, the roles, the outcome of the board meetings, etc, which may require more time and energy than working on the event itself.
Shareholders: too early to think about shareholders imho since you don’t yet have a biz plan. Same for the trademark, it needs to be part of the plan incl. the justification, financial implications, IPR, etc.
In other words, my recommendation is to start small (which should not prevent you from thinking big) otherwise you may end completely overwhelmed with millions of tasks. Focus first on the core aspects of the project (for instance by using SWOT), the rest will come naturally and probably at a later stage.