starting a digital Agency (LTD)

Mayoman007

I am going to start a digital Agency, which will offer Web design, SEO and digital advertisement to small businesses, alonside this I will also develop an apllication ethnicfoods.ie (example domain name ).
I will hire an accountant as an empoyee to keep all accounts up to date

Should I start as a LTD company?

if yes, Is there any minimum investment rquired to have in company's bank account?

Thanks

vintagecosmos

Why not outsource accounts and bookkeeping at first to keep costs down. Hiring an accountant full time is expensive enough. You can start off as a sole trader if you want then register later as a limited company.

Probably as well to start as a sole trader. While it's quite easy to buy an off-the-shelf ltd. company, it does come with a lot of responsibility and the annual accounts will be more expensive. As a director, you also have a lot of responsibilities. I've done both - went from a partnership to limited, when we started growing revenue and staff, because of tax. If I was to do it over, I'd go the same way.

If it goes t*ts up, the whole concept of limited liability is not the ironclad protection against debtors on personal assets that I had heard it was.

Also, you don't need to register for VAT until you do €37,500 in turnover as a services company. Could be good to start small and keep your purchases to a minimum, and then when it's working register for VAT and do your big purchases so you can offset VAT refunds against VAT you have to pay.

Finally, it's a cutthroat market that's oversaturated IMO. I've seen the number of businesses in the sector spiral over a decade. There isn't enough business for everyone anymore. You have to be really good (very hard for one person to master all facets of a digital agency, and outsourcing presents other issues), really cheap (you will attract terrible customers), or have a lot of great contacts.

Good luck!

Trojan

Perspective: I've been in this industry for over 12 years.

Don't go full-services agency: pick a speciality (SEO/AdWords/web design). Match that up with a vertical (say solicitors, or clothes retailers, or financial planners) and you become the "SEO for financial planners" company, and marketing becomes a whole lot easier. All things to all people is a tough sell.

Why would you hire an accountant as your first employee? Keeping accounts up to date in your first year should be fairly simple, either sales or a specialist designer/developer or marketing specialist would make more sense.

There's an advantage in the Trading Online Voucher Scheme for non-VAT registered providers (as VAT isn't covered).

You're at a point where you can make lots of choices that will make business easier or harder for yourself. Don't make it harder.

vintagecosmos

Trojan wrote: »

Perspective: I've been in this industry for over 12 years.

Don't go full-services agency: pick a speciality (SEO/AdWords/web design). Match that up with a vertical (say solicitors, or clothes retailers, or financial planners) and you become the "SEO for financial planners" company, and marketing becomes a whole lot easier. All things to all people is a tough sell.

Why would you hire an accountant as your first employee? Keeping accounts up to date in your first year should be fairly simple, either sales or a specialist designer/developer or marketing specialist would make more sense.

There's an advantage in the Trading Online Voucher Scheme for non-VAT registered providers (as VAT isn't covered).

You're at a point where you can make lots of choices that will make business easier or harder for yourself. Don't make it harder.

100% agree on focusing on a particular sector. It's the only way to stand out.

lastusername

Yep, this is a really saturated industry and there are two ways I'd go with it:

1) As Trojan says, stand out by focusing on a particular niche, becoming a specialist in one particular channel. As a one-man operator you can't offer expertise in a variety of areas, so go all-in one one. This alone will really make you stand out!

2) Position yourself towards the mid-higher end of the market (ideally more high end). You'll never make it offering packages for hundreds or even low thousands. Try to aim for 2k+/month for any service you're offering. Of course you need the skills, experience and referrals to support this price.

mneylon

Get a good accountant - yes, but don't hire them as an employee.
Focus on doing one or two things well - don't try to be a "Jack of all trades"

It's *very* easy to set yourself up as a "digital agency", it's not easy to stand out from the crowd and thrive.