Peter, First work out a budget ? ie. how much are you going to spend of your income that year ? Are you paying just yourself or other staff ? etc. Also, this is a great time to look at how your personal finances are concerned ? will you be having other income (ie. still working) during this period etc. You are effectively investing in this new venture, so it helps to also approach it from this angle also.
For example : when we started, this is one of the scenarios our accountants R&D group outlined ( this is not my idea, and it can also show how a firm that has experience with software startups can give better advice than a general accountant) : Scenario : If you and your co founders have one or more investment properties that rely on negative gearing (something that basically runs at a loss) or you have income from dividends and you are not going to have income to offset the losses / tax credits against + tax free threshold, it can actually be worth your while to pay yourself. R&D may be claimed on salaries that are a result of developing a product. If you pay yourself (and say any other founders) equal to their losses / available tax credits , and provided you reach the min expenditure for the R&D offset (I don't know if this is still the case for this year), then you personally will have 0 taxable income, but your company can claim the tax credit (which is paid even if you have a loss) against those salaries. That will help the most for year one, but it can help ie. on 30K its an extra 6K (after say accounting costs) (note : you still have the long term liability on the company books). It also depends on the amounts you are investing, and where that money is going to be spent. This wasn't applicable to us, but it did open our eyes as to why understanding how you account for money even from day one can be very useful not just for future evaluations, but also for helping with cash flow. Also, I am not an accountant, so my input should be taken with a grain of salt. I know a lot will depend on your situation, but even if you are investing money from fools, family and friends, knowing how to get the most out of if it is very important. On a side note - this is exactly the sort of question that can help the smaller developers with starting a business and leveraging the learning of others. Discovering the available options and how to use them best is one of the biggest learning curves when first starting. Learning for free is actually very hard, as you will find many people make a good living guarding this information. This could easily be one of the real areas this group can help as a community when it comes to enabling startups by helping others learn how to reduce their up front costs by sharing lessons learned etc. Hopefully those with much more knowledge and experience in this area will be in a position to share their experiences both positive and negative. --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Silicon Beach Australia mailing list. Discussions guidelines: http://groups.google.com/group/silicon-beach-australia/browse_thread/thread/bc43d028e122852a No lurkers! It is expected that you introduce yourself: http://groups.google.com/group/silicon-beach-australia/browse_thread/thread/99938a0fbc691eeb To post to this group, send email to silicon-beach-australia@googlegroups.com To unsubscribe from this group, send email to silicon-beach-australia+unsubscr...@googlegroups.com For more options, visit this group at http://groups.google.com/group/silicon-beach-australia?hl=en?hl=en -~----------~----~----~----~------~----~------~--~---
