This week I started a company. I started it with my girlfriend Laura. Given my commitment to Learning in Public, I thought that the end of a very busy first week might be the idea time to reflect on the progress and on the decision making.
The Company
The company is called Nom Nom Not Ltd. The first product we want to sell is an easy to make vegan brownie mix. As we mentioned on our first instagram post, we have realised how inaccessible vegan baking can be for people, and we are looking to make it easier for everyone, converted vegans or vegan-curious.
Nom Nom Not Ltd is a company limited by shares. In the UK (where we are registered) there are four types of company. The one that most people would be familiar with is Public Limited Company, or PLC. This is the type of company that can be publicly traded and listed on a stock exchange, like GSK and Shell.
The second category is Private Limited by Guarantee. This type of company binds the members of the company by a guarantee which states how much they are liable for in the case of insolvency. Sports or social clubs can fall into this category. Because there is no share structure and no ownership, the company cannot pay out any money it makes, and must reinvest any profiuts into the goal for which it exists.
The third type of company is Private Limited by Shares. All companies in this category must have ‘Ltd’ or ‘Limited’ at the end of the name. They are owned by a specified set of poeple, each of whom own a certain amount of shares in the company. In the case of Nom Nom Not Ltd, there are two shares, and Laura and I own one each. The advantage of having shares over a guarantee is that shares can pay dividends. That is, they can pay out some of the profits that the company makes. Additionally, liability is limited to the value of the company at the time. This is different from a sole trader or partnership, where the business owner’s personal assets are at risk if the company cannot pay it’s debts.
The final type of company is a Private Unlimited Company. These benefit from secrecy as they don’t need to file accounts in the same way as the other companies, but like a sole trader or partnership, there is unlimited liability to the company.
To start a company it needs to be registered with Companies House. It takes a couple of minutes, £12, and a set of articles of incorporation, which Companies House can provide a model of for free. You need to explain who owns shares, who owns more than 25% and less than 50% of shares, and who the director of the company is, as well as the main address of the company. We picked a Private Limited by Shares Company for a couple of reasons. Firstly because we would like to be limited in liability in case something goes wrong, and secondly, because selling shares in a company to an investor is a good way to gain capital needed to scale quickly.
The legal and financial requirements for a small company are pretty limited. As we are very small at the moment, we don’t need to charge VAT, but we do need to pay VAT to the companies we buy supplies from. We need to pay corporate tax at a rate of 19% on our profits, and need to file once a year to confirm that our details on Companies House are still correct. The legislation on food production is stricter. As well as needing to be food safety certified, the company must register with the local council 28 days before starting trading. There are additional rules about sending food products in the post, but as these come from a 28 page document, I won’t bother summing them up here. Finally, the company should be insured, and public liability is the only requirement. This covers the case where a consumer is injured or made ill by your product and sues you. Another mandatory type of insurance is employers liability insurance, but as we don’t employ anyone yet, we don’t need this. We also haven’t currently got property insurance, business interruption insurance, or commercial building insurance, as some of these are covered by home insurance as we are operating out of a private home.
Overall, the legal requirements aren’t complicated, and I’ve learnt a lot on these topics in the last week by filing paperwork and making decisions.
The Product
The first product we are selling is a simple vegan brownie mix. Just add margarine and water, pop them in the oven, and voila, a batch of delicious vegan brownies. We did some research into who our competitors might be, and found ways in which our product could be better. Alternatives were either too complicated (required adding a flax egg), too expensive, or really badly marketed. We think we can fix these easily.
We are currently iterating on the product to try and make it perfect. I am a big believer in the value of doing good work, and a good product does most of the publicity for you. According to a report by Nielsen, 74% of consumers indicate word of mouth as a key influence in their buying habits. So to make a product sell better, just make it really really good.
We will be selling both direct to consumers on our website, and to cafes in bulk so that they can sell vegan treats and snacks. Eventually we would like to be sold in supermarkets, but before that we would like to improve our offering and build a bit of a range, as well as building some brand identity.
On the topic of brand identity, Laura and I have also spent some time defining what we want the company to be, and how we want it to come across. We’ve defined the color schema and style guidelines, and picked four pillar values which we plan on using to guide company decisions. We know it’s very early days to be worrying about brand identity, but I believe that making these decisions now will mean both that later decisions will be easier, and that the company image is more consistent. I also think that it is important for the company to stand for something more than just turning a profit, so that people connect to the message, as well as trying to do more for the world than just sell it stuff. You can read more about our values on our website below.
Technology
The integrations we use are super simple, and make it super easy to run the company. The company bank account was able to be set up online, and linked directly with our accounting software so that payments in and out are automatically imported. The website store has also been automatically connected to the bank account, and orders processed and sent to us. Beyond the accounting, bank, and payment software, we don’t use any more tech, other than Notion which we use for internal organisation. (I’m wary of giving too much info about accounting and banking, but if you are interested do send me an email at contact@callumacdonald.com and I’ll be happy to explain in more detail.)
Conclusion
So far Laura and I have both learnt a lot about how companies work and how to communicate clearly about expectations and output. Visit our website, and follow our Instagram account to keep up with any developments. If you have any suggestions, or would like to work with us to develop the brand, shoot an email over to contact@nomnomnotdairy.com.
Callum Macdonald 