Administrative work before bootstraping a startup

05 January 2014

I wanted to build a SaaS web application for a long time. Having the opportunity to focus and work on a single product that many people use has always been quite tempting.

There are mainly two reasons for this:

  • I could produce much higher quality work when I work on a single long-term project in comparison to when I work as a consultant for a number of clients simultaneously. Being able to focus on a single project has rarely been the case with most of my past employers.
  • I would have much more freedom with regard to the project schedule in comparison to when I work as a consultant.

I would expect that most companies that make the transition from a consultancy to a product business, do it for similar issues.

Because of this I decided to create a company and try out an idea for an application I have had for a long time.

As a supporter of the Lean Startup movement, I also think that one has to validate their idea before diving into implementation. Talk to prospective customers, figure our their pain, bounce ideas, collect feedback, and more. Many people have written about issues with their businesses exactly due to failing or skipping the validation phase.

Nevertheless I think it is just as important to immediately start working on all administrative tasks to do with operating a company in parallel while building your MVP and validating your idea. There is no other validation for a product than having a customer leave their credit card details on your application website. In order to do that properly, you need to have an operating company as well as a payments processing functionality in place.

In my experience, this involves:

  • Registering a company;
  • Finding an accountant;
  • Registering with the tax authorities and for VAT;
  • Learning how to produce invoices to local and foreign companies;
  • Producing "Terms of Service", "Privacy Policy" and other required pages for your web application;
  • Registering with a payments processing company;
  • Activating a live account with the payments processing company.

Although all these tasks are straight-forward, they take a lot of time. It is very easy to lose the momentum of developing your application, while dealing with administrative work necessary for the app's operation.

Here is a short timeline for my first product:

  • Registering with a payments processing company - May 2013;
  • Registering a company - July 2013;
  • Starting the activation process with Paymill - September 2013;
  • Producing my first local invoice - September 2013;
  • Paymill account successfully activated with BGN currency - November 2013;
  • Receiving a company VAT registration - December 2013;
  • Paymill account successfully activated with EUR currency - January 2014.

In my case, it was my fault for delaying most of these steps, due to the fact that I am currently living in Austria, and my company is registered in Bulgaria. Nevertheless most of the tasks did take more time than I expected, resulting in weeks of waiting.

In conclusion I would recommend to anyone who has interested in building an online business, to go through these steps as soon as possible, so that they have less administrative tasks to perform the moment they find and validate the idea, they want to pursue.


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