Which Business Type for Startup?

[sabian1982]

I'm in the process of launching a small startup business in the aromatherapy niche.

The project is on a shoestring budget so I'm watching every penny - it's taken a lot of planning and sourcing but I'm on target!

Before everything goes live I'm trying to determine the best business type; I could stick with my sole trader approach (at least initially) but my concern is the liability factor (rather than the marketing optics). I've taken every precaution I can think of to ensure the safety of the product(s) being sold but that doesn't guarantee an idiot doesn't misuse the product and then (potentially) apportion blame.

My thought was to go the limited company (ltd) route but my concern with that (given my budget) is the setup and accountancy requirements for that business type.

Secondary to this, changing from a sole trader to a limited company would (I believe) also mean I would then presumably need to update all my packaging to reflect that the business providing the product(s) is a limited company.

Suggestions? Is it best to bite the bullet and just go the limited company route?

 

[fisicx]

Go limited company. Will make your life so much easier if you get sued by someone whose life isn’t transformed after an application of patchouli oil or whatever.

 

[WaveJumper]

Plus making sure you are well covered on the insurance side, should be up there on your to do list, speak to @Frank the Insurance guy if you need any advice on this front. Best of luck with your new venture and keep us members up to date on your progress

 

[Paul Kelly ICHYB]

In your area, limited company with good insurance.

Changing labels is a small price to pay!

 

[sabian1982]

Go limited company. Will make your life so much easier if you get sued by someone whose life isn’t transformed after an application of patchouli oil or whatever.

Thanks for confirming what I already suspected was the right approach. Bemusingly I was literally working on the patchouli product render when you replied - no rest for the wicked on a 3 day weekend.

Plus making sure you are well covered on the insurance side, should be up there on your to do list, speak to @Frank the Insurance guy if you need any advice on this front. Best of luck with your new venture and keep us members up to date on your progress

Thanks, I'll give him a look as product liability cover was already on to existing to-do-list.

When I was considering the business type for my aromatherapy startup, I was in a similar boat. I ended up going with a limited company for the added liability protection, despite the initial setup costs. It's been a good decision so far, but it's always a bit nerve-wracking making these big choices. If you're leaning towards a limited company, it might be worth it in the long run for that extra peace of mind.

Would you mind if I pm?

In your area, limited company with good insurance.

Changing labels is a small price to pay!

It was more a question of limited company or not as I don't want to move forward with branding/labelling until that has been decided (as I don't want to then be having to redo labelling etc). Ultimately its pretty much decided - going the limited company route is the best approach, I just needed that decision validating

 

[HFE Signs]

I would agree, Ltd to start with. The only reason I can see for Sole Trader option would be that if you grew the business you could have the Ltd company owing you a reasonable sum for goodwill, which you could draw at a later date tax free.