Taking my business forward. How and do I need to rethink?

[flanajb]

There's an old saying:"In a goldrush, be the person selling the shovels." And it's true: they're the people who make the bulk of the money, because they meet a pressing need at the minimum risk for the greatest return. They were the bussiness analysts and accountants and business 'angels' of the Klondike.

I like that saying. One that I could learn a lot from!

Flanajb

There may be something in this for you. You mentioned in one of your posts that some of the inspiration for this was the use of concrete technology more usual in the US and Australia, you used an acronym I was not familiar with but I assumed it was glass fibre reinforced concrete. I drew this conclusion based on havinf watched an episode of Grand Designs Australia where large panels of this were used in the construction, so maybe I am wrong. There have been many examples of people transferring an idea from one country to another and making a chunk of money, the most notable route being from the US to the UK. If you have invested the time to get to grips with how you can use a superior technology / product in a application where it has not been used before then maybe that is the USP you need to make a successful business, rather than looking at the product design.

You mentioned products for architects before and maybe there is something in this. Concrete is a popular product in many areas these days and if you are able to produce items with superior strength for example then maybe you can produce one-off bespoke items that need this extra strength? Instead of selling directly to end consumers your target market would be specifiers and architects. If you read magazines like Living Etc. for example you will often find homes where a clever designer has taken off the shelf kitchen carcasses / cabinets as a the base for a kitchen but used high end handles, worktops, etc. to given a much higher end look (I mention Living Etc. rather than some of the more high end magazines as they often feature aspiration all types who want the full look but can't afford to go to a top end provider for every aspect).

Anyway, sure you get the idea, but thought it worth mentioning.

Terry.

I think you are correct there Terry. I feel as though that with clocks and lamps you are competing in a very tough market. A market where it is easy to have mass produced items shipped into the UK from Eastern Europe and the Far East. Trying to compete there is pointless. In fact, I will tell you that not long ago I saw that exact same lamp being advertised on Ali Express for $30 it was basically a company in China offering to make copied concrete lamps for nothing. All you had to do was to agree to buy 1000 of them in one go.

Taking the wall panels / custom sinks and other made to spec item idea, the above is not easily done. For one, volume and lead times will usually mean the item has to be made here in the UK. That is a better business to be in. Funny, but I have just demoulded the first 36" * 18" custom made wall tile that I am planning on using to tile a feature wall in the kitchen. The panels will be fixed to the wall with stainless steel bolts. Very industrial looking, but a different feature. I also agree that architects and specifiers are a better option as a customer as if you do a good job there is no reason why you will not end up with repeat business. Retail customers who buy a clock or lamp are probably only going to do it once.

 

[BearTricks]

I'll be completely honest. I hadn't seen the lamp you used as inspiration and I thought yours was a good design. If I did know of the prize winning one, then saw yours in a store I would automatically think that it was a knock off.

I don't say that to insult you. I appreciate good design but unfortunately I can't always afford it so I do a lot if shopping at discount places like TK Maxx etc. Even in places like Next, John Lewis etc I will invariably spot products that clearly have taken design elements from more expensive brands. Occasionally I'll see a complete rip off. It always irks me because I imagine some executive sat in a board room trying to figure out how they can capitalise on someone else's idea.

I don't think it's plagiarism but it doesn't matter what someone on a forum who has read your process and understands it thinks. You yourself were the one who said the word first so you must have some fears about people misinterpreting your intentions.

It's okay saying that you took the design and made it more minimalist, but the people who would buy the lamp to sell in stores like John Lewis will be aware of the original one, and the designers of the original lamp will invariably find out about it. It will be up to JL whether they want to risk selling something that could bring them legal issues and up to the aforementioned designers whether they have enough to bring a copyright lawsuit to you. As I said, at that point they won't care about any good intention you had.

I think that the upside is that you can tweak the product further. If anything I think it could be more minimal. It won't take much to take it to a place that is more your own. You clearly understand the materials and techniques so use your knowledge to your advantage.

Sent from my LG-H815 using Tapatalk

 

[Lons]

" ... there is a very real difference in quality between jeans from Primark and Levis ..." - Bob

It shouldn't be an automatic supposition that because you pay a lot, the quality is better - I buy jeans from a cheap outlet for £15 for two pairs - they are way better made than the Levis 501s I was paying £50 a pair for thirty years ago.

I wasn't trying to say there was Phil and in fact did suggest that I won't pay retail in the UK. But there is very definitely major quality difference between Primark and Levi.
It isn't just quality either. I bought cheaper end jeans from various places specifically for work and still wear then in my workshop. What is obvious is the difference in fit sometimes and I'm roughly standard size. The best I found was a range at £9.50 from an M&S factory outlet.

I also said it was not a good example to compare with the OP products.

last time in the US enabled me to buy a dozen pairs of Wrangler / Levis for around £18 a pair so it's the market here which is being exploited, what I was trying to say I suppose it that they built that market over time and maintained it by target marketing and volume sales. The OP doesn't have that and his products are unlikely to achieve high volume but rather niche, high price and have to be presented correctly to have a chance.

 

[flanajb]

[I keep reading all of these posts and really appreciate the time and effort people have put into their responses. It has been an eye opener for me and whilst I have found some of it very disheartening to read, it has been a wake up call that the business is not a viable income generator. Especially, considering my monthly outgoings. At the moment all of the items I have made (pretty 2-3 of each product) have been made in my garage. If I then factor in the expense of renting a workshop, business insurance ... the whole model becomes even worse from a revenue generation perspective. Having my own business has always been a dream of mine, but I think I need to remove my rose tinted spectacles and realise that in reality it can be one big ball ache and I am not sure that is the road I want to venture down.
..

One aspect you may not have factored into the equation of self employed viability with enough background information/knowledge is the financial accounting and tax, (both liabilities and allowances) I would suggest before you get too disheartened you seek some advice on this score and set yourself a timescale to research the 'Business' aspects in depth rather than the product production.

As a self employed individual with a good accountant advising what is legal on your profits and loss accounts it is not unknown to have a reasonable income and virtually no personal tax liability.

A good accountant can save you many hours of heartache and 10 X + their fees in lost income.

Will you be operating totally 'on your own' or will your wife/partner/sibling be there to take on the 'office' duties whilst you concentrate on production? invariably self employment becomes a 24/7 commitment for the whole family, keeping the 'value added' within the family helps considerably in efficiency and moral support.

Personally I would say whatever you do, do not factor your family home into the financing of your enterprise.

Thanks Chas. Plan was/is to create a limited company. It shields our personal assets. Have even looked into selling my personal tool collection to the wife (she is considerably under tax threshold with her part time job) and then leasing the machines to the ltd company for a monthly fee.

 

[custard]

It's okay saying that you took the design and made it more minimalist, but the people who would buy the lamp to sell in stores like John Lewis will be aware of the original one, and the designers of the original lamp will invariably find out about it. It will be up to JL whether they want to risk selling something that could bring them legal issues and up to the aforementioned designers whether they have enough to bring a copyright lawsuit to you. As I said, at that point they won't care about any good intention you had.

Bear Tricks has nailed it.

It's a fair bet that any buyer for a large chain store will be aware of the originals, so they won't touch yours for fear of a "cease & desist" letter dropping on their door mat. You may think you've done enough to evolve the design, I'm no Intellectual Property lawyer but my guess is that you're not nearly far enough away to be in the clear.

I've met a reasonable number of designers and they're all over the place when it comes to defending their copyrights. Some shrug their shoulders and say that's life, others are like rottweillers and seem to dedicate their lives to IP litigation. One thing's for sure though, if (and it's a mighty big if) you were ever to earn any real money then even the most laid back designer would sniff the cash and come after you. Do you really want to bet on a business that has minimal earnings prospects, but comes with a high chance of a ruinous lawsuit in the unlikely event that it does succeed?

 

[Wizard9999]

You may think you've done enough to evolve the design, I'm no Intellectual Property lawyer but my guess is that you're not nearly far enough away to be in the clear.

I think that is a good point Custard and while I think Flanajb is moving away from the idea of the lamps and clocks being the future for his business as this thread is getting pretty big it may be a useful point as the thread may get picked up in the future.

I am not a lawyer either, but if I understand these things correctly they way it is looked at is not in the round but rather more on a point by point basis. So in the context of music (where such cases have had a reasonable amount of publicity) two songs may not be similar, but if there is a passage of several notes that has appeared in a prior song then I think if there is money to be had then this gets picked up upon. So, if my understanding is correct despite the other changes you have listed previously it may be that you could be challenged because your lamp has bent plywood intersecting a round concrete base. Again, I realise your thinking has probably moved on, so I mention it more for future reference if this thread pops up.

Terry.

 

[Wizard9999]

[I keep reading all of these posts and really appreciate the time and effort people have put into their responses. It has been an eye opener for me and whilst I have found some of it very disheartening to read, it has been a wake up call that the business is not a viable income generator. Especially, considering my monthly outgoings. At the moment all of the items I have made (pretty 2-3 of each product) have been made in my garage. If I then factor in the expense of renting a workshop, business insurance ... the whole model becomes even worse from a revenue generation perspective. Having my own business has always been a dream of mine, but I think I need to remove my rose tinted spectacles and realise that in reality it can be one big ball ache and I am not sure that is the road I want to venture down.
..

One aspect you may not have factored into the equation of self employed viability with enough background information/knowledge is the financial accounting and tax, (both liabilities and allowances) I would suggest before you get too disheartened you seek some advice on this score and set yourself a timescale to research the 'Business' aspects in depth rather than the product production.

As a self employed individual with a good accountant advising what is legal on your profits and loss accounts it is not unknown to have a reasonable income and virtually no personal tax liability.

A good accountant can save you many hours of heartache and 10 X + their fees in lost income.

Will you be operating totally 'on your own' or will your wife/partner/sibling be there to take on the 'office' duties whilst you concentrate on production? invariably self employment becomes a 24/7 commitment for the whole family, keeping the 'value added' within the family helps considerably in efficiency and moral support.

Personally I would say whatever you do, do not factor your family home into the financing of your enterprise.

Thanks Chas. Plan was/is to create a limited company. It shields our personal assets. Have even looked into selling my personal tool collection to the wife (she is considerably under tax threshold with her part time job) and then leasing the machines to the ltd company for a monthly fee.

As said, good professional advice can more than pay for itself. I am not an accountant, but I do have a limited company so have some personal experience / benefit of advice from a good firm of accountants. Three things I would highlight.

1. The most basic benefit of having a limited company comes down to the fact that companies only pay tax on profit whereas individuals by and large pay tax on revenue (though they know this as gross earnings), so the costs of running a company are generally paid out of pre-tax income whereas the costs of being an individual are generally paid out of post-tax income.

2. Extract profit from a company has always been beneficial because you can use both salary and dividends. The usual way to do this was to pay a salary large enough to get NI credit but small enough that no NI or income tax needs to be paid, then pay the balance in dividend which (taking account of the associated tax credit) meant no additional income tax to be paid y the person receiving the dividend. If you have a spouse with an income below the upper tax band then you could balance the share holdings so they also topped up their income to the upper tax threshold with no additional tax to pay - in technical terms this is called 'income shifting' and has been tested in court and ruled completely legal.
But, the government has now said too many people are incorporating in order to take advantage of this benefit (I will not bore with a one man debate on whether this is reasonable or not). The result is that from April the old tax credit system will fall away and a new tax rate of 7% on dividends will apply above a threshold level, which if I recall correctly is £5k (and remember your company will already have paid corporation tax of 20% on its profits). So the old benefits of using dividends ilo salary will not be as good as they have been in the past.

3. Anything funky, like selling items to your wife and leasing them back may fall foul of the relatively new general anti-avoidance rules. If there is not a clearly defendable business reason for doing this and the only benefit is a tax one chances are it will be deemed tax evasion these days. I know this as I have tested some rather esoteric legal structures I have thought about with my accountant and they have been quick to warn of this issue.

I am not an accountant or tax adviser, this is not advice, rules change over time, you need to get professional advice specific to your situation, etc., etc.

Terry.

 

[flanajb]

The irony of all of this is the comment below from the web page detailing the "Benjamin Hubert Desk Lamp"

http://www.dezeen.com/2009/09/21/heavy-desk-light-by-benjamin-hubert-for-decode/

"I commend the designer on his prolific output for the London Design Festival. However, it seems these and the lampshades are somewhat lacking in original content. As pointed out above, these have a 'very similar spirit to desklamp by Ilse Crawford' . I question whether this is spirit or more-so that these, the lampshades and the chair are derivative of other projects. The over-riding feature of all 3 pieces is that the designer is driven by an application of current and borrowed styles rather than experimenting and finding their own feet. I commend the output but these projects feel like they came from a mood board of other projects published in the last 18 months."

 

[CHJ]

Thanks Chas. Plan was/is to create a limited company. It shields our personal assets. Have even looked into selling my personal tool collection to the wife (she is considerably under tax threshold with her part time job) and then leasing the machines to the ltd company for a monthly fee.

Machines are assets with a depreciation factor to be set against taxable profits, avoid 'clever' avoidance tricks, there are a host of legitimate 'costs' to claim, wife can be paid an income as long as you can justify her time commitment if challenged, log her hours against paperwork/transport time/supplies sourcing/product research just keep it believable, don't claim 10 hrs a week on the road or excessive vehicle maintenance and only put £5.00 worth of fuel in the car a week and no parking fees, finite details are rarely needed or indeed achievable.
Just be aware that if she does not currently have to do a self assessment she, (or your accountant on her behalf) will need to do so in future.

Again a good accountant earning respect and fees should provide feedback on stuff you've missed.

Edit:- above better put by Terry a couple of posts ago whilst I was procrastinating.

On the plagiarism aspects, all manufactures and designers study their rivals products, you see all sorts of things from cars/washing machines/printers/machine tools/weapons/TV's/engines from rival producers hidden in the back of test/research labs. They will tell you they are protecting their patents or design copyright, but they don't exactly ignore innovations if they can benefit.

What they don't do is tell the world that they have studied a rivals product and using it as a design aid are producing a better version of their own.

 

[flanajb]

You lot may think I am nuts, but I decided the best way to see whether as copyright is being infringed is by emailing photos of my lamp to the company making 'The Lamp' telling them I have a revised and better version!

If there is an issue, I am sure I'll get a solicitors letter.

 

[Roughcut]

Thanks Chas. Plan was/is to create a limited company. It shields our personal assets. Have even looked into selling my personal tool collection to the wife (she is considerably under tax threshold with her part time job) and then leasing the machines to the ltd company for a monthly fee.

Hmm I would advise taking some professional accountancy advice on that one, and/or a phone call to HMRC.
Because I'm fairly sure going down that road would be frowned upon.

 

[flanajb]

Thanks Chas. Plan was/is to create a limited company. It shields our personal assets. Have even looked into selling my personal tool collection to the wife (she is considerably under tax threshold with her part time job) and then leasing the machines to the ltd company for a monthly fee.

Hmm I would advise taking some professional accountancy advice on that one, and/or a phone call to HMRC.
Because I'm fairly sure going down that road would be frowned upon.

If that one is frowned upon, I am sure I can sell my tools / machinery to the business OR at least offset an allowance for their use.

 

[Cordy]

Not read all the posts on here; 7 pages now :| but forming a ltd company and not a bean sold........ hmmm
Been self employed since 1967 btw

It's quite easy to do my own tax returns -- not had an accountant for years

 

[MIGNAL]

You lot may think I am nuts, but I decided the best way to see whether as copyright is being infringed is by emailing photos of my lamp to the company making 'The Lamp' telling them I have a revised and better version!

If there is an issue, I am sure I'll get a solicitors letter.

That may tell you if they aren't interested. It won't tell you if it's an actual violation of copyright. Surely that would have to be decided in court, even if you do receive a solicitors letter.

 

[Mr_P]

You lot may think I am nuts, but I decided the best way to see whether as copyright is being infringed is by emailing photos of my lamp to the company making 'The Lamp' telling them I have a revised and better version!

If there is an issue, I am sure I'll get a solicitors letter.

Not nuts, just incredibly naive on far too many aspects of running a business.

 

[Inoffthered]

1. Absolutely not true! A sole trader/partnership pays tax only on profits NOT on gross earnings. The reason limited companies are attractive vehicles to run a business (apart from the benefits of limited liability) is that corporate taxes are taxed at 20% whereas profits in the hands of a sole trader or partner are taxed in accordance with the personal bandings.

Profits for tax purposes start with the profit shown by the accounts and are then adjusted for disallowable items such as depreciation, entertaining which are added back to profits. Taxable profits are then reduced by any capital allowances/Investment allowances that may be be available.

As a sole trader expenses incurred in the performance of your business are allowable as a deduction from profits. Of course, any drawings taken by the sole trader/ partner (or personal , non business expenses paid by the business) are an appropriation of profits not a business expense. By contrast, wages and salaries paid by a limited company are an allowable deduction for tax purposes.


3.Again, I disagree. There is nothing to stop an individual charging a limited company (which is a separate legal entity) for the use of personal assets providing the income received appears on that individuals self assessment tax return. Providing the charge for hiring the assets is not excessive then HMRC would, imho, struggle to challenge it. A director/shareholder of a company is not compelled to make personal assets available to a limited company for the purpose of its business on a foc basis.

Selling the assets to a wife may raise an issue if HMRC deemed the transaction to be akin to running a trade in which case they may claim that any profit on the sale was taxable but this could probably be avoided if the tools were gifted to the wife.

 

[Sheffield Tony]

Quick point of order, copyright does not apply to 3D designs. Design rights are the thing to look at. They are not such strong protection as either patent or copyright, and vary by country.

 

[Mr_P]

http://www.furniturenews.net/resources/ ... ng-designs

We have never come across a case of design copying where the drawings or design documents were used to create a competing product. In every case the infringer takes the finished product and copies it, perhaps in the process trying to make sufficient changes to it to argue that it has created a different product. It seems odd, therefore, that the criminal offence of copyright infringement is committed in unrealistic circumstances, whilst the true harm is not criminalised.

Whilst we welcome the criminalisation of registered design infringement, the vast majority of new furniture is not registered and is thus protected only by unregistered design right, and not protected by the criminal laws at all. Flagrantly infringing a creation protected by copyright or trade mark law in full knowledge of the infringement constituted a criminal offence punishable, in theory at least, with a prison sentence of 10 years. However, copying a design was something that only the civil courts could deal with.

 

[doctor Bob]

Plan was/is to create a limited company. It shields our personal assets. Have even looked into selling my personal tool collection to the wife (she is considerably under tax threshold with her part time job) and then leasing the machines to the ltd company for a monthly fee.

I'd be looking at selling something before I even worried about Ltd or sole trader.

Concentrate all your efforts on selling to get some income before doing anything else. The rest will fall into place as you go along. No sales = no business.

 

[flanajb]

Tail between legs. Have decided it's way too much ball ache to carry on with this. I might dabble, but on the side.

The copyright thing is just another nail in the coffin for me.

IT contracting at £500 / £600 a day seems like less of a hassle. Shame, as I enjoy being creative (copying) ;-)