My last blog post was about half a year ago, and it’s definitely due time for another one. In general I believe the rate of these will go up now – so stay tuned!

We left the last blog post at – “So I decided to open my first business”.

So I decided to open my first business – For me that meant opening a registered business. I’m not big on long term planning, so I didn’t really know what I’d do with the business, but I just decided it’s time I was registered. Opportunities will present themselves from there. Following my intuition I decided I’ll need accounting services to do this, and will not chance it alone. (Later I was told this was a good call, as you can easily get buried in the bearucracy).

First, I got a recommendation on an accountant for book keeping. Met him, saw we clicked, and decided he’s the one. I’m also not big on market surveys, so there were probably cheaper alternatives, but I like to advance. There’s an accountant I like – let’s advance – no point in meeting all of them to decide. And that was my first expense – 350 NIS a month (not inc.tax), which were lowered to 300 due to being a small starting business, and the fact I was forwarded from a friend.

When opening a business in Israel you get to declare things bought in the last 6 months as intended for the business. So I had to start hunting for any relevant receipt I still had from the last 6 months. There were some computer parts I acquired, apartment bills (electricity, water, property tax, phone, internet, mobile phone, etc.), and I even found a couple of gas receipts on the floor of my car. All this collecting means you start your business in an advantage point – The government owes you VAT back, and you are considered in losses (6 month expenses with 0 days of income) – so you pay less income tax.

Next I had customized receipts ordered. Figured I’m here to sell stuff, so should have receipts handy. Having zero prior knowledge I went to the first online website that provided what I wanted (I wanted to have the company’s logo as a header). That cost 315 NIS (inc. tax) for a set of 6 receipt books, for a total of 300 receipts, most of which I will probably never use (A year later and I’m about half way through the first book, and at some point I’ll switch to computerized receipts).

Following a convention I wanted to attend, I rushed to issue business cards. That was relatively cheap, below 100 NIS for a 100 cards. Business cards are great. It really helps in the first stages to draw a card following a nice conversation – it reminds you that you have a business, and you’re not here for play. I’m just down to my last few cards, which is just right as I need new ones with updated information soon.

So far expenses were minimal, surrounding the above and some more office supplies (envelopes, pens, rubber stamp, stapler, etc.), travel expenses, and Café bills. But I got to a point that stating “I develop iPhone apps” while holding an ancient Sony-Ericson seemed unprofessional. So I bought an iPhone for 3100 NIS (inc. tax). Then I needed a Mac to develop for it, so that was another 4000 NIS including accessories – keyboard, mouse, cables.

Later my laptop-lack became apparent in Café-meetings, so I bought a MacBook Pro for another 7000 NIS. This allowed me to free the Mac Mini to a potential employee if one should arrive, so I felt it was a wise purchase. Of course it also needed accessories like a cool bag, and more cables, so the total was roughly 80 00 NIS .

At this stage expenses were getting higher, but it was in correspondence with the amount of work I got. So the amount of money I had remained about the same, but my equipment kept growing in quantity. Remember that registered businesses get the tax back, which in Israel stands on 16%, so that helped my purchasing power a bit.

The next step was hiring employees, but that’s a subject for a different post. I’ll stop here to not overflow, and would love if you leave me comments below on whether this is helpful at all, specific things you’d like to ask, and general appraisal  :-)

Cheers,

Oded.