Re: [tlug] Re: [OT] Say _no_ to the Microsoft Office format as an ISO standard

[Curt Sampson <cjs@example.com>]

On Mon, 9 Jul 2007, Gernot Hassenpflug wrote:

> So what about the enormous costs of starting up (the law just changed
> and many small business had to spend another whack to change their
> registration)?

This is generally incorrect on both counts (though I welcome corrections
from anybody with a better grasp of the details than I have).

First, if you currently have a Yugen-gaisha, you can keep it,
indefinitely it seems, at the moment. The one-yens have to be converted,
if I recall correctly, but that's always been the case.

At this point, the "standard" way to start a business would be to set
up a K.K. This is a "real" K.K., not a one-yen one, but the capital
requirements have been dropped, so you can start it on one yen if you
like. Depending on how you set up the board of directors and so on,
you can can have minimal reporting requirements, similar to a Y.K.

Bryan and I set up our company under the new laws with 500,000 yen of
capital, and it cost us a hair over about 400,000 yen for the fees and
the services of our scrivner. In addition, we pay something on the order
of 500,000 yen per year in running costs for taxes, accounting services,
and so on.

This is expensive, in part because we worked with English-speaking
professionals who took care of a whole lot of the details for us. If
you were willing to do a lot of the work yourself, and could do it in
Japanese (or have a Japanese friend help you), you could easily cut
those prices in half. It's just a time versus money tradeoff.

However, if you're just starting out by yourself, or you don't mind
dealing with some accounting hassles and attendant risks of going into
business with a partner(s) without a proper joint stock arrangement,
there's no need to set up a company at all: just start sending out
invoices.

> Followed by years and years without income but plenty
> of expenses...

That's up to you. There's no need to run a company that way, and we
don't. I'm certainly making a lot less than I'd be making working in IT
for an investment bank, but I'm not uncomfortable. Steven's remark about
taking a 70% pay cut is dead on, and you'd be suprised at how worthwhile
this can be when you look at your happiness and long-term prospects.
But it can take a while to figure out why and how you'd do this: it's
very much about finding your own way in life, which can be an extremely
difficult task.

> ...(including an accountant and as I understand it basically Windows
> software for the tax accounting)...

This is certainly not a problem if you understand how and why
accounting systems are used, and how and where to integrate them.
Our accountant uses Windows software, but we never touch it; we have
our own independent accounting system we wrote ourselves for dealing
with our financial tracking, forcasting, and invoicing requirements.
This is quite normal: if you think about it, in any company you're
instantly dealing with a minimum of two accounting systems: the one your
accountant uses for your taxes and the one your bank uses to track your
bank accounts. Almost certainly there's going to be a separate expense
accounting system (not necessarially on a computer) for the expense
details, summaries of which get rolled up into the tax system.

You could try to use your tax system for invoicing and so on as well,
and I've seen folks that do it, but far more frequently in Japan, in my
experience, small businesses use a separate system for that. Accounting
systems (in the sense of processes, rather than computer programs) are
designed to be able to reconcile all of these.

> ...every innovative product that is brought into Japan will *not* be
> bought until is is endorsed by several of the Fortune 500 companies,
> by which time its competitive edge is dulled and its cost has gone up
> by a factor of 10 or more.

I'd disagree with that. There are more routes to success than the
obvious ones. You just need to have the acumen and flexability to go
after the good opportunities that come up, rather than being stuck on
one way to build your business.

> There's a lot to be said for the taxation system as I understand it,
> whereby one can juggle money around before tax year end to avoid
> paying any as a company.

I've put a lot of thought into this over the past year or so, and I
disagree, at least for a company our size. I find that, in the end, the
"tricks" you can use do not differ much between Japan and Canada (the
only two places where I've started a business), at least, and there are
a number of other factors beyond how much and from what entity you pay
your taxes.

> I do think this environment would take the initiative out of anyone...

Only if you let it. In this, as in many other areas, most people tend to
do what they're used to. Finding a better way is a hard road, but I've
demonstrated, at least to my own satisfaction, that it's possible.

cjs
--
Curt Sampson       <cjs@example.com>        +81 90 7737 2974
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