I would like to get a discussion going here regarding the expansion of a small business.

For some background info, most of you know that I run Red Giant, my own small design business, with 2 partners. Come the end of this year we are going to be looking seriously at expanding a bit. The business is currently a work-from-home scenario but if we are still doing as well/better than we are doing now at the end of the year, it would put pressure on us to expand into an office and/or employ somebody.

I would like some input on the following topics to do with this subject:

Right Income Point? - Is there some sort of monthly turnover/profit figure I could be aiming for at year end which could indicate that we could afford to expand? Bear in mind we have no real expenses yet. The business costs us our time and on the odd occasion we have to purchase software/components/hosting.

Now expanding into an office would bring all sorts of other expenses such as rental. What are other expenses I can expect to pay should I expand into an office?

Capital reserve? - My guess is that it would be advisable to have a reasonable nest egg saved up should we decide to make the move, in case we run into a tough patch or two. What sort of figure should I be aiming for in this situation.

Home-based vs Separate offices - What are your opinions on these two options?
We are considering renting a house with 3/4 of us (we are young students and can do this) and running an office from a suitable part of the property. What are the advantages and disadvantages of each? Price differences? License requirements? Professional appeal?

What about the location of a separate office? In a centre of some sort or on separate premises?

Considerations when employing somebody? - What are the important things I need to note regarding employing a person?

Who to employ first? - This is a biggie. Would I employ somebody to do admin related work (or a jack of all trades) or would I employ somebody like a professional web developer to enhance the quality of our work? The latter would probably be a lot heavier on the pocket, mind you.

Tax implications? - What are the tax implications of expanding into an office and employing people? For example PAYE - having never employed somebody full time we haven't had to deal with this yet. What do I need to consider in this regard?


Thanks guys. This thread is really just to bounce ideas and opinions off everybody. I've got my own thoughts on all the above, but would like to get a good discussion on any/all of the topics above.

(I was considering creating separate threads, but this one didn't end up too long.)