Recently, I shot a video called “Breaking Up is Hard to Do.” It is about the end of business relationships. However, everyone on my team wanted me to shoot a video on how to start a business instead! Starting a new business is such an area of intrigue for so many. Instead of shooting a video on on how to start a new business at this time, I wrote this blog on it. Maybe I will make a video later, too!
There are many articles, meetings, education classes, and self help books. Resources abound. But, in the most simple, purest, and essential form, I will tell you here the best advice for starting your own business. This advice is based on my experience, education, countless business consultations, management, and litigation on business start ups and partnerships disputes. It is not hard advice and most of it is common sense. But some make it much harder than it needs to be and cannot get started due to information overload. Let me help end that with this advice.
First, people want to know how to raise money and gain investors for their business when they have not even started one yet. I say, “Start with Yourself.” If you have no money or ability to invest in yourself or own business, then why should anyone else? If none of your friends or family will invest in you or your business, why should anybody else? You be willing to invest in yourself and your business.
Second, start small & keep it manageable! See if you can begin business operations, with minimal administrative cost investment like a website, logo and business cards. Do this with the cost of your product or basics to provide services and network! See what income, you can generate to start with minimal expense. Take the time to properly manage and assess the efficiency of these efforts to learn what works. See how your competition and market behaves. Make projections. This is a time you could work on a business plan for management issues that may overlap with that plan. Just make sure you are working on basic operations of your new Company as you do it, only if there is a need for future investors or it helps you work through management decisions.
Third, if this works and you have generated enough money so that your new business is no longer just a hobby, but real income producing, then hire an attorney to help you decide the best type of structure for your organization and answer any other questions. This is a good time to contact us and meet with us regarding your needs. We handle serious businesses only and you should show you are serious about your business idea by establishing some basic operations before continuing your investment by retaining counsel. In other words, only retain an attorney for your start up business if you are a do-er and not a dreamer!
Fourth, people ask me about partners, investors, and share holders. Some refer to these “others” as their “Work Spouse” (to whom they may or may not be married)! And, that is what these people become. Remember, if you have no one to answer to, you have more control and less opportunity for disputes and disagreements. So consider a partner only if it is in fact a legitimate necessity for you to proceed. If so, ensure your business partner is neither a flake or a crook. Know them long enough to know their strengths and weaknesses. Be honest. Do not overlook the deficits of the other person, but openly look at them and evaluate them. No one is perfect, but there is no reason to go into business with someone who will wind up making you do all the work, not abide by agreements, is unreasonable, amoral or crooked.
Fifth, understand not just your industry, but basic accounting standards and procedures. Have a regular meeting to review financial statements and actually manage your operations based on them. If you have a partner, have an open book policy for the records and facilitate trust. Discuss how draws will be handled and procedures for approval of expenses and use of company credit cards, as well as dividend distributions and salaries. Consider retaining a payroll company to issue at least nominal paychecks until your business is thriving. Proper management of accounts payable, accounts receivable, payroll, and tax accounting is critical to the proper management and success of any business. Find a CPA who will answer your tax related questions timely and clearly.
I know there are many resources, but for most looking to start a business for the first time, this is the preliminary information you need to know and should take very seriously. If after understanding and reading these basic precepts, you still want to schedule a consultation with us, please feel free to do so. We look forward to hearing from you and any help we can give to help you succeed.