Connect with us

Business Entrepreneur

The very first thing you must do when you launch a business

When you launch your business, there is something you must do at the very beginning, and it’s not what you’re thinking a lawyer would advise.

Published

on

founder

founder

As a lawyer, you’re already anticipating my answer. You’re wrong.

If you know me as a business attorney, you might expect that my answer to this question would be “incorporate.” If you know me as a partner in a small business lender, you might expect that my answer would be “raise money” or “capitalize the company.” You likely have your own answers – design a great logo, create a website, invest in great accounting software… the list goes on.

I had a “meet and greet” with a prospective law firm client a couple of weeks ago. The company sells audio fixtures and equipment for music shows and festivals. Their work is apparently top notch, their reputation and brand are growing, and they have more work than the three founders can handle right now.

After telling me all of that great news, one of the founders, somewhat sheepishly, confessed that they hadn’t spent much time getting their legal or financial house in order. He was noticeably ashamed that they hadn’t done anything along these lines – hadn’t formed an entity, hadn’t opened a business bank account, nothing.

It’s refreshing to see founders think this way

The founders looked at me, waiting for me to tell them that we needed to get right on these things. I probably should have followed their cue, piled on just the right amount of additional shame, thrown in a healthy dose of fear that the IRS and a slew of unnamed (but aggressive and formidable, mind you) regulators would be right on their tail, and signed them up as new clients straight off. But I didn’t. I patted them on the back. Not literally, but I had no shortage of praise for them.

It’s refreshing to see founders with their hearts and minds rightly focused – on sales, landing customers, wowing customers. So many entrepreneurs spend far too much time behind closed doors, tweaking pro forma models, sprucing up pitch decks, writing wonderful form customer contracts, etc.

All these things have value, but they are a distant second to getting out and finding a customer. In my book, that’s priority number one – get a customer, make a dollar.

You’ve been trained to think about liability, and I don’t blame you

I can hear you now – “But, Brett, if I don’t form a corporation or limited liability company to house the business, I’m personally liable if something goes wrong.” Yep, you might be. But you are also going to be personally liable for a business failure if you spend all your time focusing on back office stuff and don’t get out there and bring in some income. Besides, a company with no customers and no operations is in very little danger of being sued.

I realize that it doesn’t take long to form an entity, so obviously I am being a tad extreme to make a point. And since I am a business lawyer, I want you to form an entity. Better yet, lawyers like me want to be called upon to form that entity. Those other things I talked about – pitch decks and marketing strategies – are important, too, so go do them. But you better be out there operating, selling, and closing at the same time.

Businesses don’t build themselves. They need customers and income.

The Lean Startup Method gets a lot of attention these days. What I love about it is its focus on action. Do stuff, try stuff. Put products and services out there, sign up customers, gather feedback.

Don’t spend two years behind closed doors making your product perfect, particularly if you’re creating a new product or service that the market hasn’t seen before. Guess what? “Perfect” is perfect in the eye of the beholder. The market may flat out not want what you are building, at least in the form in which you are planning to initially put it out there. So make something and get it out there. Keep some of your powder (money) dry to make changes based on feedback.

What do the most successful brands have in common?

In the business classic, In Search of Excellence, Tom Peters and Robert Waterman, Jr. identified a common attribute of hugely successful companies – they have a bias for action. They try stuff, they tweak it, they learn from it. They aren’t afraid to fail, and a lot of this failure should occur in the marketplace, with real customers.

When I launched a mortgage company in 2001, my first startup where I had the reins, I initially spent too much time behind closed doors when I should have been out selling. I was fresh off a stint with one of the largest corporate law firms in the world. In the world of high-end law, you spend a lot of time making things perfect, dotting i’s and crossing t’s. That’s what our clients wanted us to do and they were willing to pay us well for the work. Everything is overstaffed – at least it used to be. Documents get revised again and again, fixing punctuation, making everything beyond perfect.

That mindset cost my own company dearly

That mindset is in sharp contrast to the “git ‘er done” mindset most companies should have when they launch. I brought that bias-for-perfection mindset into my new venture and it cost my company the strong start it needed. Plus, there was that part of me that didn’t want to get my hands super dirty, wrangle with customers, etc. I wanted to build something pretty and let others do the heavy lifting. I wanted to play puppeteer and direct others from on high. Customer service? Sales? Ugh.

Think you need your website just right to get out there? Afraid to show up without your business cards, which are still at the printer? Think your logo needs a little work and don’t want to launch without it being done? Get over it. No one really cares about your logo. It’s so unlikely to make a difference in whether or not you close your first sale.

“But, Brett, what will I say when they ask for my business card?” How about, “I ran out.” Or, “I’m having more printed.” Don’t feel comfortable with those responses? How about, “Business cards? We’re not using those anymore. We’re getting ahead of the curve. They’ll be extinct within three years.”

Say anything. Or nothing. My point is, don’t use any of these things as excuses for not getting out there and landing customer number one.

I learned my lesson in the mortgage company and, for a while, I had the FICO score to prove it. We burned through our capital quickly and our perfect logo, ideal form independent contract agreement, and meticulously organized company files weren’t recognized as currency by our vendors. Those were some lean times for me.

If you have more money than Google, you may never have to get your hands dirty

But if you don’t have a bottomless coffer, you need to have a sense of urgency about getting out there and bringing in customers (and, if you’re the leader, you better be out there showing your team how it’s done).

We got it turned around after I got off my high horse, felt the fire under my arse, and started hustling to bring in customers and build relationships. Along the way, I happened to learn a thing or two about what our customers wanted. Imagine that: a president who understood what it was like to be on the front lines.

Sure, I learned. But I am hoping that you don’t have to sport a 508 FICO score for a couple of years because you learned the hard way like I did. Tweak your pro forma, spruce up your pitch deck, get the messaging on your website just right, hire an awesome business attorney (hint, hint), but, please, pretty please, get out there yesterday and land a customer. Bring in the first dollar. Yes, you. Get hungry, get dirty. Interact. Try. Learn. Tweak your offering. Sell more. Git ‘er done. Everything else can wait.

#BusinessLaunch

Brett is The Startup Shepherd – part startup consultant, part angel investor/financier, and part business lawyer. A six-time entrepreneur and recovering “left brainer,” Brett particularly enjoys helping startups and rapidly growing socially-conscious companies.

Business Entrepreneur

Why CloudApp needs to be in your business toolkit

(EDITORIAL) CloudApp is simple yet powerful for any sized business, keeping your productivity at an all-time high.

Published

on

cloudapp

Are you fed up of screenshotting something and taking the time to drag it into a Slack window to share with an employee for them to ask you what you meant by this. Well, so was I. Working remotely occasionally has its blunders when it comes to communication, the struggles of explaining what you meant without the need to meet via a video call or jump over to another person’s desk can sometimes be a tricky situation to be in.

This is the same for in-office situations too. There’s been plenty of times in an office where I’ve had to break my own workflow or someone else’s to head over to their desk to visually explain something. A potentially useful period of time.

A few weeks ago, this pretty much came to a stop. After receiving two emails during a week in October with two types of link attachments, I was curious what they were. Clicking into these links, I got a visual demonstration of what the person was speaking about. I was so impressed. From a screen demo of a website to how something worked and what buttons to click to get a desired outcome. I was blown off my feet.

Simple as it was, the app is called CloudApp. Both available on Windows and Mac, CloudApp’s primary goal was allowing users to capture these moments like a screenshot or a screen record to help explain the thing in front of you, with little worries. The magic didn’t stop there, once I started playing with CloudApp, I recorded a short demo of a site bug/issue that we had and instantly I heard a “ping”. The recording was captured and ready in a paste-able link.

Within seconds, I sent over the visual demonstration. Dead simple, hugely effective.

By the end of the working day, I had visually explained 98% of things in Slack conversations, emails, mobile texts and even to those I was sitting near. It was a crazy addition to my Mac and productivity across my day and it didn’t stop there.

CloudApp also did a host of beneficial things like allow you to annotate images or screenshots, create GIFs, upload files and even record webcam videos too to support your screenshots.

I would recommend CloudApp to everyone. I was so impressed with their toolkit.

The freemium account is great too. You get unlimited screenshots and annotation with 15s of GIF and screen record creation, which was so reasonable for someone getting started. There are additional pricing options too. CloudApp is available for Mac and Windows and is well worth installing to take full advantage of visually explaining things to friends, colleagues, and those struggling to get a drift of what you are trying to talk about.

Download CloudApp for Mac and Windows.

Continue Reading

Business Entrepreneur

How to determine your freelance rates based on data, not your gut

(ENTREPRENEUR NEWS) Setting freelancer rates can be quite the tricky business. This tool does arms you with the data you need to grow your business

Published

on

freelance rates

The bulk of my professional career has been spent as a freelancer. The designation of “freelancer” has taken me on an interesting path that allowed for projects and opportunities I didn’t even know existed.

While I’m grateful for each and every opportunity, I now look back on some of these experiences and realize that I was vastly underpaid. For the most part, this is my fault as someone paying for a service is looking for the lowest possible rate and I never bothered to bargain out of fear of losing the role.

It was even at a point where I dreaded being asked my hourly rate because I didn’t know what the norm was. There was always a fear of charging too much and getting dropped for someone cheaper, or charging too little and looking inexperienced.

We recently talked about knowing your worth and how we freelancers often under charge for our services. Luckily, as this career path becomes more and more popular, there are now more resources devoted to helping us know what to charge.

Such a resource comes in the form of Freelance Rates Explorer. Created by Bonsai, this online tool gives users the ability explore rates from 40,000 freelancers worldwide.

“There are many sites like Glassdoor that offer salary data comparisons for full time employees,” said the tool’s developers. “However, there isn’t a site like this dedicated to provide insights on freelancers rates. We had this data, so we built the Rate Explorer to make it easy for freelancers to compare their rates in the largest publicly available rates database on the Internet.”

In order to find the standard rate for their field, users will input their role (either development or design), their skills (full stack, front-end, back-end, DevOps, iOS, and Android), experience (in years), and location. The Rate Explorer then generates a bar graph based on the answers and will show the most common hourly rates based on the number of freelancers and the rates range.

Bonsai also offers proposals, contracts, time tracking, invoicing and payments, and reporting. All of this is designed for freelancers.

As for the Rates Explorer, seeing the numbers calculated right in front of you may make you realize that you’re vastly underselling yourself. This tool can be especially beneficial to use now as we go into a new year and may be updating contracts.

Continue Reading

Business Entrepreneur

Entrepreneurs: You’re unemployable in your own company, must define your role

(ENTREPRENEURS) Once you’ve built a successful business, it’s time to reexamine your role and determine where you fit in best.

Published

on

google tracking career-listing-jargon-man-desk job hunt entrepreneurs

In my experience, most entrepreneurs are “accidental entrepreneurs.” They happened to be good at something, or they had a unique one-time opportunity to provide a product or service to the market. Then years later, they wake up one day and realize that they’re running a big business.

As an entrepreneur, one of the unintended consequences of building a business is that you become essentially unemployable within your own organization. After living the life of freedom, flexibility and responsibility of being a business owner, it’s difficult to go back to a “nine-to-five” job. This is why many entrepreneurs don’t enjoy staying with their businesses after they’ve sold to other organizations. Within months, they are frustrated that they’re no longer in control and the new owners are (in their opinion) making poor choices.

I see many situations where entrepreneurs are bad employees in their own organization. In fact, they may be the worst team members in the organization by having inconsistent schedules or poor communication skills and/or by inserting themselves into areas that aren’t useful. They can also have too much freedom and flexibility. And while most entrepreneurs insist on clearly defined roles, expectations and goals for all of their employees, they don’t always take the time to define their own roles, expectations and goals.

So why do entrepreneurs become bad employees?

I believe that it’s because they don’t have someone holding them accountable. Think about it: Who do they report to? They’re the owners. Part of the definition of “owner” is being accountable for everything but not accountable to anyone. Having a board of directors, a peer group or a business coach can provide some accountability for them, but another solution is to clarify their roles in the company and then abide by those definitions.

If you find yourself “unemployable” in your business, it’s time to define your role. It starts with outlining your main focus. Do you concentrate more on day-to-day execution or strategic, long-term decisions? Do you consider yourself an owner-operator or an investor?

Most entrepreneurs start as an owner-operator and put in countless hours of sweat equity doing whatever needs to be done to build the business. But over time they reinvest earnings in the business and hire a management team so they can step back and take on a more strategic role. Sometimes it’s not clear when the entrepreneur makes that transition, which can lead to challenges for the entire team.

Focus: Strategic Overview

If your main role is in dealing with long-term, strategic decisions, then it’s important for you to communicate that to the team. Clearly delegate tactical roles and responsibilities to the leadership team.

I’ve seen many instances where owners do more harm than good by haphazardly injecting themselves into tactical decisions that should be handled by the leadership team. Instead of jumping in when they see something they disagree with, I encourage owners to actively “coach” their leadership team to be better leaders. The approach of micromanaging every decision of others will frustrate everyone and lead to an underperforming organization.

I have one client that decided his role was to build strategic relationships and work on a new service offering. He was confident that his leadership team could handle the day-to-day operations of the business. Over time he discovered that being in the office every day was actually a distraction for him and his team. So, he moved his office out of the building.

To maintain his ownership responsibilities to the company, he scheduled one afternoon a week to physically be in the office. Team members knew they could schedule time with him during that weekly window when he temporarily set up office space in a conference room. Not having a permanent office in the building also sent a message to the team that he was not responsible for day-to-day decisions. Sometimes not having an office in the building is better than the team seeing the owner’s office empty on a regular basis.

Focus: Day-to-Day Execution

If you decide that your role is in the day-to-day execution of the business, then clearly define your role in the same way you would define any other team member role. Are you in charge of marketing? Sales? Finance? Operations? Technology? R&D? Or, some combination of multiple roles? Take the time to outline your responsibilities and communicate them to the team.

Just as you define your role, also define what you are NOT going to do and who is responsible for those areas. After all, sectioning off some tactical work does not abdicate you from long-term decision-making. You must set aside time to make the long-term, strategic decisions of the company.

Being an entrepreneur sounds glamorous to those that haven’t done it, but ultimately, the owner is accountable for everything that happens in their organization. It can be quite sobering. And while some entrepreneurs have a delusional belief that they can do everything in a company, it’s not a path to long-term success.

All entrepreneurs have to decide what their role should be in their organization – even if it means that they’re contributing to their “unemployable” status.

Continue Reading
Advertisement

The
American Genius
News neatly in your inbox

Join thousands of AG fans and SUBSCRIBE to get business and tech news updates, breaking stories, and MORE!

Emerging Stories