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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.

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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 many entrepreneurs facing mental health issues don’t get help [part two]

(BUSINESS NEWS) It isn’t a financial issue or a refusal to admit a problem – here’s why many entrepreneurs struggle with mental health challenges and never seek help.

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Nearly 44 million adults experience an episode of mental illness in any given year according to the National Alliance on Mental Illness (NAMI). Of these, the experience of 10 million adults in the United States with mental illness was so serious that it substantially interfered with a major life activity.

A significantly higher percentage of entrepreneurs studied showed signs of mental illness than did the general population according to research conducted at the University of California in 2015.

Only 41 percent of adults who needed them received mental health services in the past year. What prevents us from getting the assistance that we so desperately need?

>>Click here to catch Part One of this series<<

Although a common problem among us, mental illness in America, in all its forms, is still marked by stigma and shame. This spurious perception of a shameless disorder has been partly responsible for individuals not getting the help they need.

“It’s much more difficult to think about an anxiety disorder or obsessive compulsive disorder helping a person excel in business,” said Claudia Kalb, author of Andy Warhol was a Hoarder: Inside the Minds of History’s Great Personalities, speaking to the Harvard Business Journal.

“Stigma stems from not understanding what mental health conditions are all about, and not realizing that we all have at least some of these characteristics, “ said Kalb. “Part of the reason to learn more about these conditions is not to label people, but to better understand where people are coming from — and how, in a business setting, some of these attributes can be positive.”

While it’s very tempting to stay afraid of the stigma of a diagnosis, understand that you’re not alone, and that we all share similar problems from time to time.

With the passage of the Affordable Care Act, Americans hoped access to personal healthcare insurance would be both easier to obtain and less costly. The U.S. Small Business Administration reported in 2014 that over 75 percent of businesses are known as “non-employer” firms. These firms create a single job — typically the business owner — and have no one else on the payroll.

Because of the changes in insurance laws, many of these individuals were faced with having to leave health care options that they many have had under prior insurers and face higher rates on the new healthcare exchanges for insurance plans that were less comprehensive.

Premiums for some insured have risen nearly 10 percent in the past two years, and depending upon the state in which they live and income targets, many individuals are bracing for steep increases in insurance prices this year, with estimates ranging from 16 percent to 65 percent increases.

As the publisher of the Washington Post, Newsweek, and owner of multiple television and radio stations, Phil Graham was a man with money and power. Yet, despite his wealth and privilege, he was not immune to mental illness. His journey with severe mental illness began in 1957 and continued for years thereafter.

Katherine Graham never forgot her husband’s tears, even decades later. “He was in real tears and desperation,” she told The Baltimore Sun, “he was…powerless, immobilized.”

In an era in which the stigma was profound and the treatment options severely limited, there was little help that could be found, and Phil’s rapid descent into illness included hospitalization and invasive electroshock therapy, all to no avail. Throughout it all, Katherine carried out the doctor’s orders, trying to talk Phil out of manic depressive episodes, speaking for hours on end to try to bolster his spirits.

We know that we ask our loved ones to carry large burdens for us an entrepreneurs, and try to ease their load. Yet, by not looking for help in an attempt to not be a bother to them, we don’t help them.

A study by Rogers, Stafford, and Garland at Baylor University found that for family members of those with mental illness, there were high levels of both subjective and objective burdens reported, with many family members struggling to process through their own feelings about the mental illness and their loved one.

We do not ease the path for our loved ones by refusing to seek and get the help we need, but instead damn them with a heavier burden, despite our well-meaning intentions.

In her powerful work, The Dangers of Willful Blindness, Margaret Heffernan, discusses the all-too-familiar concept of people not wanting to allow themselves to think about things that end in conflict or that rock the boat, personally or professionally.

“We can’t notice and know everything: the cognitive limits of our brain simply won’t let us. That means we have to filter or edit what we take in. So what we choose to let through and to leave out is crucial,” writes Heffernan. “We mostly admit the information that makes us feel great about ourselves, while conveniently filtering whatever unsettles our fragile egos and most vital beliefs.”

For many of us, it’s not that we don’t want to admit that we need help, but rather that we simply cannot allow ourselves to see it — even in the best of times! If you’re struggling to see life clearly through the lens of a mental illness, it is even more difficult.

Being open with one’s self about things that are real and things that are not, and acknowledging that things might not be okay, is the first step to finding assistance.

You don’t have to find help all alone. Reaching out to someone for help can often be uncomfortable, especially about a topic that is as personal as your own health, but doing so is the critical step towards recovery. Find a trustworthy partner for your recovery who you trust to help you find someone who can provide the level of assistance you need.

While your healthcare provider is the best first stop to discuss things that are going on with you physically or emotionally, it’s important to have a support network who can be there for you in between doctor visits.

There are other, more immediate resources for those who need them:

The National Suicide Prevention Lifeline is available 24/7 either by calling 1-800-273-8255 or by going to their website and engaging in an online chat.

For those who prefer texting options with qualified crisis counselors, the Crisis Text Line is available 24/7 by texting “Go” to 741741. Both options are confidential and are immediate supports for you and your family.

Once you’ve begun treatment or counseling, stay educated and informed about the challenges that you face. You share control of your pathway to recovery with your doctor or counselor; find out all that you can from reputable sources about the specific challenge you face, and stay involved in making informed treatment decisions about your care.

You’re the most important thing in the world to your family, not your business, not your perceived notions of success — you. If you take away nothing else from this article, know that. You are not alone, and professional help is available.

>>Click here to catch Part One of this series<<

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Business Entrepreneur

Entrepreneurs face higher rates of mental illness [part one]

(ENTREPRENEUR NEWS) For many entrepreneurs, carrying out the work that they feel that they were meant to do comes with the cost of psychological turmoil, a cost often left unchecked.

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From the outside looking in, the entrepreneur’s calling is charming and magical. Being one’s own boss, making the decisions, and doing what one loves makes many people who work for someone other than themselves a tad jealous. For all your neighbor’s reveries about how the entrepreneurial life is a series of unbridled successes, you well know the price you pay, including those that no one else ever sees or hears about.

For many entrepreneurs, carrying out the work that they feel that they were meant to do comes with the cost of psychological turmoil, a cost often left unchecked.

As an entrepreneur, you balance the responsibility for the health and welfare of your company with the need to preserve your own health. There are pressures to maintain a public façade for the perceived benefit of your brand that may well be at odds with what’s going on in the inside.

Being artificially strong and denying yourself the help that you need isn’t only harmful physically, but fiscally as well. Businesses in America lose $193.2 billion in lost earnings annually due to the effects of serious mental illness on employee production and associated costs.

A significantly higher percentage of entrepreneurs studied showed signs of mental illness than the general population, according to research conducted at the University of California in 2015. The authors contended that there may be a link between mental illness and creativity.

The expanded creativity of many entrepreneurs is a fantastic attribute, but also one of a host of characteristics that affect their mental well-being. One of the authors of the study, Michael A. Freeman, identified the link and called for further research. “People who are on the energetic, motivated, and creative side are both more likely to be entrepreneurial and more likely to have strong emotional states,” stated Freeman, speaking to Google.

Amy Morin, psychotherapist and author of 13 Things Mentally Strong People Don’t Do, identified four common mental health issues that many entrepreneurs face based on the nature of their work: depression, anxiety, self-worth issues, and addiction.

Working long hours, alone for many of them, can drive entrepreneurs to be less mindful of their health. That isolation can lead some towards increased risks for depression, as well as the mindset that “time is money.”

We’re written before about the dangers of such a mindset, and maintaining it costs the entrepreneur much needed leisure and decompression time.

The pressure you feel can be healthy, a motivator to continue your efforts and network with others who can help you succeed. However, it can also be linked to extreme anxiety, which can manifest itself in multiple ways, including being so afraid to make a business decision that it leads to mental paralysis.

This incapacitating anxiousness can also lead to burnout. “It’s much more difficult to think about an anxiety disorder or obsessive compulsive disorder helping a person excel in business,” said Claudia Kalb, author of Andy Warhol was a Hoarder: Inside the Minds of History’s Great Personalities, speaking to the Harvard Business Journal.

She notes, “Howard Hughes… was a successful entrepreneur, but in the latter part of his life, as his OCD characteristics became worse, he became totally isolated. He couldn’t interact with people in business or in society.”

Anxiety’s effects can be compounded by how you judge your own self-worth.

For many, your job is your identity, and your bank account a quick barometer of your importance.

In an era in which it’s no longer uncommon to have startups fail to launch or succeed for awhile before not pivoting in a market shift, failure to make your business thrive shouldn’t have the stigma that it once did.

Some of us are feedback junkies, seeking engagement with and feedback from our internal and external customers. For others, it’s the excitement of the design and launch that gets us motivated. Whatever your particular cue might be, for the serial entrepreneur, the rush that you get is palpable and you wouldn’t trade it for anything. Maybe you should, though.

There’s a fine line between persistence and obsession, and a finer line still between obsession and addiction. Morin cites a 2014 study, published in The Journal of Business Venturing, that found that the actions of serial entrepreneurs shared similar characteristics with behavioral addictions.

These characteristics included having obsessive thoughts, negative emotional outcomes, and withdrawal-engagement cycles, in which the entrepreneur withdraws and yet feels pressured by the need to reengage with his business or partners, which he does, only leading to increased frustration and resentment. The inability for the entrepreneur to understand when their behavior was potentially damaging to themselves was also noted, with a “pursue at all costs” mentality being common, despite the harm done.

The need for mental health supports knows no class boundaries, no race or gender, or age limitations. Nor does it differentiate between those with the entrepreneurial spirit and those without.

Having an issue with your mental health or maintaining your emotional equilibrium doesn’t make you weak. The work that you’ve chosen sometimes comes with hidden pitfalls that can cause a human cost; as your most important asset, be proactive in maintaining it.

You’re the most important thing in the world to your family – not your business, not your perceived notions of success — you.

If this is a fight that you currently face, or fight on the behalf of someone close to you who suffers from a mental illness, know that you are not alone.

If you take away nothing else from this article, know that. You are not alone, and professional help is available.

You don’t have to find help all alone. Reaching out to someone for help can often be uncomfortable, especially about a topic that is as personal as your own health, but doing so is the critical step towards recovery. Find a trustworthy partner for your recovery who you trust to help you find someone who can provide the level of assistance you need.

While your healthcare provider is the best first stop to discuss things that are going on with you physically or emotionally, it’s important to have a support network who can be there for you in between doctor visits.

There are other, more immediate resources for those who need them:

The National Suicide Prevention Lifeline is available 24/7 either by calling 1-800-273-8255 or by going to their website at http://suicidepreventionlifeline.org/ and engaging in an online chat.

For those who prefer texting options with qualified crisis counselors, the Crisis Text Line is available 24/7 by texting “Go” to 741741.

Both options are confidential and are immediate supports for you and your family.

Once you’ve begun treatment or counseling, stay educated and informed about the challenges that you face. You share control of your pathway to recovery with your doctor or counselor; find out all that you can from reputable sources about the specific challenge you face, and stay involved in making informed treatment decisions about your care.

You’re the most important thing in the world to your family, not your business, not your perceived notions of success — you. If you take away nothing else from this article, know that. You are not alone, and professional help is available.

>>Keep reading as Part 2 digs in even deeper…<<

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Business Entrepreneur

Startups love pondering inclusion, yet half have no women in leadership

(STARTUPS) Tech startups are a huge part of discussing diversity and inclusion, but something as simple as hiring women in management somehow remains elusive.

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According to the Silicon Valley Bank’s annual report, over half of startups have no women on their leadership team. None.

As hard as this fact is to believe, it is also hardly breaking news. Organizations who have surveyed startups and technology companies for the past several years have seen that long-standing trends that disadvantage women and other genders in the tech space are still at play.

Like many other gendered debates about the treatment of women and other minority workers, this problem is seemingly a Catch 22 or a chicken and egg situation. Critics will continue to argue that the reason ladies aren’t in leadership roles is because they don’t have innate leadership qualities or that once their non-male employees have proven themselves, then they will start getting the resources and promotions that they say that they desire.

Like many other myths about women in the workforce, these beliefs only serve to reinforce the status quo by transferring the responsibility for these frustrating conditions onto the marginalized party.

These beliefs are busted not only because they’re tired gender clichés, but because we have hard data that proves the financial and cultural benefit in long-term effects of women leadership in tech.

However, for all the discussion of diversity initiatives, the likelihood of traditional funding going to women-led startups is still small.

For now, startups with women in leadership roles were more likely to get their funding from investing teams that were also led by females. Wouldn’t it be great if other investors began to not only understand that in 2019 it’s imperative that a company’s leadership reflect the diversity of the employees that comprise it? That workers will be more motivated, feel more understood, and have greater buy-in when they identify with their management?

Empowering women is how more get involved in tech. Diversity of leadership helps organizations thrive. And if something as simple as binary gender diversity is such a tremendous challenge, all other diversity issues are still (unfortunately) a large mountain to climb.

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