Thoughts on small business or entrepreneurship

Interest Groups
#6

I owned the majority shares in a software development company back in the 1990s that I founded. I was the CEO and we built the company to about $3M a year in sales before we sold it. We had a blast building it and running it. It was an enormous about of work.

I sacrificed family time, recreation time, vacation time and personal time for almost four years to do it. You basically work ALL the time. If you just want a job replacement business I suppose it is much less stressful, but if you want to grow something to IPO or sell to a bigger firm then it is a whole different story. You will deal with VCs or other investors, difficult employees, potential employee misconduct, lawsuits, dishonest customers, aging receivables and collections, as well as lots of other challenges. Everyday brings new challenges, new thrills and new disappointments. It is not for the faint of heart.

Entrepreneurship and running your own company is some of the most fun you can have, but it is not for everyone. There are a gazillion regulations you need to familiarize yourself with if you start one. The HRISA regs alone are a nightmare. Not to mention the IRS, the Small Business Administration, if you use them and a host of other regulators that think you need to abide by their rules. You should familiarize yourself with all of these if you are going to start your own firm.

My best advice for running your own company:

  1. Hire a great accountant and a great lawyer from the beginning.
  2. Get everything in writing especially with your customers
  3. And most importantly DON’T RUN OUT OF CASH!

I’ve started or been a part of five startups so far. Each was centered around software development. One of them was very successful, another one of them made some money, one barely broke even and the other two went bust. If your company survives more than three years you will be one of the fortunate few. The one I describe above was four years old when I sold it. It was also the one that was the most successful.

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#7

My hopes were to get other folks opinions on things. Also as advice on things like patents/trademarks/IP.

Say for instance I were to make a sign for a customer that they wanted Texas Longhorns in it. What the legal obligations are for that.

What are the better ways to set up a business. I.e. Just a DBA, LLC with certain filings,etc…

I’m not trying to cut the professionals out one bit, I for one would like to just know what I’m going up against. I don’t want to look like a buffoon.

How about “Options open”?

I don’t want the appearance one bit that we (space)are a business.

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#8

As my former boss would say. If it isn’t written down, then it’s not worth the paper its not written on.

That is one thing I am very particular about having things documented.

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#9

We always say where I work, “If it’s not documented, it didn’t happen.”

I’m very interested in this as well, there are so many things to consider that it’s helpful having others to talk with.

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#10

I’d gladly sign up if you’d give a talk over your experiences, and I think you could charge a decent class fee for this knowledge transfer. This is something I’ve always wanted to do, too.

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#11

I’ll give some thought to teaching a class.

I’ve made a hundred presentations to angel groups, mezzanine funding organizations, venture capitalists and board members. All of whom want your company to grow and grow quickly and are as demanding as they can be without killing you. I could tell you some of what they look for and what “games” you have to play to win the capital funding game. It is both exhilarating and exhausting.

You cannot grow if you don’t have the capital resources to do so. How do you hire that NEXT employee when you don’t have the revenue to hire them? Or buy that much needed server or pay for that next advertising campaign? There are several strategies to stretch your dollars but eventually you’ll find yourself asking somebody, read this relatives, banks, the capitalists above or your credit card for money.
You may feel like you spend as much time raising money as you do growing the business.

Ultimately, the magic of entrepreneurship is surrounding yourself with the best employees/partners/fellow shareholders you can and having fun at what you do. Otherwise you’ll end up running yourself into the ground for very little gain. There is no more demanding boss than working for yourself.

One last thought IMHO, most millionaires/billionaires in the US are either 1) Executives at large companies (Rex Tillerson) 2) inheritors (Waltons, Hunts, Kennedys) 3) real estate moguls (Trump) 4) crooks (drug dealers,etc) or 5) entrepreneurs (Bezos, Zuckerberg, Gates, Jobs and the dry cleaner’s owner down the street is probably one of them, too). Lotto winners, major league ball players or celebrities don’t count because there are so very few of them.

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#12

Put a copyright on every document you create. I had to go back and prove authorship when a troll stole one of my documents and put his name on it. It was a real PITA.

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#13

Yes Yessss YASSSSSSSSSSS
that’s a complete idea computer grrrrrrr

#14

Here is blank business “shell” if u will. Note the forums with business ideas section. I think users can create new topics. Everything is undefined, I think makers should define contracts, operations, etc.

3e8tech.com

93 % of Startups are out of business within three years. Through teamwork, multiple ventures can run in parallel with agreement that the 7% keeps everybody fed and lights on. Result should be business that grows steadily year over year and is continuously innovating.

#15

That was one of my thoughts was to buy a shell/shelf company.

#16

Oh and I was involved in 3 startups:

  1. Lawnmowing as a kid- made about 30 per hour at 18 years old for couple of very sweaty Texas summers.

  2. I worked for a hearing aid startup, got 75 mil in funding, sold years later for 3 mil, but still operates today, been 10 years.

  3. My consulting business ran for 4 years, made 750k. I was too greedy to hire anyone. I still owe some tax cuz I went spendhappy…lol

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#17

I don’t know what u call such a company, but there are thee advantages:

*escape from 93% doom in 3 yrs
*help from partners on tech issues outside ezpertise
*buddies to work with
*similar to funds over stocks, less volitile
*once operational, can fund new ventures
*shared infrastructure, staff, buliding, website, etx.

#18

We have some awesome thoughts, people and energy going on this thread! I’m about to enter into the admin phase for a company for an IoT garden prototype that my partner and I are developing and I’m about to have to review what I’ve already learned and crash course myself through the remaining gaps in my knowledge. If people are interested, really interested, I suggest we start filling out the different classes we want and start lining up internal and external speakers. I’m not married (term I picked up in from Prop Shop Day Trading Days) to the class structure division or any of the names in the spreadsheet, just wanting to get the ball rolling y’all! Please add, comment, modify how y’all see best!

#19

I’d be interested. I kinda own my own business but not in a way that’s applicable to what people here are looking for. But I’d love talks over the finance side and bookkeeping and what not.

Hell for that matter, on a tangent, just retirement stuff like going over IRAs and the like would be interesting.

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#20

I’m pretty new to the space but I do have some creds in a few of the topics raised here as I’ve been running a startup for the past 4 years.

I created a development agency doing coding work for a few years and met my original cofounder of my current company. Then we worked it all out, got things together, filed this that and the other and learned a ton. Then he left for another business and I had my first panic attack and had to fire pretty much everyone as we learned the hard way the difference between cash and accrual accounting.

I pulled it out, worked my ass off to hire/partner with the right people and try to play things the right way.
Two years later we’ve done $1M in sales with no investment, last year finally took some to hire more of what we need and cover the patent costs. There’s 9 of us now!

The way I describe it is that it’s like a pro surfer riding one of those insanely tall waves you only see in the movies. You’re either going to have the ride of your life or it’s going to smash you and potentially kill you.

My quick advice, don’t do it. It’s hard. REALLY HARD. No entrepreneur will admit it when times are hard and you only hear about it when they write their biography but it’s really really really hard. And not just on you, on everyone around you. All your friends, your family, hell even your pets suffer. To do it right you will 100% work 100/hour weeks. You will most likely fail in the first year, and for sure in the second.
If that scares you, good, stay out and live a good safe life. If not, here’s my real advice:

  • Learn how your whole business works, then try to hire/partner with experts in the parts you’re weakest at
  • If you aren’t a lawyer or accountant, hire one. I spent so much time doing stupid things that had to be redone anyway
  • Value your own time. You will think “Oh I can do that!” or “I’ll just do it myself and save time/money” but if you’re an engineer/expert worth $100hr and you’re doing $12/hr jobs you’re wasting company resources. Hire/Partner.
  • Dont be one of those “I cant tell you my idea/ NDA people” Everyone hates them and its an instant sign you don’t really understand this world yet. I’m not saying give away the blueprints or recipe, but chances are there was someone who tried to do what you did and failed, or you’re really just merging two already done ideas. (Uber for X)
  • Put your whole business into a ROCK SOLID legal foundation. Even if your business is with your friend/spouse. (See the book founders dilema)
  • Have a life. It will take concentrated effort to do. You will want to bury yourself in work and suddenly you’ll look up and have alienated everyone. Make an effort.
  • The patent office is now “First to file” and you only have 1yr to file from when you start selling or marketing your idea. At a minimum file a provisional.

I could go on and on, fundraising, networking, creating a biz without servers, etc… I feel like I’m rambling though haha.

#21

So if you’re making something for someone and it sits in their house it’s probably fine. If it’s in a public space it really depends and it’s easy to protect yourself. When I did websites I had in our contract that we were executing the designs under the direction of the client and any licenses, rights, or claims were solely the responsibility of the client. Now, if you stole a logo design and the client didn’t know it could blow back on you.

If you’re by yourself stay a Sole Proprietor for a bit until it gets “real” then do a LLC. Investors prefer you to stay an LLC/S-Corp. until your series A (generally). The downside is as a partner you’re directly responsible for the income tax which gets super confusing at tax time. When/if you go C-Corp go Delaware C. Just save yourself the hassle otherwise your first big investors will make you do it anyway.

Copyrights in the US are inherit for created works. As soon as it exists it’s copy written to you but it has to be a creative work, not just a grocery list. Often it takes being published to firmly establish dates, and the “mail yourself a letter” thing doesn’t hold up in court. Although I have heard a github commit has held up… Here’s a link with a bit more on copyrights.

#22

@DennisSmolek I would love to chat with you face up about your experiences. I have some things I am looking at, and some (a tiny bit) of funding, and I just NEED to vet these ideas. And I want to pump you for input on how things went for you, as it applies as to how realistic are my nut job aspirations.

Has anybody put together this interest group yet? Is anyone planning to?

#23

Related to this thread - I’d like to know if anyone is interested in attending some classes / discussions on the business side of inventing. I am working on an article series for an online publication so getting some feedback during a presentation would be helpful. The topics would be:
• Marketing – Who needs it, why and at what price?
• Business Structures & Protecting Intellectual Property
• Funding your company / product
• Accessing sales channels
• Promotion and Packaging
• Social Media and Adwords
• From Prototype to Production – how to build in scale
• Other topics as desired

If you have knowledge or experience in any of these topics or related ones, let’s get together for the class. Really thinking more about a group discussion rather than lecture.
“Classes” would be about an hour during evening hours. Message me or post here and if there is interest I’ll submit something to leadership for consideration.

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Interest in attending some classes / discussions on the business side of inventing?
#24

I created an #classrooms:interest-check thread for you:

(I’ll edit the title and make you the owner of the thread in a few minutes…)

#25

I am interested. I’m sure others will chime in.