Monday, December 7, 2009

Pre-start-up work

Before a company starts there are things that usually happen. They do not have to happen for every industry and I am focusing on the production of goods for the outdoor industry and selling them to consumers. For those that have started businesses or read about this sort of thing please comment below when I miss something.

A hopefully complete list in no particular order:
  • A business plan: usually a document but it could just be in your head that provides insight into how the business will be run, who the customers are, How many customers there are, how you will get the customers, the money that is needed before a profit is made, the employees and management team, the predicted growth, and more or less where you want to be in five years.
  • A customer(s): someone willing to hand you money for something you are doing.
  • An employee(s): who is actually going to do the work. I count a small business of only a few people all as employees. The reason is that, I think, customers and investors are the ones that determine how good of a job you are doing. So they are in essence your boss.
  • Money: unless there is basically no barrier to entry (like blogging) there needs to be some input of money to jump start the process. People need to eat and they can't do that working for free. Products need to be made but someone has to pay for the material and production.
  • An idea: you have to have something that people will pay for be it an idea, service or product. You have to provide something for them to consume.
  • You have to be enthusiastic and committed: I can not think of even one business where you start making money on day one. Perhaps in the first month for ebusinesses. Probably the day you go "live" or open your doors but chances are you are working on it full time before that point. This is more like investing and gambling than working at a job. You don't get paid just for showing up.
Additionally there are things that you should consider before starting:
  • A lawyer: if you are starting with founders having a personal lawyer in addition to the company lawyer can help insure that you are not forced out overnight as has actually happened to inventors before.
  • An accountant: because money will be flying in all different directions you might like to know where it is all going because there is a good chance that someone's money disappears and you will get the blame.
  • Money: if you can live without a salary for several years more power to your start-up!
  • A vacation: when is the next time you are going to get to go somewhere?
  • Insurance: there is a better chance you will get sued as a business owner than an employee of the man.
  • A place to live: just incase you can't afford rent for awhile it's nice to have friends with couches or parents or a van.
  • Found with a woman: there are many grants and loans available to women in small businesses. There are also incentives for minorities and people with disabilities.
  • Do work for the government: there are hundreds of grants through the government for science and technology in addition to contracts for all sorts of work.
  • Consider location: what resources could help your business grow? Business incubators, state tax incentives, target market, potential employees, cost of living, and shipping costs all vary by location.
  • Have fun: if you're getting into the business to make millions of dollars you're in it for the wrong reasons. If you are starting this business to make the world a better place, well, I can't really think of a better reason to start a company.
Please add your thoughts below. I'm sure I missed something.

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