If an entrepreneur asks me for advice when I serve as a mentor at Startup Weekend Blacksburg, September 14-16, 2012, in Blacksburg, Virginia, USA, I'll answer, "Be impeccable."
This is what I mean by being an impeccable entrepreneur – in to-do order:
Note: You've been warned. At the risk of losing your enterprise, your money, your relationships and your sanity, feel free to continue thinking your idea is so great and so novel that it will create its own market.
2) Count your pennies and what they have to buy before you start. The hype about being a start-up entrepreneur doesn't mention the boring fact about the cost of basic operations – paying for URLs, site hosting, services that require a check, not a credit card… The list is long and adds up. Nothing, absolutely nothing, undermines an enterprise and the morale of an entrepreneur more than debt, or worse, simply not having enough money to continue one more day.
3) Start documenting from the start. Yeah, yeah, you should document your code or your design process or whatever, but what entrepreneur has time for that? I mean document the money. Open a QuickBooks account, enter what you've already spent, and start keeping track of every single expense - how much, what for, how it was paid for, and who paid it. You'll want to know that internally when it's exit strategy time or time to bail. And entrepreneurs are in business, business is about money, and questions about money are what people in business – potential lenders, partners, buyers, investors – will have about your company. Knowing your numbers from the start keeps you ready for opportunity.
4) Get referrals for attorneys, bankers and accountants from someone you trust and admire and has been successful in business for a long time, not from another inexperienced entrepreneur, and not from someone to whom you owe a favor. I'll paraphrase advice given to me years ago by Perry Jacobsen which he termed – and I use a euphemism – The Greater Phony Theory: A phony will introduce you to a greater phony. The opposite is also true – a successful person will be encircled by other successful people to whom you can be introduced.
5) Pick two names. Select one name for your company and a different name for your product or service. Pivots happen. If your company and product have the same name and you change your strategy, your company will then have the name of an abandoned or failed product.
6) Research the names you want to use for your company, product or service BEFORE you buy the URLs. (See my Advice to My Fellow Entrepreneurs About Names, URLs and Trademarks.)
7) Hire an IP attorney to make sure the names you've researched are really available – or are good ideas. Do not Do It Yourself, DIY. An IP attorney has ways and means to do research and has experience with names that an entrepreneur doesn't. If the IP attorney advises you to choose another name, even if you love the one you've chosen, find a new name that is available. Record its first use in commerce and hire the IP attorney to trademark it. Again, do not DIY. Trust me – this can be bitterly time-consuming and expensive advice not to take. (See Rebecca Conner's Branding Right from the Start.)
8) Hire an attorney to form your business entity. If you really have big dreams for your company, anticipate what the potential fulfiller of your dreams is going to think about the process you use to found your start-up. Rinky-dink methods bespeak a rinky-dink company. Unless you have a law degree, you don't know enough and can't learn fast enough how to incorporate yourself or form a partnership in a professional, expert, impeccable way.
9) Meet with a banker. Once you're incorporated, you'll take your articles of incorporation or business entity formation documents and your Employer Identifcation Number (EIN) to a bank to open a business account. You're a customer now and it's the perfect time to begin your business relationship with the banker referred to you in #3. (See Kelly Kendrick's Why It's Good Business to Know a Good Banker.)
10) Meet with an accountant. We all start our businesses paying for them through our own personal checking accounts and with our personal credit cards. That has to be ended immediately and sorted out by an accountant. Having followed the advice in #3, you'll have the data the accountant needs to do that, plus access to his or her business savvy and experience.
I'd add Buy business insurance, but I know that's pushing it, as is the length of this post, as is the assumption that an entrepreneur would ask for advice anyway. I know. I'm a gradate of the entrepreneurial school of hard knocks myself.
But I have learned to ask for and to follow advice. I've got a new start-up in the works and its IP attorney, corporate attorney, banker, accountant, and business insurance agent are helping make it impeccable, honoring big dreams and readying them for big opportunities.
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Mike Drzal, partner with law firm LeClairRyan, is a GAP 50 Regional Ambassador for the GAP 50 Entrepreneur Awards, a program designed to identify and celebrate Virginia's next generation of entrepreneurs in the areas of life sciences, technology and energy. Nominate Virginia entrepreneurs here through September 20, 2012.
Sponsored by LeClairRyan, an entrepreneurial law firm with offices from Virginia to New York to California, providing business counsel and client representation in matters of corporate law and high-stakes litigation. The Blacksburg, Virginia-based office of LeClairRyan offers venture capital, angel investor funding, and intellectual property law services for startups, entrepreneurs, and technology-based companies. It also offers Outside General Counsel services covering the full gamut of clients' corporate, employment and business litigation needs. For more information, please contact Jim Cowan or Mike Drzal at 540-961-2600.
LeClairRyan and First Bank & Trust Company are clients of Handshake Media, Incorporated, the parent company of Handshake 2.0.