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Streamlining Your Life in Order to Go Do a Startup (or Anything Else That Will Take Full Focus)

Streamlining Your Life in Order to Go Do a Startup (or Anything Else That Will Take Full Focus)

    Editor’s Note: The following is a guest post by Thursday Bram. She writes for 21times.org, a daily newsletter helping developers take the plunge into building a business.

    Pick up the dry cleaning. Wash the dishes. Paint the house. Every day, there’s something else that needs to be done. It can seem like there’s never enough time to get everything done on your list.

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    If you’re planning to found a startup, though, time is the most important asset you have — you need as many hours as you can invest in coding, marketing and all the other details of operating a new business. The same is true, by the way, of most big projects you can think of in your life. You can’t be running around, worried on whether your day-to-day chores are getting done. You’ve got to streamline your life.

    How Far Can You Afford to Go?

    We have this stereotype of startup founders as a couple of guys coding in a garage at all hours of the day. It’s rare that we think about startup founders with kids, active social lives or even owning houses. There’s some truth to the stereotype: in order to build a business that you can sell for $100 million or take to an IPO, you’ve got to invest something in it to create value. If all you’ve got is time, that’s what you have to put into it.

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    But how much time can you really afford to free up? If you can save up enough to live on, you can probably free up all the hours you might otherwise devote to an employer. Family, significant others and kids aren’t quite so easy to deal with, though. You may need to have some tough discussions about where you’re willing to put your time in terms of your family. I’ve had a few of those conversations myself — there are some people who just won’t understand, some who are willing to let you do whatever you think is right and others who will give you the time you need, but only with a specific deadline in mind.

    Make sure you understand the real limitations of streamlining your life before you wind up having to explain to a very irate significant other that you just didn’t budget time for him or her.

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    The Ultimate Streamlining Option

    Personally, a lot of my time goes towards taking care of specific tasks in order to achieve a certain end. For instance, I own a house. I spend time maintaining the house and the surrounding yard. I spend time improving the house as well. I have two ends in mind: first, that I have a place to live, and second, that when I sell the house, I get as much money as possible. If I’m in startup mode (how I internally think of spending all available hours on one project), having a place to live is important — but I’m honestly not going to care if I have a trimmed lawn. I’m also not going to be focused on increasing the value of my house. The most logical thing I can do, from the point of view of operating the startup, is to sell the house.

    As long as I value the end result of the best startup I can build for any other end result that I spend time on, I can trade away the work. I can sell the house and rent an apartment that needs minimal cleaning and maintenance. I might even come out ahead with money from the sale that I can add to my savings.

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    You can’t trade away your obligations to your friends and family, but just about everything else can probably be eliminated, if you’re willing to make some dramatic changes. In some cases, you may need to spend some money to get necessary end results — you have to eat, after all, and buying food that requires minimal prep time does take some cash, whether you go with pizza or something a little healthier. But if you sell most of your belongings, you won’t need to dust ever again. That’s the extreme end of things, but to ensure that you can sink as many hours as possible into building the best project ever, you have to be fairly extreme.

    The More Realistic Version

    Honestly, most of us aren’t prepared to take a hardcore approach to freeing up time for founding a startup or doing anything else. Selling everything we own and moving into a small box to code for six months or a year is just a tough sell. But you can take some smaller steps in that direction, provided you’re thinking about a longer time frame for what you’re starting.

    • Start by clearing off everything you can manage easily. We all have junk cluttering up our day that we know we don’t need to be messing with. Block video games on your computer, stop checking celebrity gossip sites and otherwise eliminate the things you only do when you think nobody’s watching.
    • Track your time. Pay attention to where you’re spending your time. That’s the first step to finding more efficient options than you might be using now. You’ll find the big time sinks (hours you could be spending on your startup!) if you’re looking for them.
    • Make appointments with yourself and your project. Block out chunks of time whenever you can to work on your project. Don’t let anything else interfere with these appointments. Treat the time like an appointment with the most important client you’ll ever land.

    Your time is the most important asset you can invest in your startup. Even if you can’t sink every single hour of your day into it, you need to invest as much time as you physically can.

    (Photo credit: Deadlines and Schedules of Events and Important Dates… via Shutterstock)

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    Published on December 13, 2018

    How to Start a Company from Scratch (A Step-By-Step Guide)

    How to Start a Company from Scratch (A Step-By-Step Guide)

    If you’ve ever thought about starting and running your own business, you’re not alone. Being your own boss, having flexibility with your schedule and keeping more of the financial rewards that come with business ownership are all good reasons to own your own company.

    But as you might expect, it’s not all vacations and fat bank accounts. According to the SBA, 2/3 of businesses survive at least 2 years and approximately 50% survive 5 years.[1] So why is the failure rate so high? At least for the businesses that fail early on, lack of, or poor planning can be a major factor.

    So how to start a company?

    Starting a business from scratch doesn’t have to be hard or complicated, but it does take planning and work. Here are the first and most important 9 steps to take when your are starting a company from scratch.

    1. Do an Honest Evaluation of Yourself

    Do you work better in a structured or unstructured environment? Does a daily routine reduce your anxiety? What kinds of things are you good at? Does public speaking or making presentations make you nervous? Are you good at accounting and numbers? Can you handle the rejections you’re bound to get when selling or cold calling?

    These are all important questions to ask yourself, in fact it’s a good idea to get other peoples opinion about their perception of you in each of these situations.

    Whatever the answers you come up with for your evaluation, remember that’s all it is, an evaluation of where you are now. Think of it as a way to identify both your areas of strength and weaknesses.

    You maybe good at public speaking which can help when raising money, but bad at accounting which just means that you’ll need to find some kind of help with that area of the business.

    2. Evaluate Your Idea

    If your business idea involves a new product or service (or even an enhancement to an existing product or service), it needs to be evaluated. This is technically called market research.

    There are firms that specialize in doing market research for new products, but if you are on a tight budget, you can do this yourself.

    First, if you can build a prototype for people to use, touch and look at that’s the best option. If a prototype is not possible or it’s a service business, then offer a highly descriptive presentation of the business plan complete with it’s unique benefits and how it’s different from the competition.

    Then listen! Remember that this is not about others liking your product, this is not your baby that they are talking about. You want honest market research that gives you the best chance for a successful business. Take notes, when someone tells you that they didn’t like a feature or some aspect of your idea tell them ‘Thank you”.

    After several rounds of market research with different groups of people, you should see patterns emerging about things that they both liked and didn’t like. Use this information to tweak your product or service and do another round of market research.

    Keep in mind that you’ll never come up with a universally loved product, your job is to produce a product or service that appeals to the broadest range of your target market.

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    3. Make a Business Plan

    I know, I know this isn’t the “fun” part of starting your own business, but it is an very important step in creating a successful business!

    Basically, you can think of a business plan as an outline or blueprint of your business. A good business plan should have the following elements:

    • Executive Summary – This should lay out the businesses product or service and the problem that it solves for the consumer.
    • Market Evaluation – This should talk about the market you are serving. Is it an expanding market, and how does your product better fulfill the consumers in that market.
    • Market Strategies – How are you going to penetrate the market and sell your product.
    • Operational Plan – How will the company run from day to day? Who are the key employees and what are their specific rolls. Do your key players have specific goals set for them in advance?

    A final word on making a business plan: while lying is never acceptable especially when you are using the business plan to raise money, it is acceptable to “put your best foot forward”.

    Playing up the positives while minimizing the negatives is almost expected in a business plan.

    Besides, banks as well as professional investors will both do a more in-depth analysis before investing any money into your idea.

    4. Decide on a Business Structure

    You have many options here, and discussing them with your accountant or financial adviser is really the only way to know what’s right for you. But just to give you a quick rundown of the types of business entities and their pros and cons we will briefly go through them:

    Sole Proprietorship

    This is a common way for small businesses to get started.

    The pros being:

    Relatively low costs to set up (usually a business license and sales tax license).Owners normally do not have to set up a special bank account, they are allowed to use their personal one. Any income earned can be offset by other losses (check with your state!). You as the sole proprietor have complete control over all decision making. 

    Finally, sole proprietorship’s are relative easy to dissolve.

    The cons of using a sole proprietorship include:

    You as the sole proprietor can be held personally responsible for the debts and liabilities of the company. Some benefits, such as health insurance premiums, are not directly deductible from business income.

    If you need to raise money, you are not allowed to sell an equity stake in the company. In that same vein, hiring key people maybe more difficult because you cannot offer them an equity stake in the company.

    Partnership

    A partnership is formed when two or more people decide to start a business. Although there is no legal requirement for any documentation to form a partnership, it is my advice that you never enter into a partnership without having a partnership agreement. (Remember, spending $1500 now can save you $150,000 in legal fees later!).

    The pros of a partnership include:

    Being relatively easy and inexpensive to start. Hiring key employees can be easier as you are allowed to give equity ownership to as many partners as you want.

    For tax purposes, partnerships are relative simple as any income is treated as “pass through” meaning that each partner pays tax on their individual portion of the partnerships income (As of this writing, always check with your tax adviser).

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    As far as the cons go:

    It can be difficult for some general partnerships to raise capitol. Because it is a partnership, the actions of one of the partners can obligate the entire organisation. All profits must be shared according to the partnership agreement regardless of the amount of work done by any single partner.

    Some employee benefits may not be able to be deducted on income tax returns.

    Limited Liability Company (LLC)

    This is a very popular business entity for small to medium sized businesses. The reason for this is the cost of set up is not prohibitive and there is a separation between the owners and the company.

    The pros of an LLC include:

    Limited liability for the partners, unlike sole proprietorship’s and partnerships where the owners are held responsible for all of the companies debts and liabilities, an LLC provides some protection against certain debts and liabilities that are solely the companies.

    Simple taxation, just like the sole proprietorship and partnerships, income is considered “pass through” and is only taxed once on an individual level.

    There is no limit on the number of shareholders in an LLC. An LLC requires fewer fillings and administrative requirements than a corporation.

    Corporation

    A corporation is much more complex and expensive to set up. And a corporation is legally considered an independent entity that is separate from its owners.

    The pros of a corporation include:

    Complete separation between the owners and the company. Because the corporation is considered its own legal entity, owners can not be held personally responsible for any debts or liabilities of the company.

    A corporation can raise capital much easier just by selling more shares in the company.

    Cons of corporations include:

    Much higher administrative costs than any other business entity. Corporations generally have a higher tax rate. Dividends are not tax deductible for corporations. Income paid in dividends is taxed twice, once by the corporation and again by the shareholder.

    Again, this is just a short summary of the pros and cons, always check with your tax adviser about what will work best in your situation.

    5. Address Finances

    Again, not one of the “Sexier” parts of starting your business from scratch, but very important nonetheless.

    So, you’ve done your business plan and an estimate of your start up funding should be included. It should include the amount of funding you’ll need to get you through your first full year of operations.

    Now, how do you get that money?

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    Self Funding

    If possible, self funding is the easiest. You won’t have to go to banks and investors with hat in hand, or give up ownership or control of your company. But as we know, this is not a reality for most people. But don’t worry, there are still plenty of options available.

    Friends and Family

    They can be a good source of funding your business if they can see and understand your vision.

    Remember that business plan? Pass them out to everyone you know. Then follow up, be prepared to tell them the total amount of money you expect to raise, the minimum investment you are looking for and what you will give in return for the investment.

    For example, you give a friend your business plan and follow up with him/her a few days later. You can explain that you have secured funding for $80,000 of the $100,000 you need. You are selling a 2% share in the company for every $2,000 investment. How many shares would he like?

    And when he/she tells you no, thank him/her and ask if he/she can think of anyone off the top of his head who might be interested? Tell him/her you really appreciate his/her time and if he/she does come across someone who might be interested to let you know.

    Banks

    These guys are happy to lend you money when you don’t need it, but all of the sudden they get stingy when you actually need a loan! This is where preparation comes in.

    It’s a good idea to go over your business plan with an expert and maybe even have it rewritten by an expert before you approach either a bank or professional investor. Both will want to go over your business plan with a fine tooth comb, verifying all the numbers and data you provide.

    You should also brush up on everything in the plan so that you can answer any questions they have with authority.

    Crowdfunding

    Finally, there is crowdfunding through sites like Kickstarter or GoFundMe. Crowdfunding helps to build interest, community spirit, and a customer base. It’s also an efficient way to raise funds. You can take a look at these tips to find out more:

    6 Crowdfunding Tips To Get Your Project 100 Percent Funded

    6. Register with the Government

    As stated earlier, different types of business entities have different filling and administrative requirements. At the very least, you’ll probably need a business license as well as a state sales tax license.

    Unless you are forming a corporation, there are many good resources on the web that will do everything for you at a minimal cost.

    7. Assemble Your Team

    Remember when we evaluated your strengths and weaknesses? Here is where we fill in the gaps!

    Do you hate sales and cold calling? Great! There are people who love selling and wouldn’t want to do anything else.

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    Bored to death with accounting? There are a ton of small accounting firms out there that will take care of that for you.

    What about marketing? You can hire someone in-house or out-source that too.

    Your job is to keep on top of all the different aspects of the business to make sure they are all running smoothly and getting the results you need. If not, it’s your job to figure out the problem and implement a solution.

    Check out this guide and learn how to delegate effectively:

    How to Delegate Work (the Definitive Guide for Successful Leaders)

    8. Buy Insurance

    No matter what kind of business you start, you need insurance! Yes, I know, no one likes to buy insurance, but it can literally be the difference between having a minor inconvenience and declaring bankruptcy.

    We live in a very litigious time, even a minor slip and fall at your place of business could bankrupt you without insurance. If you need help finding a good agent, check with your local trade organizations or fellow business owners.

    9. Start Branding Yourself

    Has anyone ever ask you for a Kleenex or a QTip? We all know what they are because of branding, Kleenex is just a brand of tissue and QTip is just a brand of cotton swab. It doesn’t have to be as widely known as Kleenex or QTip, but you can make your brand a common name within your niche.

    I once owned a manufacturing company that developed a product that was so popular that my competitors started co-opting my brand name for their products.

    If you aren’t sure how to kickstart branding yourself, check out these ways:

    5 Ways to Build your Personal Brand & Make More Money

    The Bottom Line

    Starting a business from scratch can be one of the most rewarding experiences a person can have.

    But do you know what’s even more rewarding? Having a business that succeeds, is profitable and provides a good source of income for you, your employees and their family’s.

    More Resources About Entrepreneurship

    Featured photo credit: Tyler Franta via unsplash.com

    Reference

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