Six-Week Startup
Six-Week Startup
Six-Week Startup
(5 out of 5 stars)
I started...and opened in six-weeks!
This is a great book for business beginners (and even those who are on their
second or third time around). It walks you through the well suggested steps
of getting started. If you follow the plan...you should realistically be able to
“start” in 6-weeks.
(5 out of 5 stars)
Oh, this book is just too gooood to be true!
This book serves as a wonderful tool towards starting your own business!
I’ve thought about doing this for years but mainly found myself delaying
getting anything started due to not really knowing where to start or feeling
like I didn’t know enough to run my own business. …I came across this…
book casually and thought “How can you really start a business in only six
weeks!?”...Well, after…seeing how detailed and informative this book is…
boy, did I underestimate its potential impact. “Six-Week Start-Up” walks you
through every step imaginable... has so many steps to make sure you have
everything done right and effectively. If you’re skeptical, don’t be! It’s set up for
week-by-week tasks that are more than attainable and ideal for anyone, even
someone with a busy schedule. I finished most of these tasks setting in my
cubicle at work! I’m in my fifth week already and I couldn’t be more optimis-
tic about my capabilities of running my own business. Even if you only have
just a slight desire to get a business up and running, “Six-Week Start-Up” will
baby you all the way to your Opening Day…
(5 out of 5 stars)
Great DIY!
For people on a budget or not — great book! Very clearly written. Saved me
bunch of $$ and I learned a lot of new things about business!
ii | SIX-WEEK STARTUP
(5 out of 5 stars)
Great Book for Starting Your Own Business!
I’ve been thinking about starting my own business and I have no experience.
This book gives you a lot of nuts and bolts about starting a business which
I’ve found incredibly helpful. She also gives a lot of free resources such as how
to find a trade association, project management websites, websites that offer
free sample contracts, email management, etc.
(5 out of 5 stars)
Helpful, encouraging guide to starting a business
This book was really helpful to me in laying out all the steps needed to start a
small business. I think being able to do it all in 6 weeks is ambitious…(but)
I actually liked that she titled the book this way, because part of her point is
that anyone can do all this, its not hard, and it doesn’t take long to do. She’s
very positive and encouraging. As I worked through all the tasks in starting up
my company, I came back to this book again and again, and found it helpful
(5 out of 5 stars)
Very helpful
This book really does what it promises. I went through each week/chapter
writing down what Rhonda told me to. It all flowed together beautifully, and
I am now almost ready to put my web site live and ready for sales. I also con-
tacted SCORE and the SBA as per her recommendation, and have the added
value of the counsel of hundreds of counselors who can speak specifically into
my situation. I don’t think there is anything else Rhonda could add to make
this book a better choice for the virgin entrepeneur. Four thumbs up-two are
from my SBA counselor!
(5 out of 5 stars) It will take you more than 6 weeks to do; but, this
book is the best startup book I’ve read... it takes the complex process of start-
ing a business, and boils it down to a step-by-step recipe. A must-have for the
aspiring business owner.
(5 out of 5 stars) This book did a great job of walking through what it
takes to start a business. LOTS of helpful information and first-hand wisdom
is passed on here, including many “make sure you don’t forget ____” sections.
Praise for Books from PlanningShop
Entrepreneurship: A Real-World Approach
”
wants to be an entrepreneur or just wants to grow their own business.
— Gene Marks, New York Times small business columnist
“ A business plan is something every business needs, but too many fail to
create one because it seems intimidating. Rhonda Abrams is on a mission to
change that. With this book she shows you how to create a professional busi-
”
ness plan that will seem like it took weeks to write instead of 24 hours.
— Anita Campbell, Publisher of Small Business Trends
”
and sizes.
— John Jantsch, author of Duct Tape Marketing and The Referral Engine
“ If you’d like something that goes beyond the mere construction of your
plan and is more fun to use, try Successful Business Plan: Secrets and Strategies,
by Rhonda Abrams…this book can take the pain out of the process.
— “ Small Business School,” PBS television show ”
SIX-WEEK STARTUP | v
“ Successful Business Plan is easy to follow and comprehensive. From the first
chapter to the last, it guides you through the business planning process with a
proven systematic approach.
”
— Sean S. Murphy, Ernst & Young LLP
“ I chose Successful Business Plan because of its ease of use, its clarity, and its
good examples. I have used the book for a number of years now.
— Jean Morris, The Culinary Institute of America ”
“ It has a clearly defined, comprehensive approach.
— Zane Swanson, Emporia State University, KS ”
“ Here at the SBDC we offer clients an eight-week business planning coun-
seling program called Business Plan Expedited (BPE). BPE is structured around
Successful Business Plan — the end result is a well-written business plan that can
be used as a part of a business loan application package. I specifically chose this
text because I used it, per recommendation from my graduate school advisor, for
my MBA project in graduate school 13 years ago!
— Indria Gillespie, Sierra College SBDC ”
“ Your book has been both an inspirational read as well as a comprehensive
guide for starting my business. Being relatively inexperienced with entre-
preneurship, your book has not only given me the ability to create a solid
roadmap for planning, but has also provided an encouraging and easy way
to cope with the enormous amount of information and organization needed.
I particularly enjoy the various quotes from business professionals who have
had experience in business planning. They give precious insight and different
viewpoints that I would not have seen. Thank you for writing this book!
— Simon Lee, entrepreneur ”
“ It combines, in a very clear way, both aspects of business planning and
effective writing of business plans. The book is very well written. The forms
”
are very useful.
— Eyal Yaniv, Bar Ilan University, Israel
PlanningShop
Palo Alto, California
6-Week
Startup
A step-by-step program for
starting your business,
making money, and
achieving your goals!
Rhonda Abrams
Six-Week Startup:
A step-by-step program for starting your business, making money, and achieving your goals!™
All rights reserved. No part of this publication may be reproduced, transmitted, stored in an information
retrieval system, or used in any form or by any means, graphic, electronic, mechanical, photocopying,
recording, or otherwise without the prior written permission of the publisher.
ISBN: 978-1-933895-64-2
Coca-Cola is a trademark of The Coca-Cola Company. The Coca-Cola logo is used by permission.
Fourth Edition:
Editor: Anne Marie Bonneau
Proofreader: Mark Woodworth
Cover and Interior Designers: Arthur Wait, DianaRussellDesign.com
“This publication is designed to provide accurate and authoritative information in regard to the subject
matter covered. It is sold with the understanding that the publisher and author are not engaged in render-
ing legal, accounting, or other professional services. If legal advice or other expert assistance is required,
seek the services of a competent professional.” —from a Declaration of Principles, jointly adopted by a
committee of the American Bar Association and a committee of publishers
10 9 8 7 6 5 4 3 2 1
SIX-WEEK STARTUP | ix
Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315
Worksheets
Goals for starting my business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
My personal goals: The four Cs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
My business values. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
My role models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
My bright idea. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
My business concept. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Basic business description. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Discussing partnership terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Business name comparison chart. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Creating my identity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
My research questions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Who are my customers?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
My customer profile. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Size of my market. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
My competitors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Competitor’s price comparison chart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Potential strategic partners. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Organizations to join. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
People you’ve given or promised stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
SIX-WEEK STARTUP | xv
Introduction
In six weeks you can change your life!
Where will you be six weeks from today?
Six weeks from today, you can have your own business up and running,
and you can be on the road to success.
You’ve had the dream of owning your business for some time; you even
have an idea for your business concept. Now, I’m giving you the blueprint.
I’m going to help you get all the nitty-gritty details of starting a business
out of the way so you can spend your time on things you really want to
do—make your products, provide your service, be creative, make money,
and have fun!
With checklists and very specific advice, this book walks you through the
process of starting your business, step by step. I’ve detailed the critical
components of getting a business—a successful business—under way and
created an easy-to-follow program for dealing with those components.
Starting a business can seem overwhelming—there’s so much to do, so
much to figure out. How do you set prices? What licenses do you need?
How do you choose a location? Where do you find customers? Where do
you get the money?
All these details seem paralyzing.
I know, because I’ve been there. I’ve started and built three successful
companies. I still remember my first weeks in business—deciding on a
business name, getting my first business card designed, figuring out a
way to land my first customer. I was flustered by buying my first com-
puter and choosing the software to go with it.
I want to make it easier—much easier—for you. And I want to not only
deal with all those details, but to make sure you have some fun along the
way—staying motivated and getting energized.
So, in this book, I’ve organized the startup process into a comprehen-
sive program that breaks down the many tasks of launching a business
into six, manageable weeks. During each week, you’ll focus on just a
few major issues; this makes it possible for you to manage the necessary
details without feeling overwhelmed.
SIX-WEEK STARTUP | xvii
Of course, you might want to—or need to—take more than six weeks to
get your own business under way. That’s okay. Set your own pace. This
book still serves as a plan—a “cookbook”—outlining the steps to launch-
ing your business—whether you take six weeks or six months.
Can I guarantee that in six weeks you’ll be sitting on a beach counting
your money? No. This isn’t some late-night infomercial.
Instead, this is a realistic, do-able guide to getting your own business up
and running.
If not knowing where to start has been holding you back from launching
your business, or you feel overwhelmed by the details, or you’re afraid
you don’t have the money to pay for the advice you need, then this book
is for you.
Where do you want to be six weeks from now?
week 1
üweek 1: lay the foundation
week 2: get the information you need
Specific Goals:
Enter the number or amount you hope to achieve for your business in one year, five years, and ten years.
Priorities:
Rate your priorities for your business.
I’ll get to it Not on the Not applicable
Urgent Important sooner or later radar screen to my business
Add Employees
Add New Lines
Increase Marketing
Add Locations
Expand Online
Increase Salaries
Increase Inventory
Increase Profits
Retire Debts
Increase Reserve
Acquire Other Companies
Other:
_______________________
_______________________
_______________________
_______________________
WEEK ONE | 5
Accomplishment #1:
Clarify your business concept
My Checklist:
Identify your personal goals
Spell out your business values
Remind yourself of your source of inspiration
Describe your business concept
Consider starting lean
Identify your strategic position
Decide whether you want partners
Decide whether you want investors
Consider potential exit strategies
Discuss the impact of starting a business with your family
If you were building a house, before you drew up the blueprints, laid
the foundation, or even bought the land, you’d first have a vision of what
you’d want that house to be: big or small, one story or two, in the city or
in the country. You’d have a “vision” of your future home. The same is
true when building a company: You need a vision of what you hope
Check It Out
For a list of the most
to achieve.
popular sole proprietor
When you imagine your business, what do you hope for? To make a lot businesses in the U.S., go
of money? Use your creativity? Have more flexibility in your life? Do you to the Census Bureau’s
nonemployee statistics:
see yourself working alone or building a company with employees? Do
https://census.gov/
you hope your company grows very large or do you want it to stay small?
econ/nonemployer
As you launch your new company, it’s important to clarify and evaluate
your business concept. What is your long-term vision? What are your
personal goals? What do you see as the business opportunity? From that,
how do you define your business specifics—what it does, whom it serves,
how it differs from the competition?
Some entrepreneurs describe themselves as “visionaries” because they can
conceive of grand schemes or bold new inventions. They envision their
WORKSHEET my personal goals: the four cs
Make copies of this worksheet for yourself and your partners or key employees, if any.
Check the level of importance to you in each area.
Wealth desired in 6–10 years __________________ Income desired in 1–2 years ___________________
Wealth desired in 10+ years ___________________ Income desired in 2–5 years ___________________
WEEK ONE | 7
The Four Cs
For most entrepreneurs, their personal goals can be summed up by the
Four Cs: Creativity, Control, Challenge, and Cash. Of course, we each
want all four of these to some degree, but knowing which we most want
or need can help us structure our companies to best achieve our goals.
For instance, my very first clients were the owners of a small sportswear
apparel company. The designer began the business because she was good
at—and loved—designing clothes. Her primary motivation was being able
to act on her creativity. But an apparel company doesn’t run on designs
alone. There is a myriad of purely “business” aspects of the company—sales,
operations, manufacturing, etc. If she hadn’t planned for it, she might have
spent the majority of her time on such issues instead of designing. Fortu-
nately, she had a partner to take over those responsibilities. She gave up some
control—which wasn’t a major concern of hers—to maintain her creativity.
8 | SIX-WEEK STARTUP
If you have a high need for creativity, make certain you remain
involved in the creative process as your company develops. You’ll want
to shape your business so it’s not just an instrument for earning an
income but also a way for maintaining your creative stimulation and
making a larger contribution to society. But don’t overpersonalize your
company, especially if it’s large. Allow room for others, particularly
partners and key personnel, to share in the creative process.
n Control. Most of us start businesses because we want more control
over our own lives. Perhaps we want more control over how our good
ideas are implemented. Perhaps we want, or need, more control of our
work hours or conditions so we can be more involved in family, com-
munity, or even golf! Control is a major motivator for most entrepre-
neurs—usually more important than money. But how much control
you need—especially on a day-to-day basis—directly influences how
large your company can be.
The larger the company, the less control you have over day-to-day
decisions. As you grow your company, you’ll need to structure com-
munication and reporting systems to ensure that you have sufficient
information about and direction over developments to give you per-
sonal satisfaction. If you seek outside funding in the form of investors,
understand the nature of control your funders will have and be certain
you are comfortable with these arrangements.
n Challenge. If you’re starting or expanding a business, it’s clear you like
challenge—at least to some degree. You’re likely to be a problem-solver
and risk-taker, enjoying the task of figuring out solutions to problems
or devising new undertakings. Challenge-hungry entrepreneurs can be
some of the most successful businesspeople, but they can also be their
own worst enemies—flitting from one thing to another, never focusing
long enough to succeed.
WEEK ONE | 9
If you have a high need for challenge in your business life, it’s impor-
tant to develop positive means to meet this need, especially once your
company is established and the initial challenge of starting a company
is met. Otherwise, you may find yourself continually starting new
projects that divert attention from your company’s main goals. As you
plan your company, establish goals that not only provide you with suf-
ficient stimulation, but also advance—rather than distract from—the
growth of your business. (Or take up skydiving on the side!)
n Cash. Every entrepreneur wants to make money. Perhaps it’s just
enough money to provide a decent income; perhaps it’s so much
money you can buy a jet. How much you want or need affects how
you’ll develop your business. Will you need investors? And if so, when?
Will you sacrifice control to grow the business quickly?
Keep in mind there are sometimes trade-offs between personal goals:
Wanting more cash often means having less control; staying at the center
of the creative process may mean you need to have a partner or grow slow-
ly, once again trading off control or cash. Examine your personal goals and
those of key personnel using “The Four Cs” worksheet. See page 6
Describe what values are important to you in building your company as they relate to:
Employee treatment (wages and benefits, layoff policies, promotions, empowerment, etc.):
The environment:
Other:
WORKSHEET my role models
Use this space to list the names of people you admire, whether they’re in business or not.
My role models
Do you want to be another Elon Musk? Do you see yourself as a future
Oprah Winfrey? Or do you look up to your uncle who ran his own store
or your older sister who has been self-employed for 10 years?
Many of us are fortunate enough to know of people in business whom
we admire or would like to emulate. You may know them personally, or
you may have read about their business practices or success.
Thinking about your role models can help you clarify your own busi-
ness vision. If your business hero is Elon Musk, what about him do you
admire? His ability to make a great deal of money? Build a huge busi-
ness? His marketing and strategic capabilities? Or do you admire his
technical knowledge?
Take a moment to think about whom your business role models are, by
See page 11 completing the “My Role Models” worksheet.
My bright idea
What excites you about your business idea? If you have two or three
ideas, what do you like best about each one? Where did the idea come
from? How has it evolved since you started the process of turning the
idea into a business?
By looking at how you initially got the inspiration for your business, you
can take the next step toward determining how you might get others
excited about your business also. That’s the start of taking an idea and
turning it into a plan, which becomes a successful business. You will also
WORKSHEET my bright idea
Use this space to record your initial business idea(s). This will become a starting point for
defining your business concept and why it can be competitive in the marketplace (on page 14). It will
also be useful as you prepare your marketing materials and write your “Elevator Pitch” in Week Six.
Answering the following questions will help you clarify your concept:
What improved features/services or added value do you provide? What makes you unique
or special?
What do you think will make customers buy from you instead of your competitors?
W E E K O N E | 15
Meeting needs is the basis of all business. You can devise a wonderful
new machine, but if it doesn’t address some real and important need or
desire, people won’t buy it, and your business will fail. Even Thomas
Edison recognized this fact when he said, “Anything that won’t sell, I
don’t want to invent.”
Identify needs
Now that you know what your spark and passion are regarding your
idea, use the worksheet “My Business Concept” to determine how your
product or service will meet new or existing needs in the marketplace. See page 14
Corporate culture:
Now combine these sentences into one comprehensive statement. You will revisit and rewrite it
several times, but you’ll need a succinct business description for your business plan, investors,
employees, and others, so get something on paper now.
W E E K O N E | 17
Outline specifics
OK, so you have your inspiration, and you’ve seen an opportunity in the
market…now how do those translate into your particular business con-
cept? Exactly what are you going to sell? To whom? How?
The “Basic Business Description” worksheet helps you outline the specif-
ics of your business as you see them at this early point. You’ll be more
successful if you have a clear concept of critical business aspects such as
your target market, competition, industry, and so on. See page 16
Don’t worry if you aren’t entirely certain about the answers to your
“Basic Business Description.” Fill in the answers anyway. You’ll use these
specifics to guide the research you’ll do in Week Two, and you’ll con-
tinue to refine your business concept as you go along.
The more you understand about your own company—and how you dif-
fer from others—the better able you are to compete.
Use this worksheet to determine with your partners the terms of your partnership.
Then meet with a lawyer to draw up a formal partnership agreement.
Decisions. How will general business decisions be made? What decisions does each
partner have final authority on? Who has the final authority for decisions for the company
as a whole?
Communication. How will you communicate on a regular basis? How will serious disputes
be resolved?
Exit Strategy and Dissolution Agreement. What happens if one partner wants to leave
the business or move? What if one partner wants to sell the company? What happens if a
partner dies or becomes disabled?
Other:
W E E K O N E | 21
QUESTIONS TO ASK
POTENTIAL PARTNERS
Why are you going into business?
What past experiences have prepared you for going into business?
What are your personal goals for this business?
How much money do you need now? How much money will you need over the next 12
months? 24 months? 36 months?
How much money are you able and willing to invest in the company, if any?
What kind of credit rating do you have?
How big a company would you like this to be one day?
What would you like to see as the eventual exit?
How much time do you have to devote to the business?
What other obligations do you have, both business and personal, that will affect your
commitment of time, money, and attention?
How do you see decisions being made? By whom?
What areas of responsibility do you feel capable of taking on?
What areas of responsibility do you want to be in charge of?
How formal/informal do you like to be about such things as work hours, dress code, etc.?
What are your business values and what kind of corporate culture do you want to create?
Is your family supportive of this commitment?
Have you ever been in a partnership before? What happened?
What are your fears in this partnership?
How will you resolve differences?
Are you willing to sign a buy-sell agreement?
22 | SIX-WEEK STARTUP
If you’re going into business with other people, even a spouse or friend,
formalize your arrangement with a written partnership agreement. Take
the time to work out as many details as you can. Be certain to include
a way to buy each other (or each other’s heirs) out of the business. A
messy “divorce” from a business partner is as difficult as a messy marital
divorce—with potentially greater financial consequences. Drawing up an
agreement now will help avoid difficulties if you later decide to go your
separate ways.
Use the guide “Questions to Ask: Potential Partners” on page 21 to dis-
cuss the nature of your relationship. The worksheet “Discussing Partner-
ship Terms” outlines important issues that can later become part of a
See page 20 formal agreement, drawn up with the help of a lawyer.
those goals a good fit with your own? How much control do they want in
the business?
Of course, when you need money to start a business, you may feel lucky
to get the money you need from anyone. But over time, if you have a
fearful, intrusive, or controlling investor, you may soon regret being
involved with them.
If you decide you need investors, you’ll find more information in Week
Five, including Questions to Ask before you accept financing (page 236) See pages
and a worksheet for comparing investors. 238–239
Even if you never use the word “partner,” if you and a friend decide to
start selling used golf balls online together, in the eyes of the law you’ve
RED TAPE become partners. The best way for things to stay friendly between part-
ALERT! ners is to have a clearly defined partnership agreement before you begin
the company. Prepare a legally binding contract spelling out the terms
of your partnership: who owns what percent, how decisions are made, what happens to the
company if one or more of the partners wishes to leave, how and whether additional part-
ners can be added, and so on. It is also advisable to work out a “Buy/Sell” agreement, so the
terms of how and to whom a partner can leave or sell their interest in the business are clear.
You may want provisions limiting their ability to sell their interest to others and, in the case of
a partner’s death or disability, to have other partners buy out their heirs at a fair price—you
don’t necessarily want to wind up running the business with your partners’ spouse or child.
A no-interest loan from a friend or family member may face what’s called
“imputed interest” by the U.S. Internal Revenue Service. If the IRS views the
RED TAPE loan as a gift, the lender will have to pay taxes on the money if it’s more than
ALERT! the maximum allowed by law. All lenders must charge an interest rate that
reflects a fair market value.
Sit down and fully discuss your plans with the other people in your life
who may be directly affected. Help them to understand what you see as
the opportunities, while at the same time being clear about the potential
risks and probable sacrifices.
Ask for their input, too. They may have suggestions of ways they can be
supportive. In most small businesses, family members frequently lend a
hand. Allow them to share some of their fears or concerns so you get a
realistic idea of what’s on their minds. Discuss ways to make certain that
your family responsibilities are met even while you build your business.
Make them feel a part of your new, exciting adventure.
26 | SIX-WEEK STARTUP
SBDC counselors can assist you not only as you start your business, but
as you grow your business as well.
I highly recommend checking out your local SBDC sooner rather than
later. You can find a link to a list of SBDCs online at www.americassbdc.org.
Set up an appointment with a counselor to discuss your business and
business research, and for ongoing guidance as your business grows.
Accomplishment #2:
Create your company identity
My Checklist:
Choose a name
Check out trademarks
Secure a domain name
Consider logos, taglines, and colors
Get a graphic designer
Right from Week One, you’re going to be eager to begin working on one
of the most challenging and creative aspects of starting your own busi-
ness—developing your company identity: name, image, logo, tagline,
and so on.
Please don’t let this process overwhelm you. While choosing the right
name and image for your company is important, it doesn’t determine
your company’s future. After all, not many people would consider names
such as “Microsoft,” “Safeway,” or the “Walt Disney Company” as being
particularly inspired or critical to the company’s eventual success.
Other comments/questions
about each name:
Name Name Name
30 | SIX-WEEK STARTUP
customers remember you, understand what you do, and even develop a
certain feeling about you. Your company name and logo make your busi-
ness feel “real,” both to you and to potential customers, suppliers, and
others. Your identity is your brand image.
Once you’ve developed a certain identity, you’ll use those elements con-
sistently and repeatedly—on your business cards, stationery, signs, adver-
tising, vehicles, uniforms, and website.
Choose a name
I collect cute business names: “All You Knead” (a bakery), “The Barking
Lot” (a dog groomer), “Shear Ecstasy” (a hair salon). A clever business
name can be an excellent marketing tool—helping make your company
memorable—but coming up with a good name can seem frustrating. Big
companies spend thousands of dollars researching names, and sometimes
even they fail.
In small companies, you are the brand, and usually the best name for
your company is your own, perhaps adding a descriptive phrase to clarify
what you do. My first business was called “Abrams Business Strategies”
since I developed business and marketing plans.
When you acquire the rights to a trademark or service mark, you get legal
protection from other companies’ using your company’s name, logos, tag-
lines, or other distinctive marks on competing products or services.
Even when you are granted a trademark, you don’t “own” the name in
all instances. As part of the trademark application process, you’ll indicate
the specific category or categories of products or services for which you’ll
use the name. For instance, if you’re using “Yummy Tummy” for break-
fast cereal, someone else could get the rights to use the same name for
unrelated products or services—a weight-loss program, for instance.
W E E K O N E | 33
ABOUT TRADEMARKS
What is a trademark or service mark?
n A trademark is a word, phrase, symbol, or design, or a combination of words, phrases, symbols, or
designs, that identifies and distinguishes the source of the goods of one party from those of others.
n A service mark is the same as a trademark, except that it identifies and distinguishes the source of
a service rather than a product. The USPTO uses the terms “trademark” and “mark” to refer to both trade-
marks and service marks. [In Canada, a trademark can be used for either a product or a service.]
n Constructive notice to the public of the registrant’s claim of ownership of the mark;
n A legal presumption of the registrant’s ownership of the mark and the registrant’s exclusive right to use
the mark nationwide on or in connection with the goods and/or services listed in the registration;
n The use of the U.S. registration as a basis to obtain registration in foreign countries; and
n The ability to file the U.S. registration with the U.S. Customs Service to prevent importation of infringing
foreign goods.
®
ever, you may use the federal registration symbol “ ” only after the USPTO actually registers a mark, and
not while an application is pending. Also, you may use the registration symbol with the mark only on or in
connection with the goods and/or services listed in the federal trademark registration.
There are, of course, limits to what you can trademark. Indeed, it’s often
frustrating to find that you can’t trademark the simplest names. That’s
because the U.S. Patent and Trademark Office requires a mark to be
“distinctive” and not simply “descriptive.” For instance, you can’t get a
trademark for a health resort called “Spa,” because it’s merely descriptive.
But you almost certainly could trademark the name “Spa” for a brand of
body lotions (assuming it wasn’t already trademarked by someone else).
In fact, if you’re inventing a whole new product category, you may need
to come up with a generic way to describe the category in order to trade-
mark your chosen name. A client of mine, Patrick McConnell, invented
a dry-land snowboard, which he called the MountainBoard. To get that
name trademarked, however, Patrick had to come up with a generic
term—“all-terrain board”—to avoid his brand name’s being viewed as
merely descriptive.
Check It Out Getting the trademark process under way is fairly simple, but you’ll want
to discuss the trademark process when you see an attorney (Week Three),
Start your trademark
search at the U.S. Patent
as well as discussing other protections of your “intellectual property”—
and Trademark Office
such as copyrights and patents.
website, www.uspto.gov
To get started on your name and trademark search, begin at the website
of the U.S. Patent and Trademark Office. Find the section for Trade-
In Canada, you can do a
marks and follow the links for “Search.”
trademark search on the
website of the Canadian Begin by searching as broadly as possible—singular and plural forms of
Intellectual Property your words, similar words, alternate spellings, and so on. Results may
Office, www.cipo.ic.
show both “live” and “dead” marks. Dead marks are those that previous
gc.ca
owners have let lapse.
Keep in mind that even if a particular name or mark does not show up
as being taken, this does not necessarily mean you will be able to trade-
mark the name/mark. Some names may already be in use in interstate
commerce but may not have been officially registered. Other names/
marks may not be allowed to be registered as trademarks. So don’t print
up thousands of dollars worth of brochures just yet!
And remember, you may run into difficulty if you use a name that is
similar to a bigger, better-known company even if you think you can get
a trademark. A juice bar company, for instance, was able to keep other
juice bars from using names starting with the letter “J” just by taking
W E E K O N E | 35
them to court. Often, it’s the company with the biggest bank account
and most lawyers, rather than the ones with the law on their side, that
controls a name or trademark.
If you are going to spend a great deal of money investing in a name and
trademark, you might consider using a professional trademark search
firm or hiring a trademark attorney to conduct a more complete search.
Check It Out
Sites you can use to
Secure a domain name register your domain
An important part of choosing a business name and getting a trademark name include Network
Solutions (www.
is researching the website addresses that are available. Before the Inter-
networksolutions.com),
net, you might have happily been able to do business in one state with-
Google Apps (https://
out being confused with a business using the same name in another one. domains.google), and
Today, however, you need a “domain name” that is utterly unique, not Squarespace (www.
just in your city or state, but in the world. squarespace.com/
domain-name-search).
A “domain name” is the name by which your website is identified and
found. It is also known as your company’s URL (which stands for uni-
versal resource locator).
To find out if your preferred URL has already been claimed by another
company, you can check with any of the companies that host web-
sites or with the Network Solutions website, www.networksolutions.
com. (Network Solutions was one of the original official keepers of the
domain name registry.) Type into the search box the name you’d like to
use, including the suffix (.com, .net, .org, .shop, .us, .club, and so forth)
you’d prefer. For example, if your desired company name is Widget
Manufacturers, type in widget.com.
Don’t be disappointed if your desired business name (even your trade-
marked name) has already been taken. It can be difficult to find a website
name that exactly matches your business name. With so many companies
vying for valuable virtual real estate around the world, chances are good
that another organization has already claimed what you would consider
the perfect URL. It might not seem right, but even if you get a trademark
for your business name, someone else may legally own the right to that
domain name, especially since companies can have the same trademark
name in different categories.
Try to find a domain name that is as close as possible to your desired
company name. Use the entire company name, for example, widgetman-
36 | SIX-WEEK STARTUP
Logos
All of us are familiar with logos: the Nike “swoosh,” McDonald’s golden
arches, Apple Computer’s apple-with-a-bite, Target’s red bull’s-eye. A
logo is an image associated with your company, giving the public anoth-
er way to remember you.
Visual images make your company more memorable. There’s a reason for
this: People learn things and remember things in many different ways.
When prospective customers see your logo as well as see or hear your
company’s name, they’re using more of their brains to process the infor-
mation—both the verbal and the visual kind. So you make more of a
mental impact when people associate you with both words and images.
W E E K O N E | 37
A good logo conveys something positive about your company. The Tar-
get logo, for instance, is simple and elegant. It tells customers that Target
stores are where they’ll find exactly what they want at exactly the right
price. The bull’s-eye logo also suggests competitiveness, accuracy, and
efficiency, traits that shoppers—and shareholders—will appreciate:
If you don’t have the money to have a logo designed, an inexpensive way
to add a visual element to your business name is to just add geometric
elements: lines, squares, diamonds, and so on. In my first business—
business consulting—I used three sideways triangles, suggesting to pro-
spective clients that I would help them move their business forward:
Taglines
Many companies use a motto or tagline either to better explain the nature
of the business or to create a feeling about the company or product.
WORKSHEET creating my identity
Use the space below to begin developing your corporate identity. You may want to draw
pictures, as well as use words and phrases, to develop the look, feel, and message you
want to convey. You will continue this process in Week Six.
Business name
Logo
Colors
Distinct packaging
Taglines can become the basis of your advertising and marketing pieces.
Of course, you would use your tagline in all your advertising. But even if
you don’t have much of a marketing budget, you can use your tagline on
your business cards, packaging, and stationery, even at the end of emails.
You don’t have to have a tagline, and you certainly don’t have to choose
one before you even open your doors. But developing a tagline helps you
clarify what makes your business special and enables you to sum up your
competitive position in just a few words.
Colors
Many people start their businesses without giving colors much thought,
and yet most of us intend to use some colors in our business—in our
decor, on our business cards, brochures, packaging, website, and so on.
What often happens is that you end up using one color for one thing
(let’s say a brochure), another color for something else (for your statio-
nery, perhaps) and yet another color elsewhere (maybe your website).
Check It Out
The Color Marketing
The result? You lose the opportunity to develop a strong brand image for Group forecasts color
your company and perhaps even risk confusing your customer. trends for the next
12–18 months for a vari-
Instead, come up with a consistent use of color—your “color palette”— ety of industries. www.
to give you another tool that reminds customers who you are and con- colormarketing.org
veys a feeling about your company.
Some colors are associated with certain feelings. Blue is considered calm-
ing and reassuring, so banks and financial institutions often use blue.
While red is considered lucky for some ethnic groups, it’s viewed as a
sign of danger or action to others, so consider your target market. Other
colors have developed different associations: pink is viewed as feminine,
40 | SIX-WEEK STARTUP
Since referring to colors just by generic names (“blue,” “teal blue,” and
the like) is very imprecise, professionals use a system to identify particu-
lar colors. You’ll want to learn the “PMS” numbers (which stands for
“Pantone Matching System”) of the specific color(s) you choose so you
can give future printers and designers the exact colors you want.
Since you’re likely to use your color palette on your website, keep in
mind that some colors do not display well on computers, tablets, or
phones. Check your colors on several different devices before finalizing
your choice.
Be careful also about how many colors you use in your business. If you
use too many, it can become expensive to print your stationery, business
cards, packaging, and so on.
Write down your thoughts for logos, taglines, colors and other aspects of
See page 38 your corporate identity on the “Creating My Identity” worksheet.
Have the designer read the business concept and basic business descrip-
tion you developed on pages 14 and 16. Give the designer a sense of
your goals and values so they can consider them in the design. Show
them other visual images you like so they can get a sense of your tastes
and preferences.
QUESTIONS TO ASK
Graphic Designers
Ask about: Their experience.
How they handle the design process.
Who’s going to do the work? The person you meet, assistants, or others?
What fees/costs are involved? What deliverables will you receive?
Ask for: At least three to five design options included in the initial fee.
Both black-and-white and color digital versions of your identity system.
Digital templates for all aspects of your identity system you select:
business cards, stationery, fax cover sheets, etc.
Color palette and numbers, both for print and for online.
A signed agreement giving you ownership and copyright of all designs
(very important!).
Tell them: What the company name represents and what your company does.
Whom your target market is: their ages, industries, and concerns.
How you want your customers to feel about you.
Whether you want a traditional or more innovative approach.
What color palettes you like or dislike.
Whom your competitors are and how you’re different.
Accomplishment #3:
Get organized
My Checklist:
Set up files
Create digital records
Set up a contact management system
Keep track of your company’s “vital statistics”
Keep track of expenses
42 | SIX-WEEK STARTUP
Starting any new, big project can seem overwhelming. Some challenges are
fun: figuring out a name for your business, creating new products, think-
ing up innovative marketing ideas. Some tasks don’t seem like much fun:
setting up a budget, going to a lawyer, getting business licenses.
With so many things to do, it’s easy to forget or overlook some of the
most important things. So right from Week One, keep track of all the
basics and get organized so you don’t lose critical information.
Set up files
Trust me: You’re about to get a lot of stuff. You’ll quickly accumulate
a whole lot of tangible stuff (reports, brochures, samples, contracts) as
well as intangible stuff (information, data, advice, prices). You’ll gather
information on customers, competitors, suppliers, and distributors.
You’ll research and evaluate computers, facilities, and vendors. You’ll be
given names and numbers of people who can help you. And you’ll spend
money—money you can later deduct as business expenses if you track it
and retain receipts.
Instead of feeling like you’re making progress, all this stuff can over-
whelm you. And if you don’t stay on top of your stuff, it can directly
affect your chance of success—and your bottom line!
Get in the habit of putting the stuff you gather (tangible or intangible)
in the appropriate file as you go along. If you wait (“I’ll put this stuff
away this weekend”), those piles of paper will just get larger and larger…
Although you can start by keeping track of information such as what you
paid for office supplies in a notebook, pretty soon you’re going to find it
hard to quickly find and retrieve critical information. The answer: Put it in
electronic form so it can be easily searched for and found when you need it.
W E E K O N E | 43
Since it’s likely that you’ll do a lot of online research—regarding competi- Start It Free
tion, pricing, sources, and so on—you’ll discover it’s much easier to keep
Storing your information
track of this data if you’ve got a system set up on your computer.
in a free online, cloud-
One way to do this is to utilize the “folder” organizational structure used based application like
Dropbox (www.dropbox.
by most office automation software products. Start right away by setting up
com), Box (www.box.
computer folders and files as you gather information. For example, you can com), or IDrive (www.
create a folder called “Suppliers” and inside that folder put all documents— idrive.com) makes all of
whether word processing, spreadsheets, PDFs, or other types of files—con- that information you col-
taining the data about suppliers that you unearth during your research. lect accessible 24/7 from
any computer or mobile
device that has Internet
Set up a contact management system access. Later, when your
People who may not seem important during the early stages of your business grows, you
business may be very useful later. It’s a horrible feeling to realize a few can upgrade to a paid
account for more stor-
months down the road that you met the perfect supplier or distributor,
age space.
or the person who could introduce you to the right investor, but you’ve
lost the little slip of paper with their name, number, and email address.
So, right from Week One, establish a system for retaining and retriev-
ing individuals’ contact information. Set up a “contact management” or
“customer relationship management” (CRM) software program.
With cloud-based CRM programs, you pay as you go and these appli-
cations can grow with you. So when you just start out and only have a
short list of contacts, you can subscribe to a plan that suits your needs
and your budget. Later, after you’ve grown, you simply upgrade to a
larger plan—without interrupting access to one of your company’s most
valuable assets: your contacts. Two popular cloud-based CRM applica-
tions are Salesforce CRM and SugarCRM.
At the very least, set up a file on your computer for contact information.
Don’t just let business cards stack up.
Accomplishment #1:
Learn more about your industry
My Checklist:
Make a list of your research questions
Contact your industry association(s)
Do online research
Begin your list with the “My Research Questions” worksheet. Ask your-
self tough questions—it’s much better to uncover unpleasant truths now
rather than after you’ve invested your time and money.
After drawing up your list of questions, start looking for answers. Orga- See pages
nize your market research data in the files you set up last week. Refer to 50–51
it frequently as you design your marketing plan, look for funding, and
launch your operation.
Check It Out
As you prepare your questions, jot down any ideas about where you Every type of industry
might find answers. See “Research Sources” on page 53 for ideas. in North America has
been assigned a NAICS
code. You will often be
Contact your industry association(s) asked for this code when
researching business
When looking for information for your new business, the very first place
information. To search
to start is with an association serving your industry or related industries. for your industry’s
No matter what industry, trade, or profession you’re in, there’s almost NAICS code, go to
certainly at least one association covering yours. Why? Because there are www.census.gov/eos/
www/naics
over 37,000 industry and professional associations in the United States!
Let’s say, for instance, you’re thinking about starting a dog grooming
business. You’re going to want information about suppliers, costs, train-
ing, certification, marketing, and as much other information as you can
get your paws on. A number of organizations exist to help pet groomers.
WORKSHEET my research questions
For each of the following categories, list questions affecting the future of your business.
Use these questions to guide your research efforts.
Industry
What does the data show about the financial performance of that industry in recent years?
Other:
Target Market
What is the demographic profile of the customers I plan on serving? (e.g., age, gender, income, education level)
How many people fit that demographic profile in my target geographic area?
What data (if any) indicates buying habits or preferences of my target market?
Other:
Competition
Other:
Suppliers/Vendors
Other:
Other
Which laws or regulations (e.g., environmental, planning, etc.) typically affect my type of business?
Other:
52 | SIX-WEEK STARTUP
Finding trade associations can be difficult because they often use names
that aren’t obvious. For instance, if you type in the word “dog groomer,”
you might not find what you want. So check other words, such as “pet
groomer” or “veterinary.”
When you search for associations, you may find a dozen or more, so start
with groups that contain the name “National,” “International,” or “Ameri-
can,” rather than local organizations. Don’t be afraid to look at national
trade organizations outside of your country as they often have information
such as standards, glossaries, other site listings, and so on.
Do online research
In addition to your industry association, you’ll find a substantial amount
of industry information and data online. Of course, you’ll want to make
Check It Out certain the information is accurate and up-to-date. Be careful to rely
Use Google’s news
on information from trustworthy sources, such as recognized market
search engine to look for
recent news about your
research companies. If possible, when using data from media sources
industry (www.news. (such as newspapers and magazines), find the original source of the data;
google.com). journalists, after all, have limited space and have to edit information,
often leaving out data that might be important for your planning.
You can also sign up for
email updates on topics The key to finding industry-specific information is to be patient and
of your choice (www. diligent. You’ll have to go to many sites and look around. When you find
google.com/alerts). a site of interest—let’s say an industry association site—follow links from
that site (look for links saying things like “Related Links”).
Research Sources
Don’t forget to check for news stories about topics related to your indus-
try. You can look at general and specific media sites and use their search
and archive capabilities.
Start It Free
Free information—and You’ll find lots of information online, but I’m also a big believer in the
plenty of it—is available real world. Follow your online information hunt with real-world activi-
to anyone with a pub- ties, particularly attending trade shows. Get out there and talk to people,
lic library card. Public including suppliers, potential customers, even competitors. Who knows?
libraries maintain sub-
Perhaps other dog groomers will give you a leg up on your research, and
scriptions to databases
you’ll find that business isn’t such a dog-eat-dog world after all.
containing a surprising
amount of outstand-
ing business data, and Accomplishment #2:
you can access many of
these databases remote- Research your target market
ly from your home or
office through your
library’s website. My Checklist:
Define your target market
Determine if there are enough customers
Let’s say you’ve created a new breakfast cereal for children: “Yummy
Tummy Oats.” You’ve packed it with good things: vitamins, minerals,
great nutrition. You figure you’re going to wipe out the competition
because every parent wants a nutritious breakfast for their child.
Describe who your customers are in each of the following categories. You’ll find that the
number of customers in each category grows the closer you get to the “end user.”
Wholesale / Distributor
Decision Maker(s)
Others:
WORKSHEET my customer profile
Rank the characteristics of your customers that are most important in determining how
receptive they’ll be to your product or service. For the characteristics that have no bearing
on whether or not they’ll buy from you, leave the space blank.
Rank the characteristics of your product or service that are most important to your target customers.
Now describe your customers according to the characteristics you have identified.
Start with the characteristic you ranked as most important, providing details on how you
think that characteristic will influence your customers’ buying decisions.
Characteristic #1
Characteristic #2
Characteristic #3
Characteristic #4
Characteristic #5
W EE K T W O | 57
Or is it the cereal buyer for the grocery store chain? He cares little about nutri-
tion or cartoon characters. His concerns are more down-to-earth: how much
money you’re going to spend on advertising, how quickly you’ll replenish
inventory, and whether you’ll pay him a “stocking fee” to obtain shelf space.
Parents and children aren’t going to have a chance to buy or eat “Yummy
Tummy Oats” if you don’t meet the supermarket buyer’s needs first.
On top of that, if you don’t have your own sales and distribution force,
you may first have to find a cereal distributor and convince them to
carry your product.
The parent. The child. The store buyer. The distributor. That’s a lot of
“customers” you have to satisfy with each box of “Yummy Tummy Oats.”
You give yourself a competitive edge by thinking of each of these “cus-
tomers” and planning for their needs and motivation.
Being responsive to the details that are important to distributors, retail-
ers, sales representatives, and others helps you plan your marketing mate-
rials, operations, packaging, even the nature of the product itself. If yours
is an industry where sales reps must purchase their samples, for instance,
you can set yourself apart by supplying samples free. If retailers can fit
more square packages on a shelf than round packages, you’ll be more
competitive by choosing a square package.
Even if you think you’ll market “directly to consumers” online, you’ll
discover there are still many entities between you and your “customer”
in cyberspace. In the case of “Yummy Tummy Oats,” your intermediary
might be the online grocery store, the health food site, the children’s site,
or the search engine that will help customers find you. So you’ll still have
more than just parents and kids to please.
58 | SIX-WEEK STARTUP
As you begin to define your customers, both the end-users and the inter-
mediaries, describe all of their various attributes: age, location, indus-
try, purchasing patterns, buying sensitivities, “psychographics” (what
motivates them), and the like. Be realistic about how people actually
behave—not how they should behave.
Use the worksheets “Who Are My Customers” and “My Customer Profile”
to describe your customers. The first worksheet allows you to consider
the types of “customers” you have. The second worksheet gets you started
See pages describing the characteristics of each of those. You may need to make cop-
55 and 56 ies of the customer profile worksheet—one for each type of “customer.”
While this all seems daunting—you’ll have to click through many pages
to find what you want—you can find amazing information.
Of course, researching online is just a starting point. You’ve got to drive
or walk around the neighborhood, look at the competition, talk to other
merchants. You still have to use your own good judgment. But if you’re
looking for hard numbers, the government’s got them. McDonald’s uses
them, why not you?
And don’t forget to visit the same online sources you used to gather
industry data to gather more data about your target market. Go to the
websites of industry associations, market research firms, media outlets,
and so forth.
As you compile data on the size of your market, fill in the worksheet
See page 59 “Size of My Market.”
Accomplishment #3:
Check out your competition
My Checklist:
Identify your competitors
Analyze your competition
Compare competitors’ pricing
2. You can also see if any of your competitors have been written
about in the press recently by checking their names at the Google
News directory. Go to http://news.google.com.
3. At the Google home page, do searches on the names of your com-
petitors and the generic description of your product or service
category and location (if appropriate). Use alternative phrases as well.
In other words, if you want to find out who’s competing with you
in the landscape business in Mobile, also try phrases like “lawn care”
and Alabama.
WORKSHEET my competitors
Use this worksheet to identify your competitors. What businesses compete with you directly?
What other forces influence how or if your customers will spend their money on your
product or service? Be realistic and honest in this assessment.
Online Competitors:
________________________________________________ ________________________________________________ _______________________________________________
Inertia Factors:
________________________________________________ ________________________________________________ _______________________________________________
Competitor A:
Competitor’s price:
Competitor B:
Competitor’s price:
Competitor C:
Competitor’s price:
Keep track of the information you find about competitors’ pricing pat-
See page 64 terns on the worksheet “Competitors’ Price Comparison Chart.”
Accomplishment #4:
Find suppliers
If you’re opening a toy shop, how do you find the toys to put on your
shelves? On the other hand, if you’re manufacturing toys, how do you
get your toys onto toy shop shelves?
In turn, middle men also serve buyers as “editors” (selecting the best
choices from the myriad of options), and provide individualized service
and order fulfillment, especially for smaller customers.
But if you’re new to business, where do you find these valuable interme-
diaries and vendors?
n Word-of-mouth: The best way to find a supplier or distributor is the
old-fashioned way—asking someone who’s knowledgeable for a rec-
ommendation. When I first started my publishing company, I asked
another publisher for names of book distributors and printers. I didn’t
use their distributor, but their printing company was my primary ven-
dor for many years.
If you don’t know anyone in the same industry, ask others in related
industries (for instance, ask a printer for the names of graphic design-
ers or vice versa) or those who might have a similar need (such as for
shipping services or sign painters).
n Trade associations: Trade associations are an excellent source for
locating suppliers. Besides holding annual or regional conventions and
trade shows where suppliers exhibit their products and services, many
associations publish supplier directories, both in print and online. Use
the methods listed in the section “Learn more about your industry” to
find an association serving your industry.
n ThomasNet: Consult ThomasNet, the ultimate resource for locating
suppliers and vendors. Its website features a free, searchable database
of products manufactured in the United States. You’ll find this site
particularly useful for hard-to-find industrial products. Go to www.
thomasnet.com.
n Tradekey B2B directory: Tradekey is one of the world’s largest online
marketplaces for importers and exporters. It connects worldwide
wholesale buyers with importers and exporters, distributors, and agents
in more than 220 countries. Go to www.tradekey.com.
n eBay Business and Industrial: Most people think of eBay for consum-
ers, but eBay also has a section for industrial supplies and products
sold in large lots. Go to http://business.shop.ebay.com.
n Alibaba. Based in China, this online international marketplace lists
hundreds of millions of products, and connects millions of suppliers
with buyers from over 190 countries and regions around the world.
Go to www.alibaba.com.
68 | SIX-WEEK STARTUP
Accomplishment #5:
Consider strategic partners
You don’t have to do everything alone. A strategic partnership is a relationship
with another company for purposes such as distribution, product development,
promotion, or add-on sales. A strong strategic partner that is already serving
your target market can give you a real edge in reaching that market.
List here potential strategic partners, how you can help each other,
and how you can secure the relationship.
Potential Strategic Partners Mutual Benefits Ways to Start a Relationship
70 | SIX-WEEK STARTUP
This isn’t being deceptive. Below the name of each “team member” is
clearly printed the name of their own individual businesses. Neverthe-
less, by listing these experts together as a team, the consulting company
creates a positive impression; I have a full range of top specialists at my
disposal.
Keep in mind that virtual companies are not legal entities. There are no
rules—one member of the alliance can bill the client and then subcon-
tract with the other members, or each individual member can bill sepa-
rately. The key is to stay flexible so you can meet the client’s needs.
When you’re looking to put together a “virtual company,” seek out part-
ners that fit your own style of communication and that maintain the
same level of quality. And, as always, only do business with those you
trust and respect.
Remember, you can’t be everything to all clients, and you can’t do every-
thing yourself. As the old saying goes, “The whole is greater than the
sum of its parts.”
accomplishment #6:
Broaden or establish your network
My Checklist:
Attend a community, entrepreneur, or industry
organization meeting
Build your online connections
After all, it was at a referrals group that I first learned how to give an
“elevator pitch” (the short description of my services). And that’s where
I found many of my clients during my early years in business. In fact, it
72 | SIX-WEEK STARTUP
Entrepreneurs are even more fortunate now. There are many more
resources to help you launch your business, learn your industry, and
make important contacts than when I was starting my company.
Use this worksheet to research networking, trade, business, charity, and social organizations
you will join or in which you will participate.
Once you have found groups that interest you, you’ll want to evaluate
the following:
n Types of businesses represented and fit for your target market.
Since you’ll be looking for clients or referral sources, you’ll want to
make sure members are the types of people who have a need for or
can use your products or services. For instance, if your target market
is small businesses, you might join a Chamber of Commerce, since
its members are mostly small businesses. If you’re hoping to gather
with professional colleagues for mutual benefit (like trade education,
resources, influence, and discounts on services), choose an association
that serves your industry.
W EE K T W O | 75
Check It Out Some of these sites also feature virtual networking groups—including
entrepreneurship groups. These groups can be great sources of informa-
Intuit’s QuickBooks
Resource Center
tion on suppliers and vendors, best practices, educational opportunities,
(http://quickbooks.
and the like. Post a specific question and receive credible answers from
intuit.com/r) explores people “who have been there”—sometimes in just a matter of hours. In
topics that concern some cases, you’ll find you’re hobnobbing with the top names in your
small business owners. industry!
Another good resource,
StartUpNation https://
Keep in mind, however, that just as in the real world, these groups typi-
startupnation.com), is
cally have codes of conduct and generally accepted rules of etiquette.
by entrepreneurs, for Most, for instance, frown on blatant advertising of one’s business or
entrepreneurs. products. It’s always a good practice to spend a week or two “lurking”—
reading other participants’ postings, learning who’s who, getting the lay
of the land—before you venture in with your own postings.
Also, as with the real world, consider the source before you apply any-
one’s advice to your business. While many groups provide good sources
of information and camaraderie, the Internet unfortunately provides an
accommodating home for both unscrupulous people and plenty who,
innocently enough, simply offer poor advice.
You’ll find hundreds of entrepreneurship groups on LinkedIn and Face-
book. Simply type in “entrepreneur” in the search bar on either site and
Check It Out dozens of entrepreneur groups will pop up. You’ll find entrepreneurship
Keep up with small groups for women, for millennials, for various industries, and from vari-
business news at: ous geographic locations around the world. Many of these entrepreneurs
www.bizsugar.com; groups have tens of thousands of members.
www.inc.com; www.
allbusiness.com; In addition to these groups on social media sites, there are thousands of
www.forbes.com/ entrepreneurship forums online. Your industry association’s website is a
entrepreneurs; and good place to search for one as it may have information on members-
usatoday.com/money/ only forums. If yours offers such a service, sign up and jump in.
business.
So this week, get out there and mingle! Take the plunge. Spread the word
about your business. Face any fears of meeting new people or engaging
in an online dialogue. No matter what type of business you’re starting,
your networks will prove to be critical to your success. So start building
them now!
week 3
week 1: lay the foundation
Accomplishment #1:
Deal with legal and
licensing matters
My Checklist:
Choose a legal form and ownership structure
for your company
Discuss ownership of your company
The origin of the Apply for business licenses, permits, and identification
numbers
term “Red Tape”
In England, at least as Discuss collecting sales tax
far back as the 17th Draw up basic contracts and other legal agreements
century, stacks of legal
Protect your intellectual property
documents were tied in
red cloth ribbon. By the
19th century, “red tape” Taking care of your company’s legal health is like taking care of your
had come to connote personal health: An ounce of prevention is better than a pound of cure.
any kind of bureaucratic
Time after time, entrepreneurs end up in legal battles costing thousands
or legal complication.
of dollars that could have been avoided with a $300 trip to an attorney.
Make your first visit to a lawyer right at the beginning of your business
life. Look for an attorney who handles general business law, especially
with new or small companies. Ideally, he or she will have experience with
companies in your industry, but that is certainly not necessary unless you
are in an industry that is highly regulated. The best way to find a lawyer
is by asking for referrals, especially from others in your field.
When I went into business for the first time with my own consulting
practice, I spent two hours with a lawyer. We not only wrote a simple
letter-of-agreement I could use with clients, but we also discussed how
to price my services, collect overdue fees, and minimize taxes.
Most lawyers charge by the hour, but some have set fees for specific
tasks such as incorporation. Don’t hesitate to interview your prospective
lawyer and ask about costs before engaging their services. You have the
right to choose someone you’re comfortable with and can afford.
W EE K TH R EE | 81
QUESTIONS TO ASK
when choosing an attorney
What is your specialty or particular area of expertise?
Have you ever worked with businesses in my industry?
Do you have any clients who are in similar businesses? Competing businesses?
Is there any reason you’d have a conflict of interest representing me?
What is your workload like? Are you generally available when clients call?
Will I be working with you or with an associate or other attorney?
How much do you charge per hour? How do you charge for additional expenses (pass-
through, add on a percentage, etc.)? How much do you charge for the services of associ-
ates or paralegals?
General Partnership A business with more than one owner. You have the time and talents of more
All partners actively participate in the than one person. No double taxation.
business.
Limited Partnership A business with an owner or owners Protects the personal assets of limited
who manage the business (general partners, who aren’t responsible for the
partners) and other partners who do debts and obligations of the business.
not (limited partners). Limits investors’ financial exposure.
Limited Liability A popular legal form that provides Protects personal assets against most
Company (LLC) or much of the protection of incorporat- business losses. No double taxation.
Limited Liability ing with most of the simplicity of a Relatively simple, inexpensive to
Partnership (LLP) sole proprietorship. LLPs are LLCs for establish and maintain. Can distribute
certain professional practices. profits and losses disproportionately.
“C” Corporation A corporation is a legal entity, separate Protects owners’ personal assets
from its owners. Major investors often against corporate losses and obliga-
want companies to be C corporations. tions. Can issue stock. Unlimited
number of stockholders. Costs of
benefits for employees and owners
are deductible.
“S” Corporation A type of corporation that allows pass- The personal liability protection of a
through taxation instead of double corporation with the pass-through
taxation. S corporations are less popu- taxation treatment of a sole propri-
lar since the introduction of LLCs. etorship.
“B” Corporation A type of corporation, allowed for in Gives directors of a company more
several states, that is organized for the legal protection and responsibility
public benefit as well as for the benefit for making decisions motivated by
of the shareholders. achieving a public good rather than
merely maximizing profits.
The business owner, and possibly Pass-through profits and losses. In community property states,
their spouse, has unlimited personal The business owner can deduct spouses may be liable for business
liability for the debts, obligations, losses against other personal debts as well as having an owner-
and judgments against the income. ship interest in the company.
company.
Each partner can enter into Pass-through profits and losses If in business with others, you
contracts and incur debts for which to the partners who pay tax at have a partnership whether you
all partners are responsible and their individual rates. Partner- draw up documents or not, and
have unlimited personal liability. ship pays no taxes but must file a partners have a share of the busi-
Form 1065. ness and other rights.
Limited partners cannot participate Limited partners can deduct If a limited partner participates in
in running the company. General “passive” losses against “passive any way in the management of
partners are all liable for the income” only, and the amount the company, they can lose their
company’s obligations. they can invest is capped. liability protection.
Each owner can enter into contracts Pass-through profits and losses Can be cumbersome converting
and incur debts for the entire LLC. to each owner. LLCs pay no taxes from an LLC to a C corporation in
Must file Articles of Organization but must file a Form 1065. order to accept VC financing or
with your state; often requires to be acquired by a large corpo-
annual state fees. ration in return for stock.
Double taxation. Must file articles Double taxation: Corporation Securities rules affect how
of incorporation with your state. and shareholders each pay tax you sell stock and to whom.
Annual state fees. Requires record- on income. However, if the cor- Use a lawyer to help you deter-
keeping, annual meetings, and a poration keeps significant cash mine whether to set up a C
Board of Directors in most states if reserves, this can have lower tax corporation.
more than one stockholder. consequences than pass-through
taxation.
Disadvantages over an LLC include Pass-through taxation, but prof- Ask your lawyer if there is any
limits on number and residency its and losses must be allocated benefit in choosing an S corpora-
of stockholders, less flexibility in at same percentage as owner- tion over an LLC or C corporation
distribution of profits and losses, ship. in your specific situation.
and more record keeping.
Not all states allow this option. Same tax treatment as other Requires an annual “benefit
corporations. report,” detailing which pub-
lic benefits the company has
achieved, that meets indepen-
dent, third-party standards.
Must not be operated for the Tax exempt. Typically must raise money
financial benefit of any individuals; through contributions and
no profits distributed to individuals. grants. Board of Directors can
Must meet IRS requirements. oust founders or restrict salaries.
86 | SIX-WEEK STARTUP
alone. Wouldn’t that be nice! The truth is, when someone invests in your
company, they become a part-owner. And the minute someone owns a
piece of your company, they acquire certain rights.
Some forms of ownership give investors more rights than others. Also, if you
haven’t set up either a corporation, an LLC, or a limited partnership, your
investors are likely to become legally responsible for your company’s debts.
You may also think you’re protected from other shareholders meddling
in the business as long as you keep more than 50% ownership in the
company. Beware: Depending on your corporate form, whether you have
a Board of Directors, in which U.S. state your company is incorporated,
and other factors, shareholders not only have rights, they make binding
decisions for the company, and can even remove you from management.
Before you begin parting with any ownership interest in your company
—even taking on a good friend or family member as partner—discuss
the ramifications with your attorney.
Any time you deal with stock in your company, you face a host of potential
legal and tax implications. Be very cautious about distributing or promising
RED TAPE stock in your company and don’t do it before you’ve discussed it thoroughly
ALERT! with a competent attorney and accountant! If, for instance, in the early days
of your company, you give a consultant an amount of stock in return for
a certain monetary value of service (e.g., 10,000 shares of stock for $5,000 worth of graphic
design work), you may inadvertently be placing a value on all other stock that the company
has issued or will issue, including the stock you and other founders own. This can have a signifi-
cant tax impact on you and others. If you issue stock to company founders, or stock options to
employees, be sure the correct paperwork, including a “Form 83B Election,” has been done, or
you may all incur significantly higher taxes.
WORKSHEET people you’ve given or promised stock
Track here people to whom you’ve given or promised stock. When starting a new company,
you may use promises of stock in many ways—from raising venture money to getting your logo
designed. Discuss with your lawyer how to draw up these formal agreements.
What percentage of the company do you want or need to give to others? In a young
company, the number of shares is not as important as the percentage ownership those shares
represent. Use this worksheet to plan the distribution of stock in your company.
Founder #1
Founder #2
Founder #3
CEO
VP level employees
Investors
Strategic partners
Others
90 | SIX-WEEK STARTUP
with products or services. After all, it seems a lot cheaper to pay someone
with stock than with cash. And it seems a promising sign that others feel
that stock in your company will be worth something someday.
Anytime you issue stock, you have to deal with legal and financial con-
siderations. Moreover, you’re also diluting your own ownership of the
company. When you give someone stock, they’re getting a “share” of the
company and a percentage of the ownership.
Corporations—not sole proprietorships or LLCs—are the only legal
entities that can issue stock. For an LLC, instead of stock, you spell out
what percent of ownership each partner or investor receives in the LLC
documents. Corporations, however, cannot only issue stock, they can
issue different classes of stock—preferred or common—with some share-
holders getting better financial treatment than others. For instance, pre-
ferred stock shareholders may get paid before common stock sharehold-
ers if the company closes and remaining assets are distributed.
If you decide to issue stock in your company, before you start making
promises of stock to anyone else, come up with a “Stock Distribution
Plan.” Investors, of course, will take a significant piece of the ownership,
as will you and any other company founders. Set aside a pool of stock for
key employees you’ll recruit in the future and all other employees. You
may also choose to give stock to consultants or other service providers,
as well as grant stock to your Advisory Committee members, strategic
partners, and others.
Decide at what point a person’s stock “vests” or actually becomes theirs.
Because your goal is to keep good employees with the business, you typi-
cally want their stock to vest over a period of years. If you set up a four-
year vesting period, for example, employees might be entitled to one-
fourth of their stock after the first year, and then another 1/48th of their
stock each month (4 years times 12 months). That way, if they leave
before their stock vests, they don’t receive more than they deserve.
See pages Use the worksheets “People You’ve Given or Promised Stock” and “Stock
88 and 89 Distribution Plan” to outline stock distributions.
WORKSHEET business licenses and permits
List the licenses and permits you need, including where and how to apply, requirements and fees.
Local permits:
County licenses/permits:
State licenses:
DBA required:
Federal certification:
Other:
92 | SIX-WEEK STARTUP
Use this worksheet to keep track of important dates, numbers and information about the
legal status of your business or yourself. You may be asked to refer to these often.
Date of incorporation:
Corporation number:
Other:
94 | SIX-WEEK STARTUP
It’s very easy to get a Tax ID number. You can apply online at www.irs.
gov. You can also call 1-800-TAX-FORM to request IRS Form SS-4.
Be prepared to answer the questions on that form, then call 1-800-829-
4933 (toll-free), and the IRS can assign you a Tax ID number over the
phone. There’s no charge.
You may also need licenses from the state or other authorities to operate
certain businesses. States regulate many industries, from liquor stores to
barbershops.
W EE K TH R EE | 95
a business license from your county or city. This may feel like “Big Brother,”
but it provides your local government with information on what kinds of
businesses are being operated in the community and who is responsible for
the company. Of course, there are usually fees or taxes they collect too!
In addition to basic business licenses, cities frequently require permits to
operate some kinds of businesses, install various types of business equip-
ment, or make changes in buildings or facilities.
Use the worksheet “Business Licenses and Permits” to keep track of all
See page 91 the state business licenses and permits you need.
45 states and more than 7,500 cities, counties, and jurisdictions impose
sales taxes.
States call these taxes by various names: sales tax, franchise tax, transac-
tion privilege tax, use tax, and more. Some are the responsibility of the
seller, others the buyer. But governments figured out that it was easier
and more reliable to make the seller collect the tax than to get individual
Start It Free
consumers to send in tax on every purchase. So, businesses are typically TaxCloud (www.taxcloud.
responsible for collecting sales tax and sending it to the state. net) is an application
that both online and
Generally, if you’re going to collect sales tax, you must get a license from bricks-and-mortar retail-
your state. On each taxable transaction, you calculate the applicable sales ers can use to calculate,
tax, collect it from the buyer, keep tax records, and then file a tax return collect, and file sales
and pay the taxes to your state. You’ll pay monthly, quarterly, or annu- taxes for free. The tax
ally, depending on your level of sales. management applica-
tion integrates with
Each state makes its own rules as to what sales are taxable. Typically, most accounting sys-
most products sold to end users are taxable. Major exemptions include: tems and online shop-
ping carts, automati-
n Prescription drugs cally calculating sales tax
n Food, especially groceries and nonprepared food rates based on the origin
n Animal feed, seed, and many agricultural products of the shipment, the des-
n Products for resale—raw materials, inventory, and other items that are tination, and the class of
going to be sold, rather than used, by your customer goods. You can also use
the site to simply look
Many states also exempt services from sales tax. But that varies greatly up sales tax rates for any
from state to state, and even within a state the rules as to what is taxable city in the U.S.
and what is not seem very inconsistent.
As for sales taxes on remote sales, meaning sales you make to customers
outside of your home state, most likely you will be exempt from collect-
ing these if your remote sales are less than $1 million a year. Remote sales
include online sales and catalog sales—for example, to customers who live
in a state other than your own, and in which you have no physical pres-
ence. A physical presence in a state can include a location, facility, employ-
ee, call center, warehouse, address, or even one independent salesperson.
At the time of the publication of this book, ecommerce sales tax laws were
still in flux, and as you read this, rules and tools for collecting taxes are
likely still developing. But keep this in mind: Most likely, you will have to
deal with collecting taxes on sales you make outside of your state if you sell
over $1 million a year remotely; most small businesses just launching will
not reach that number.
98 | SIX-WEEK STARTUP
One thing’s for certain—if you’re going to make sales in any state with
a sales tax, talk to your attorney. You may also want to discuss this issue
with your accountant (Week Five). It’s not easy to figure out all the
details on your own.
Every company has certain intangible things that are, or can be, very
valuable. Many of these come under the heading of “Intellectual Prop-
erty”—assets that have value because of the knowledge, recognition,
inventiveness, and so on, that they consist of. Indeed, some companies
only have products composed of intellectual property—software develop-
ers, writers, inventors, consultants, and many more.
So just as you would protect the physical property of your company, you
need to protect your intellectual property.
Trade secrets: Just about every company has ideas or knowledge that gives
them a competitive edge, and which would be harmful if shared with oth-
ers. If you’re only starting out, your business concept may be one of your
major assets. But “trade secrets” covers a huge range of things—from how
you make a product to the preferences of your best customer.
The law provides a certain amount of protection to you for your trade
secrets—but only if you take steps to keep such information secret. So
be careful how you disseminate information: Mark documents “confi-
dential,” get others to sign nondisclosure agreements, put passwords and
other security measures on “work-in-progress” websites or computer pro-
grams, and be careful whom you talk to!
Nondisclosure agreements: One of the simplest ways to protect your
ideas is to get a signed nondisclosure agreement or confidentiality agree-
ment before discussing your concepts with others. This is a typical pro-
cedure, and you’ll often be asked to sign NDAs if you’re trying to do
business with another company. Venture capitalists will not sign NDAs,
as they see too many new business ideas.
TRADEMARKS
WHAT
WOULD I’d be sure to avoid any name close to or potentially confusing with a big
company’s trademark. It may seem silly when a big corporation goes after a
RHONDA tiny company, but if a big company doesn’t protect its trademark, the law says
DO? they can lose it. They have no choice but to sue. Even if you’re legally in the
clear, with a trademark issued to you, the reality is that in trademark issues,
the side with the greatest ability and willingness to spend money on lawyers gets their way.
McDonald’s, for instance, vigorously goes after any company that uses the prefix “Mc” even for
products or services that could not possibly be confused with food. So don’t even think of nam-
ing your barber shop “McHaircut.”
100 | SIX-WEEK STARTUP
Check It Out Since many companies can have the same trademarked name in different
categories, your domain name may legally be taken by another trade-
Although your work is
automatically copyright-
mark owner, leaving you without any recourse.
ed at the time you create
So now’s the time to talk with your attorney about ensuring that your
it, you may want to fur-
ther protect yourself by
marks are protected—both online and off.
registering your creation Copyrights: If you create works that others might want to copy—con-
with the U.S. Copyright
tent, music, art, software, illustrations, and the like—you’ll want to pro-
Office (www.copyright.
gov). In Canada, register
tect what you’ve created. This is where copyright law comes in.
your copyright with the Copyrights cover any type of work that is “fixed” and “tangible”—even
Canadian Intellectual
if it’s only computer code, words spoken on an audiotape, or images
Property Office (www.
cipo.ic.gc.ca).
“fixed” on a movie.
Copyrights do not cover “ideas” no matter how unique, just the particu-
lar fixed expression of that idea. For instance, you can’t copyright your
idea to have a boy go off to a school for wizards, but you can copyright
your novel telling the story of this boy.
Once you have a copyright, you retain the rights to that creation, and no
one else can make a movie about your hero without your permission.
W EE K TH R EE | 101
Whenever others help you create any of your intellectual property, you
want to make clear who owns what they develop. For instance, if you hire a
RED TAPE graphic designer to create your logo, software developers to write computer
ALERT! code, or writers to create content, who owns the rights to all those creations?
In most cases, you want to make sure you do! So in your contract or agree-
ment, clarify the ownership of the work product, make certain that they are required to transfer
any copyright or other ownership if necessary, and specify that you are hiring them on a “work-
for-hire” basis, with all work product becoming your property. And have the agreement looked
at by an attorney.
You also can’t copyright “facts.” So if what you’re creating is purely the
compilation of facts, you won’t be able to copyright that.
Copyrights are easy to get. The rights to your creation are yours at the
moment you create it; theoretically, you don’t have to do anything to ensure
your copyright. But that puts you at some risk. The easiest thing to do to
protect your copyright is to add a simple copyright notice whenever you
produce something. Just add the word “copyright,” the © symbol, the year,
and your name (copyright ©2018, Rhonda Abrams).
Patents: Copyrights are easy to get; patents are incredibly tough. Copy-
rights cost little; patents are very expensive. Copyrights are yours the
instant you create the work; patents can take years to get. Patents are
also difficult and costly to enforce—if someone violates your patent and
starts selling a knock-off of your product, it may take a lot of money (in
legal fees) and time to put a stop to it—and if they’re overseas, enforce-
ment will be even harder. So if you’re building your business around a
new invention, process, machine, recipe, or formula that needs to be pat-
ented, it’ll be tough going.
If, however, you have a new invention or a new process that is indeed
unique, “nonobvious” (a requirement for qualifying for a patent), and
worth a lot of money, then pursue the patent process. The first thing
you’ll need—after you’ve come up with your invention or idea—is a
good patent attorney. A good one will warn you of the costs and pitfalls
before you get too far down the road. To find a competent patent lawyer,
start by asking your business attorney.
102 | SIX-WEEK STARTUP
Accomplishment #2:
Build your team and
personnel structure
My Checklist:
Consider your support structure
Decide whom you need on your team
Figure out how much you can afford
Examine the use of independent contractors
Understand employment laws and consider your
personnel policies
Appraise your management style
Use this worksheet to list the names of people or organizations you can turn to for support
and advice. Include potential supporters from whom you may want to seek help in the future.
Business buddies:
Mentors:
Entrepreneurs’ groups:
Blogs/online communities:
Industry groups:
Others:
104 | SIX-WEEK STARTUP
can control the decisions about management of the company even if you
own a controlling interest in the stock. They have legal liability for the
company’s actions, so they should take their role very seriously. In many
companies, especially large companies, board members are paid—or at
least reimbursed for their expenses incurred coming to board meetings or
doing company business.
In some states, you may not need to have any members of the board
other than yourself or the company owners or founders and you may
not need any outside board members. But there are occasions when you
might want to—or need to—invite outside people to sit on your board.
For instance, if you have investors, especially venture capitalists, they’ll
expect to be on the board. If you are able to secure well-known individu-
als from your industry, or a related industry, you can gain valuable advice
and insight as well as adding stature and connections to your company.
Whom should you ask to be on your board? Since the board makes legal-
ly binding decisions for the company, be very careful about whom you
ask. The best board members are those who understand your business,
are supportive of you (even when they challenge particular decisions),
have a long-range view of your company’s growth, and bring excellent
connections to the business or financial world.
Use the worksheet “My Support System” to list potential supporters. See page 103
Every company’s need for staff is unique—a restaurant clearly has dif-
ferent staffing needs than a medical equipment manufacturer or an out-
source design firm. Some companies—such as consulting firms—can be
more flexible in their hiring arrangements, perhaps only hiring employ-
ees or using independent contractors after a client or project is secured.
Others—such as manufacturers—usually need staff before they can
actually make a sale. Even if you’re a “solopreneur,” here’s something to
keep in mind: If you want to grow a company with real value beyond the
hours you put in, you’re going to need help.
WORKSHEET whom do i need on my team?
List the job titles needed in each area. Some suggestions for managers and officers are in
parentheses, but you should hire only those your company really needs as it grows.
Top Management
(President/CEO)
Administrative
(Office Manager,
Administrative Assistants)
Financial
(Controller, Bookkeeper, etc.)
Marketing/Sales/PR
(VP Marketing,
Salesperson, PR Director)
Operations/Production
(Production Manager)
Technology
(Chief Technology Officer,
Website Developer, Tech
Support)
Human Resources
(Personnel Director)
Logistics Staff
(Shipping Clerk, Janitor)
Other:
Desired Education/
Desired Attitudes/Habits Skills Desired Compensation
Training
108 | SIX-WEEK STARTUP
Whom do you need on your team? Brainstorm about the jobs you need
done in your business. After compiling your list, indicate whether you
want to keep these tasks for yourself, hand them over to someone else,
or share these duties. This will start to give you an idea of the jobs you’d
like to hire others to complete.
Check It Out You’re almost certain to have a long, long list of things you’d like some-
Small businesses
one else to do. Prioritize what you’d like accomplished. Can they all be
create most of the jobs.
undertaken by the same person? In a small business, it’s typical for peo-
According to the Small
Business Administration
ple to wear many hats, but you still have to consider whether one real-
(SBA), small businesses live person can manage very different tasks. For instance, is it realistic to
create 64% of new imagine that the person who handles your administrative paperwork can
private sector jobs in also do some bookkeeping, shipping, and basic work on your website?
the U.S. Probably. But is it realistic to think the person who’s going to handle
your administrative tasks can also manage your computer network, han-
dle your back-end technology needs, and make sales calls? Probably not.
Also consider how much time you’ll require from an employee. Based on
your job requirements—and your budget—consider the range of your
options for getting the help you need. Not all new hires need to be full-
time employees. It might make sense for you to hire part-time workers, a
short-term contractor or independent consultant, even college interns.
Common functions for small business employees include:
n Administrative
n Sales/customer service
n Billing/bookkeeping
n Production
n Shipping
n Marketing
n IT/technology planning
W EE K TH R EE | 109
A good plan is to save up for payroll just as you save for other invest-
ments. Set up a separate payroll account with enough money to cover at
least three months’ worth of payroll and taxes. Expect to make payroll
from monthly cash flow rather than this separate account, which acts as
an emergency backup in case you have a bad month. This financial cush-
ion allows you to hire with more confidence.
Use the worksheet “How Much Can I Afford?” to calculate how much
See page 111 money you’ll have available each month for wages.
Use this worksheet to estimate how much money you’ll have available
each month to pay wages or salaries.
G. Subtotal: Add (D) wages, (E) taxes/benefits, and (F) other costs
Work in your office and use equipment you Choose their work location and provide their own
provide equipment, tools, and materials
Work per your instructions and may receive Decide how to perform their services, in what
training from you order, and usually receive no training
Are paid for their labor regardless of business Can earn a profit or suffer a loss depending on
performance the quality and quantity of services they provide
Work for you on a continuing basis Typically manage multiple clients or customers
and work for you on an as-needed project basis
Are usually paid by unit of time Are usually paid a flat rate or by project
Can quit or be fired at any time Can be terminated or leave according to the
terms of their agreement with you
W EE K TH R EE | 113
Always check with an attorney or human resources specialist before finalizing your
policies, as state and federal laws may affect your policies regarding overtime,
work hours, family leave, and so on.
Work Hours
Starting time:
Ending time:
Flex time policies:
Overtime policies:
Other:
Vacation Days
Number of days per year:
When do they become available?
Increases after years of service? How many?
Can unused vacation days be accumulated? How many? How long?
What times of year can they be taken? How do they have to notify you?
Sick Leave
How many paid sick days off per year?
Can they be accumulated?
Special circumstances?
Personal Leave
Will you allow any paid personal leave time? How much?
How much notice do employees have to give for personal leave?
Holidays
Which holidays will be time off with pay?
Any “floating” holidays?
Any other time-off policies, either paid or unpaid, sabbaticals, etc.?
Reimbursement Policies?
Which expenses will the company reimburse employees for? (e.g., travel, commute, parking, public transportation):
How will those have to be documented/submitted?
Insurance
List the insurance coverage you’ll offer and how and whether dependents are covered:
Health insurance:
Dental insurance:
Vision insurance:
Life insurance:
Disability:
Other:
Retirement Program
Will you offer a retirement plan?
List details: who is covered, when the plans vest, what amount employees have to contribute, etc.:
Training/Education
What ongoing training will you offer employees?
Will you reimburse/pay for noncompany-sponsored education/training programs/tuition?
Benefits
List any other special perks/benefits offered (e.g., cell phones, auto lease, birthdays off, etc.):
Performance Review
How often will you do performance reviews?
On what basis will performance be judged?
Who will participate in reviewing employees?
Other:
118 | SIX-WEEK STARTUP
Nordstrom, the upscale department store, became famous for its out-
standing customer service. How does Nordstrom instill such dedication
and loyalty in its employees? One factor may be its personnel policies.
The Nordstrom personnel manual contains only one sentence: “Use
good judgement in all situations.”
See pages Use the worksheet “My Personnel Policies” to establish the main policies
116–117 your business will follow in dealing with employees.
When you have an immediate need for help, you might be tempted to
hire anyone you can get, but it’s often better to leave a position unfilled
until you can find a person you consider capable and trustworthy.
Here’s something to keep in mind right from the start: Hire for attitude,
train for skills. You want people on your team with good work habits, a
positive attitude, and an ability to get along with others. In most cases,
you can teach a smart and willing person a particular skill (such as how
to use a software program or operate a piece of machinery). It’s much
more challenging—and a lot more work—to instill the right attitude in
the wrong person.
The key to successful hiring is to have a very clear definition of the posi-
tion you’re filling. Job descriptions spell out the critical duties, roles, and
responsibilities of a specific job. When a candidate reads a well-crafted
job description, they should be clear about what the position involves.
This clarity should help them figure out whether the job suits their
interests, skills, and background. A well-crafted job description helps you
attract the candidates you want and weed out the ones you don’t.
W EE K TH R EE | 119
QUESTIONS TO ASK
POTENTIAL employees
Don’t wait until a job applicant is sitting in the waiting room before figuring out what to ask.
Take time well before the first interview and make a list of things you’d like to know about your
candidate, such as whether they have the right experience, skills, education, and so forth. Ask
specific questions in those areas, “What were your exact responsibilities?”, “What computer
programs did you use regularly?” And so on. Find out, also, what they liked and didn’t like
about their previous jobs and what they hope for in their new position. That gives you a better
sense of whether they are a good fit for your job and your company.
During interviews, don’t do all the talking! It’s appropriate to explain the job and, in many
cases, to try to “sell” the job to the candidate, but most of the time the candidate should be
talking, not you. You may want others to also interview the applicant, especially the prospect’s
direct manager, and possibly coworkers and even people who will work for him or her.
In addition to direct work-related questions, it’s important to ask questions that give you a
sense of the applicant as a person and their attitudes toward responsibility, working in a team,
how flexible they are when faced with change or uncertainty, and so forth. But be careful!
Some questions are illegal to ask. You can’t, for instance, ask a candidate about their marital
status, plans for having children, religion, or age (in most cases). But it’s perfectly legal to ask
about hobbies, interests, and long-term goals.
And never, never discriminate on the basis of race, gender, age, national origin, and the like. It’s
not just illegal—you’ll eliminate some terrific potential employees.
As you jot down a list of job duties and responsibilities, think not only
of the tasks you want help with right now, but of your long-term needs
also. As your business grows and attracts more customers, what duties
Check It Out will you want this employee to perform? Forecast for your reasonable
Popular online job sites
immediate future growth and plan ahead.
include Craigslist (www.
Here are other ways to increase the quality of job applicants:
craigslist.org), Monster
(www.monster.com), n Create an ongoing recruitment campaign: Develop a network of
Indeed (www.indeed. referral sources, and remind everyone in your company to be on the
com), CareerBuilder
lookout for great employees.
(www.careerbuilder.
com), and LinkedIn When you place a “help-wanted ad,” create
n Be creative in your ads:
(www.linkedin.com)
as much attention and interest as possible. Express the “personality” of
your company in your ads.
n Hire the unusual: Increase your applicant pool by expanding your
vision of a typical employee. Does your industry usually hire young
people? Try recruiting retirees. How about looking for employees
with disabilities? Or from different ethnic groups? Sometimes the best
employees don’t look like the ones you already have.
n Be in the game on salary and benefits: As a new company, you may
not be able to pay more than big companies or give as many benefits,
but you’d better be fairly competitive. You can’t be so far apart that any
applicant would feel like a fool for accepting your job.
n Offer creative “perks”: We allow employees to bring their dogs to
work; I give employees their birthday as a paid holiday. One of the
best perks is flexibility. An applicant may want to start work at 10 a.m.
to avoid rush hour and stay later, or come to work earlier and leave at
W EE K TH R EE | 121
3:30 p.m. to be home with the kids after school. Of course, this isn’t
always possible, but flexibility is a highly desired job benefit.
n Act fast: If you see someone you really like, be prepared to decide and
make an offer. But don’t ever hire out of desperation; it’s better to keep
a job open than be stuck with the wrong person.
n Get a reputation as a great place to work: Sure, all applicants look
at tangible benefits. But in the long run, what encourages current
employees to recruit others, reduces turnover, and attracts the best new
applicants, is building a business where people feel good about going
to work—a company with integrity, that shows respect for all, and that
lets people also have fun. Do that, and they’ll line up at your door.
Use the worksheet “Recruiting Employees” to identify places to seek See page 123
employees.
Compensation
To attract good employees, you have to offer salaries and benefits that are
competitive with similar businesses in your area. Most employees’ main
financial concern is the salary or wage offered, but they will also decide
to accept a job based on the total “package,” including:
n Base salary/wage
n Bonuses, based on either individual performance, group or company Check It Out
performance, or guaranteed bonus Research comparable
n Overtime, which may be set by law compensation at
n Signing bonus, as an incentive in a very tight job market www.salary.com or
n Commissions, given on sales made
www.salaryexpert.com
n Profit sharing, a portion of the overall company profits Find out the average
n Stock options or stock purchase plans, giving the employee a compensation for over
discounted means to purchase a direct financial stake in the company 800 occupations from
the Bureau of Labor Sta-
To determine the “going rate” for your new employee, do some research tistics, www.bls.gov/oes
to determine how much other companies pay. Keep in mind that you
want to look for comparable pay based on job duties, location, industry,
and business size.
122 | SIX-WEEK STARTUP
Discrimination. It’s not good business. It’s not good behavior. And it’s against
the law. In virtually all situations, it is illegal to discriminate against employ-
RED TAPE ees because of race, religion, sex, or national origin. In many situations, it’s
ALERT! illegal to discriminate on the basis of age, physical disability, or sexual ori-
entation. You may not discriminate in hiring, promotion, pay, or treatment.
Moreover, it is your responsibility as an employer to create an environment that is not hostile
to any individual or group based on such factors. You must also make “reasonable accom-
modation” to employees’ religious observance needs, such as allowing them time off on their
sabbaths or holy days or wearing articles of religious attire (unless there is a significant safety
concern). Ask your attorney about conforming to regulations laid out in the Civil Rights Act,
Americans with Disabilities Act (ADA), and other anti-discrimination laws.
Benefits
When a potential employee—especially a well-qualified employee—
considers accepting a job, they’re going to weigh many things besides
simply how much the job pays. They’re going to look at the full range of
benefits they receive—things such as health care, vacation, retirement,
sick leave, and more. In human resource terms, this is called the “pack-
age,” and employees always consider the total package of benefits they’ll
receive.
You’ll be surprised at how few benefits you’re actually required to offer
by law. In most states, you don’t even have to offer sick leave, let alone
health insurance. So why bother? Consider the upside of providing good
benefits:
n Acompetitive benefits package, especially one with good health insur-
ance, helps you attract and retain great employees. Offering insurance
makes you more competitive with other employers.
n Employees will often accept better benefits in lieu of a higher salary,
which can translate to financial savings for you.
n When it’s tax time, you can deduct the cost of benefits.
n Your
own benefits—especially health insurance—costs substantially less
when you purchase them as a group rather than on an individual basis.
WORKSHEET recruiting employees
What features of your company and/or specific job do you want to mention in your ads or listings?
What unusual or particularly appealing aspects of your company and/or specific job can you describe that would
make you stand out from others?
Schools/colleges/universities:
Career fairs:
Trade organizations:
Other organizations:
Bulletin boards:
Unemployment offices:
Former employees:
Personal network:
Competitors:
Others:
124 | SIX-WEEK STARTUP
Training
Just as you have to continually improve your own skills, you want to
continually improve the capabilities of your employees. The best compa-
nies make a strong commitment to ongoing training and education.
Often the easiest way to provide training, especially for a small company,
is to pay for employees to attend outside seminars or classes. These are
offered by a wide range of providers. As your company grows, you may
want to develop some in-house training programs or bring in seminar
leaders or speakers.
Don’t just provide training for specific skills. While these may be neces-
sary, it’s also beneficial to educate employees in broader areas, such as
overall business strategy, industry trends, etc. The smarter, more knowl-
edgeable an employee, the more he or she can contribute to your success.
input counts. When you allow your employees to think about how to
solve problems, not just carry out specific tasks, you can unleash an
amazing amount of creativity and energy.
Being a boss is tough. It’s one of the most demanding challenges of run-
ning a company. You have to inspire, lead, motivate, discipline, and
reward. Some of the most important leadership skills are:
n Communicating goals: Let people know why they are doing some-
thing, not just how to do it; employees are far more motivated when
they understand the purpose of a task.
n Setting standards:You are responsible for establishing—and demon-
strating—the standards you expect others to maintain.
n Being fair:Make sure your standards are reasonable and fair, and that
goals are actually reachable.
Tells employees what needs to be done Sets high-level goals and strategy; establishes clear
standards and values
Trains employees (or arranges for training) on how Keeps the business on track to reach those goals
to do their jobs well
Fixes problems when they do occur Empowers others to take action to fix problems
126 | SIX-WEEK STARTUP
Start It Free n Listening: Learn to talk with and not just talk to your employees;
enlist their suggestions and set goals together.
Once you have your
team assembled, you’ll n Making decisions: The buck has to stop somewhere; employees look
need to find a way to to their leaders to make choices and stick with them.
manage projects and
tasks. Project manage-
Rewarding and acknowledging
ment applications Asana
(https://asana.com), Everyone wants acknowledgment for a job well done. Few things are
Wrike (www.wrike.com), more dispiriting than to excel at a task and then have your hard work
and Teamwork (www. ignored. Moreover, it’s only human nature to try harder to please those
teamwork.com) offer who appreciate us than those who ignore us.
free versions to get you
started. As your com- Give credit to all employees who do their job well, with particular
pany grows, you can add rewards for those who perform exceptionally. Give praise quickly and
paid premium features publicly. If you need to discipline an employee, do that privately. Find
to each these products. fun or creative ways to congratulate people. But often, just a public
“thank you” or a round of applause shows that you’ve noticed their con-
tribution. Take time to celebrate successes, especially with everyone in
the company. It’s a morale booster.
Recognizing that employee turnover is costly, especially in a small com-
pany, think about how to build an atmosphere where employees are
likely to want to stay.
“thank you” can make your staff members feel that they’re a valuable,
contributing part of your team. Recognition has been shown to be
an extremely positive motivator of employee behavior.
5. Reward accomplishment. Rewards reinforce behavior. Even small
rewards—whether cash, promotions, time off, gifts, something as
simple as a candy bar or certificate of achievement—show that you
appreciate what they are doing for you and your business and keep
employees wanting to do more.
So what kind of boss will you be? Will you have the skills to lead your
company rather than micromanage your employees? Can you create an
environment that encourages employees to do their best? Fill out the
“My Leadership Skills” worksheet to evaluate your own experiences and
abilities as a leader. See page 128
Rate yourself in each area below as either excellent, good, fair, or needs work.
Communicating goals
Setting standards
Listening
Patience
Training others
Constructively communicating
problems/disagreements
Accomplishment #1:
Find and secure a location
How important is location to the success of your business? If you have a
business serving a particular neighborhood or community, you need to
be physically located in or near that area. If you’re in retail, the choice
of location is absolutely critical and may determine whether you have
enough customers to stay in business. A factor as seemingly insignificant
as which side of a particular street you’re on can dramatically affect the
amount of customer traffic you’ll receive.
And then there are lots of companies that provide services from a dis-
tance (thanks in large part to the Internet) so business needs don’t direct
their choice of location at all.
Even if the site of your business isn’t critical to your revenues—for example,
if you deliver your services at client sites, or if you sell your products solely
online—the choice of your neighborhood has an impact on how you and
your employees feel about coming to work. A pleasant building, in a safe
neighborhood, with nearby parking and friendly neighbors can make work
more enjoyable. It can even help in recruiting employees.
Many entrepreneurs know exactly where they want to work—at home! Work-
ing at home can be a great advantage but it also presents some challenges
especially if children or a spouse are there. Planning your home office—its
space, storage, and policies—helps you make the most of this arrangement.
Some people run their businesses almost entirely from their vehicles—
cars, pickups, food trucks, vans. If you work from a vehicle, plan that
“office,” too.
In this section, the task of finding and securing your location depends
on what kind of space you’re planning for your business, either:
n rented space n home office
n office in a vehicle n shared space
Go to the section appropriate for your business to see the checklist asso-
ciated with your needs.
OPTION a:
Rent space
My Checklist:
Decide on the necessary attributes of your location
Meet with a real estate agent
Compare properties
Consider whether you need more than one location
Privacy: Does the office have sufficient privacy for my business needs?
Quality of the space itself: Does it feel welcoming and make showing
off my merchandise easy?
Check It Out Since you are just starting out, and if your company has just one or two
When setting up a retail
staff people, one approach to securing office space may be to sublet space
shop, you’ll need to from another company or to find a coworking space (see page 151 for
know the demographics more information). This gets you up-and-running much faster, since it
of the neighborhood. may be set up with furniture, Internet access, conference room, and the
Sperling’s Best Places use of office equipment (copiers, printers, fax machine). It may also give
(www.bestplaces.net) you the flexibility of a short-term or month-to-month lease.
includes comprehensive
information on county, Retail: Location, location, location. One of the most important consid-
city, and neighborhood erations for a retail business is the choice of location. Do you want to be
demographics across the
in a mall? On a popular pedestrian street? In a particular neighborhood?
U.S. For more resources
for researching a market, If your business is easily seen by passers-by (such as in a mall or well-
see pages 58–60 in
trafficked street) you can save considerably on marketing and advertising
Week Two.
costs. Of course, these locations typically charge higher rent. However,
paying higher rent to get a more visible and accessible space may be well
worth it.
Also consider whether you need your own facilities or whether contract
manufacturing facilities are available. Some industries have contract
manufacturing or production facilities (such as contract kitchens) that
give you the flexibility to start up without investing large sums of capital.
Warehouse/Storage: Some facilities are used primarily for storage. In
these situations, you have many of the same concerns as manufacturing:
shipping, docks, utilities, safety, access, security, and proximity to dis-
tributors. Be particularly cautious of environmental considerations that
may affect the products or materials you store.
Use the worksheet “Things to Consider When Renting Space” for a
more detailed checklist of issues related to renting space. It includes
items of general concern if you are renting space, and items specific to See pages
the type of space you are renting. 134–135
for different properties. Make sure someone who’s looking out for your
interests reviews any leases or contracts you sign.
Compare properties
Once you start looking for space, you’ll need to know common commer-
cial real estate rental practices and terms.
Typically, you’ll be quoted rental prices on a “per square foot” or “s.f.”
basis. (If you’re subletting or renting executive office space, you might be
quoted a flat rate.) In most of the U.S., the square foot price is given on
an annualized basis (e.g., $24 a square foot); in parts of the western U.S.,
it’s quoted on a monthly basis (e.g., $2 a square foot).
Before you make your first call, familiarize yourself with terms brokers
and landlords toss around. Beware! Definitions vary from landlord to
landlord, so have them be clear about what’s included:
n Triple Net or NNN: You, the tenant, are responsible for all costs of your
portion of the building, including property taxes, insurance, utilities,
and maintenance. In other words, you pay these costs in addition to
your monthly rent.
n Full service or Gross: Your rent includes all—or some—of those
triple net costs, so you need not pay them separately. It’s most likely to
include taxes and insurance. Ideally, it includes utilities, janitorial, and
perhaps—if you’re subletting—Internet access.
n Modified Full Service: The rental price includes some, but not all, of
triple net costs. Typically, utilities and maintenance are excluded.
n CAM or Common Area Maintenance or Load Factor: An additional
amount—usually a percentage of your base rent—you’re charged for
common areas you share with other tenants, such as halls, bathrooms,
entryways. So while the space you’re renting may be 1,000 s.f., your
landlord may charge you for 1,200 s.f.—the extra 200 s.f. you’re pay-
ing for is the CAM fee.
n T.I. or Tenant Improvements: In some cases, the landlord, at their own
expense, will be willing to make improvements or changes to the space
to accommodate a tenant’s specific needs. The larger the space, the
longer the lease, and the softer the rental market, the more willing a
landlord is to make improvements. Make it very clear in the lease what
improvements will be made—and paid for—by the landlord.
WORKSHEET location/space comparison chart
Length of lease
(option to renew,
at what rent?)
What’s included?
(utilities, janitor,
data lines?)
What am I respon-
sible for? (utilities,
janitor, data lines?)
Insurance issues
Advantages
Disadvantages
Other:
140 | SIX-WEEK STARTUP
Whether you use your space for retail (a store), administrative (office), man-
ufacturing (a plant), or storage purposes (a warehouse), you face many of the
same considerations. The worksheet “Location/Space Comparison Chart”
and the checklist on pages 134–135 can help you as you shop. You may also
See page 139 want to use the checklist as a basis for negotiating terms with your landlord.
That brings us to the question of how long a lease to ask for. This
depends on the stability and stage of your business, the quality and price
of the space, your future plans, and your comfort level with taking on
a long-term obligation. As a new business, you may be better off with a
short-term lease, even if rents increase in the future or you have to move.
If you take a long-term lease, make certain you can sublet it.
And remember, before you sign any contract, including a lease, go over it
with your lawyer first.
option B:
Set up a home office
My Checklist:
Find the space to work
Figure out your phone, fax, and Internet connections
Plan how to meet with customers
Decide whether you need a separate business address
Understand home-based office tax deductions
n A good chair. Getout of that folding chair and buy yourself some-
thing comfortable enough to sit in for hours. Your shoulders and back
will thank you.
142 | SIX-WEEK STARTUP
n Good lighting. Most homes don’t have sufficient lighting to work all
day, so in addition to overhead and indirect lighting, get a desk light.
Don’t put your computer monitor directly in front of a window (you’ll
squint all day), and watch for glare from other windows.
n Heaters or air conditioners. The temperature in your office is more
than just a matter of personal comfort (which is very important). If
you have equipment in your office, you need a stable temperature. I
ruined a computer hard drive because my office was in a room that got
very cold at night and condensation formed on the drive.
n Storage. When you run a business from home, you accumulate
stuff—a lot of stuff! You need someplace to put it. Purchase an office-
type storage cabinet or put shelves up in a closet. Put stuff you need
to use frequently within easy reach. Trust me, you’ll underestimate the
amount of storage space you need.
n Electricity. Surgeprotector strips have the benefit of increasing the
number of your electrical outlets, but be careful not to overload circuits.
Buy the kind of surge protectors that can handle “transformers”—those
big electrical plugs on many technology devices.
Of course, you’ll need to have Internet access wherever you are. Generally,
you’ll choose from cable, DSL, or satellite. In addition to evaluating cost,
look at the speeds of data transmission and how that will be affected as you
add users.
W EE K F O U R | 143
If you’re going to meet with others regularly, ideally, you want to set up
your work space separately from your family surroundings. If possible,
have a separate entrance or at least a path to your office that doesn’t go
through a messy playroom or kitchen. If you’re meeting clients infre-
quently, or on a regular schedule, you may be able to use your own living
or dining room as a meeting space. Just make sure you don’t violate any
city zoning laws, homeowner’s association rules, or lease agreements.
Also make sure the rest of the family, if any, know to stay away!
What if you don’t want customers in your home but need to meet them
somewhere other than their offices? Look for other, “neutral” locations,
such as a lunch meeting in a restaurant or a morning meeting at the local
coffee house. If you have an ongoing need, find another company from
which you can sublet or rent a meeting space or conference room on
an hourly basis (such as a small law firm). Online you can also find and
book conference rooms and meeting spaces that you rent by the hour.
See a list of these booking sites in the Check It Out sidebar on page 153.
If you use only your home address, are you comfortable putting it on
business cards and marketing brochures that you hand to strangers, or
put on a website where the world can see it? If you don’t put any address
on these marketing materials, you might seem less than professional.
One alternative is to get a post office box from the U.S. Postal Service.
The problem, however, is that then your business address is only a post
office box—or P.O. Box—number. That may make your business seem
144 | SIX-WEEK STARTUP
You have an additional tax savings option on your home office if you Check It Out
qualify, and if you choose to take it—the home office deduction. The The IRS answers ques-
home office deduction allows you to deduct a portion of your rent or tions about the tax
implications of running
mortgage based on the percent of your apartment or home used exclu-
your business from your
sively for business. That can be a nice extra tax deduction for you. home. www.irs.gov/
taxtopics/tc509.html
However, there are many considerations before you take the home office
deduction. You have to meet the IRS’s qualifications, and this is one
deduction that frequently leads to an audit. Also, there are tax implica-
tions if you later sell your home. So you certainly want to discuss the
home office deduction—and whether you should take it or skip it—with
your accountant or tax advisor. Use the guide “Questions to Ask: On
Home Office Deductions” below to get your conversation started.
QUESTIONS TO ASK
on home office deductions
What percentage of my rent or mortgage can I deduct?
Can I deduct costs of remodeling? Rewiring?
Can I deduct these expenses the first year, or do I have to capitalize them over a number
of years?
Is it wise for me to take the home office deduction?
What are the tax implications if I later sell my home?
What percentage of my phone or Internet connection costs can I deduct?
What percentage of my utilities or other expenses can I deduct?
What furniture and equipment expenses are deductible? Office supplies?
What transportation expenses can I deduct for getting from my office to customers?
Can I deduct expenses for artwork, decor, sound systems, or other amenities in my
home office?
What other business expenses can I deduct?
146 | SIX-WEEK STARTUP
But also make certain you know when your “free” time is and when your
workday is over. It’s only fair to others—and yourself—that you “leave”
the office after hours and go “home.”
Be clear with guests about your spare time: Whether your office is
in the guest room or the next town, having guests can be a strain on
any home-based entrepreneur. Often, guests don’t understand how self-
employed people structure their workdays or work weeks.
Allow yourself some time to spend with visitors, but be clear about when
you’ll be with them and the limits on your availability.
Let prospective guests know in advance how much time you’ll be able to
spend with them, so they’ll understand the situation before they arrive.
Put this in the most positive light: “I’m delighted I’ve been able to cancel
my meetings for Thursday afternoon to spend with you. Until then, I’m
sure you’ll enjoy exploring the city on your own.” If you need to, make
up a list of sights or keep brochures on hand so visitors can find ways to
entertain themselves.
Of course, even the best-laid plans may fly out the window when the in-
laws arrive!
Don’t imagine, either, that you can just hand your kids off to a friend or
neighbor; tomorrow the neighbors’ kids may be in your backyard.
If you know you’re going to use your vehicle for business, develop a
mobile office plan. There are many commercially available products to
outfit cars and trucks for specific purposes, including most kinds of con-
tractors or trades. There are even “desks” for your front seat.
Since your vehicle is your office, you’ll also want to ensure that its con-
tents are safe. You probably don’t want to store the only copy of valu-
able documents or records in your vehicle. Where will you keep those
instead? Consider where you will park your vehicle overnight; you want
to make sure it’s safe and secure.
When you get insurance, make certain your policy covers not only the
vehicle itself but also your “office” contents or equipment, especially if
you regularly carry expensive tools or equipment. And, of course, talk to
your accountant or tax advisor about deductions for your mobile office.
Use the worksheet “Mobile Office Plan” to assist you in planning your
“office” in your vehicle. See page 150
WORKSHEET mobile office plan
What I will use my mobile office to do: (check those that apply)
Other issues:
Issue My Solution
Cell phone and accessories
Storage
Writing surface
Office supplies
Work equipment
Climate control
Security
Safety
Insurance
Computer use
Internet connection
Parking
Other issues:
W EE K F O U R | 151
OPTION D:
Search for shared space: Incubator,
accelerators, and coworking spaces
The classic image of the would-be entrepreneur hoping to launch the next
Apple or Google is someone working on a fledgling enterprise in a garage or
dorm room. But working from home can be awfully lonely, and if Mom, the
kids, or hubby keep interrupting, it’s hard to create the next big thing.
Today, entrepreneurs have an alternative—spaces dedicated precisely for
early stage and novice small business owners. While these launch spaces
are exploding in tech-heavy places such as Silicon Valley and New York,
coworking, entrepreneur-friendly office spaces are popping up all over
America.
The following list outlines loosely the different types of shared working Check It Out
options for new businesses. Does renting a desk in
a “coworking” space
n Incubators. Prospective early stage and prelaunch companies must make sense for you?
apply for a spot in these types of spaces, and typically competition is Find available spaces at
high. You do not pay rent. In fact, expect to receive money and hands- Liquidspace (https://
on guidance as well as space in return for equity in your company. This liquidspace.com),
equity costs dearly in the long run, so make sure you are working with WeWork (www.wework.
com), ShareDesk (www.
people who have a proven track record of success.
sharedesk.net), Regus
n Accelerators. Thesehelp nurture high-growth companies after the (www.regus.com), and
incubation stage. The best accelerators help high-potential companies Premier Business Centers
grow quickly through introductions to customers, financiers, or key (www.pbcenters.com).
employees. They may charge rent or take equity. True accelerators are
highly selective.
n Coworking spaces. With these straightforward, turnkey rental spaces,
you get a desk or office—either assigned or drop in—as well as Internet
access, use of conference rooms (either included or for an extra fee),
and often some kind of coffee service or even a cafe. You do not give up
equity and typically no lease is required. They are not very selective.
Would-be entrepreneurs are themselves a lucrative market, and opportun-
ists have moved in to exploit their desire for exciting work environments
and their need for short-term, small space. So be careful when considering
these spaces. Make sure the costs are fair for what you receive, and don’t
give ownership in your company away without significant reward.
152 | SIX-WEEK STARTUP
Accomplishment #2:
Design your work space and
production process
My Checklist:
Design your layout
Design your production process
Order/install utilities and facility improvements
Get furniture and equipment
Order inventory and/or raw materials
When thinking through your needs for office and administrative space,
ask yourself the following questions:
n What are the necessary functions of your business?Administrative,
production, shipping, and the like, and how much space do you need
for each?
For
n Do certain functional areas need to be near other functions?
example, should packing be near shipping or bookkeeping near cus-
tomer service?
n How will you divide the space between different functions? Will
you want permanent partitions, such as walls, or temporary or partial
partitions?
n How many employees will work in each area of your space?
n How much equipment will you have and how large is it?
To Do Notes
Other:
154 | SIX-WEEK STARTUP
Don’t forget to provide adequate space for all the usual business support
functions—copying, faxing, mail preparation, bathrooms, and so on.
One way to design your space is to sketch a layout on a design grid, like
See page 156 the one provided for you in the worksheet “Floor Plan Layout.” Start
with a preliminary layout idea, measure your square footage, and then
assign each square on the grid a measurement—1 foot, 10 feet, and so
forth. Grab a pencil and start scribbling. You may want to make extra
copies of the grid in case you need to start over.
Of course, you could hire an interior decorator or ergonomics specialist
to help you with your floor plan, but resist spending more money than
you need to now.
n How will you pack your products? What materials will you need for
packing? Where will you store your packing materials? Where will
you do the packing?
n How will you prevent theft or loss?
One of the first things you’ll want to take care of is ordering any utilities
you need: telephone, electricity, gas, Internet, water, and waste disposal.
It may take more than a week for the utility company to be able to
install necessary wiring or turn on your service.
You will most likely need to install or adjust the wiring or location of
utilities to meet your needs. While utility companies provide this service,
you may want to hire private contractors to do the work instead.
Don’t forget to look at fixtures in your new space. Is there adequate over-
head lighting? And what kind of signage will you need? Signs are par-
ticularly important for retail businesses.
Use the “Office Move-in Checklist” for planning your move into a new
space. See page 153
WORKSHEET FLoor plan layout
Use this grid for planning your office or production area layout. Each square is 1/8” x 1/8”.
For additional grid space, use graph paper.
WORKSHEET designing my production process
As you outline the steps involved in your production process—whether you produce a product
or a service—consider the following items, how long the steps take, and who is responsible.
BUY OR LEASE?
WHAT
WOULD Rhonda’s first rule: Purchase less expensive items; lease more costly ones. It
RHONDA generally doesn’t make much sense to lease a fax machine or printer; they’re
DO? less than a few hundred dollars. But if you need a major piece of equipment,
don’t tie up your cash.
Rhonda’s second rule: If you’re uncertain about your long-term plans or needs, take short-term
leases on your equipment. Even if this means making higher monthly payments in the short
run, you want the flexibility of getting out of your lease if your plans change.
Rhonda’s third rule: Check the tax implication of leasing versus buying: Some deductions can
make leasing actually cost less than buying, while “expensing” purchased equipment may lower
income taxes.
And Rhonda’s most important rule: Don’t get more than you need. Cash in the bank beats a
nice conference table any day.
Use the “Furniture Shopping List” to compare furniture and keep track
of what you’ve ordered. Then use the worksheet “Equipment Shopping See pages
List” to keep track of the equipment you’ll need. 162 and 163
Leasing is tempting: You’ll spend less money now. That frees up your
capital, an important consideration for a young and likely cash-strapped
company. It also may mean that you’re able to upgrade or change your
equipment sooner than if you make an outright purchase. In a new com-
pany, this can be desirable since your business plan is still evolving.
160 | SIX-WEEK STARTUP
However, in the long run, you’ll almost certainly end up paying much
more for a piece of equipment or furniture that you’ve leased rather than
bought outright.
Some vendors, especially of expensive equipment, may offer their own
financing, whether you’re purchasing or leasing. Ask! Supplier-financed
leases may be an attractive leasing option, as the vendor may make con-
cessions on either the price of the equipment or the financing costs to
capture your business (and will sell you continuing supplies or mainte-
nance). Ask also whether this kind of financing enables you to upgrade
to newer equipment during the life of the lease or loan.
Warranties/Service contracts: When shopping for equipment, evaluate
the warranties, service contracts, and technical support offered or available as
part of the purchase. A good warranty may be worth a substantial amount of
money, especially if repairs are very costly. The same is true for free or low-
cost technical support if the equipment is difficult to operate.
You may find that the cost of purchasing extended warranties, service
contracts, or additional technical support is well worth the peace of
mind you get from knowing that you won’t be hit with an unexpected
expense if something goes wrong.
If something does break down, how soon can you get the equipment
repaired? If a piece of equipment is crucial for your business, every day
lost while it’s broken is lost income for you.
To help you keep track of this equipment information, use the worksheet
See page 161 “Warranties and Service Contracts.”
Equipment:
Place Purchased:
Date Purchased:
Warranty Terms:
Expiration Date:
Contact Info/Phone:
Equipment:
Place Purchased:
Date Purchased:
Warranty Terms:
Expiration Date:
Contact Info/Phone:
Equipment:
Place Purchased:
Date Purchased:
Warranty Terms:
Expiration Date:
Contact Info/Phone:
Equipment:
Place Purchased:
Date Purchased:
Warranty Terms:
Expiration Date:
Contact Info/Phone:
Equipment:
Place Purchased:
Date Purchased:
Warranty Terms:
Expiration Date:
Contact Info/Phone:
WORKSHEET furniture shopping list
Desk chairs
Reception desk
Guest/reception chairs
Work/equipment tables
Filing cabinets
Lamps/lighting
White boards
Cubicles/space dividers
Floor coverings
Decorative items
Other:
Other:
WORKSHEET equipment shopping list
Try not to be dependent on only one or two suppliers. If you are, you’ll
have less flexibility on price, and you’ll be vulnerable if they experience
problems in their business. If you have very specialized needs, you may
be frustrated trying to find the supplies you require. Once again, indus-
try trade shows and associations are a good place to begin.
QUESTIONS TO ASK
A POTENTIAL Supplier
How long have you been in business?
What other customers do you serve in my industry?
What is your usual turnaround time on orders? What is the quickest time possible in
special circumstances?
What payment terms do you offer? How large a credit line will you extend to me?
Can you meet special packing or shipping requirements?
Do you have minimum order requirements? Are there discounts available?
Accomplishment # 3:
Research and purchase computers,
software, and other technology
My Checklist:
Develop an approach to buying technology
Choose a phone system
Choose software
Choose hardware
Get online
Meet your mobile needs
Find ways to get technical help
Technology is one part of your business you’ll love and hate at the same
time. Technology has enabled small companies to compete with large
ones and has dramatically lowered the cost of performing many business
functions. But dealing with technology can be an immense headache—
WORKSHEET supplier comparison chart
Range of Services/
Products Offered
Direct Costs
Additional Costs
Payment Terms
Order Turn-
around Time
Shipping Costs
Other Maintenance/
Support
Other:
Other:
W EE K F O U R | 167
Of course, in a new company, every dollar counts. That means you often
have to settle for less than you’d ideally desire. Fortunately, many low-
cost technology products—printers, copiers, and some computers—offer
excellent features that may meet your needs until your business has time
to get established.
When comparing your options in choosing technology products, here
are some questions to ask yourself:
n What features do you absolutely need? If your equipment won’t let you
do everything you need to do, then you’ve wasted money, even if you got
a bargain on that last laptop on the discount shelf. Consider what func-
tions you need to perform and make sure your technology can handle
those well. Having trouble figuring out what you need? Go to CNET
(www.cnet.com/reviews), ZDnet (www.zdnet.com/topic-reviews), or
engadget (www.engadget.com/reviews) for savvy reviews that speak your
language.
n Are your needs basic or complex? If your needs are fairly basic, you
can start very inexpensively, using low-cost online applications that
only require fairly low-powered computing devices. For instance, you
can find simple, cloud-based software applications—often for free—to
handle tasks such as word processing, bookkeeping, and customer rela-
tionship management (CRM). Because you access this software over
the Internet, rather than running it on your own machines, you need
only the most inexpensive computers.
Complicated or specialized tasks require more-powerful equipment and
software. For example, if in your business you will need to create high-
end presentations, you will need more-expensive graphics software and
more computing power to produce those. If you have a brick-and-mor-
tar retail store, you will need P.O.S. (point-of-sale) systems to keep track
of your sales and inventory. If you’re in a specific industry, there may be
a V.A.R. (value-added reseller) who can help you design and install the
appropriate programs and equipment you’ll need.
Generally, identify the processes you will need for your specific business,
then determine how much computing power those processes will actu-
ally require. But whenever possible, look to the cloud (Internet-based
applications) for solutions. Cloud-based versions enable you to scale up
or down as you add or subtract employees or as your needs change (as
they often do in a new business), and you can access cloud applications
W EE K F O U R | 169
months you will have paid more in consumables than you did for the
equipment. And office and discount stores usually carry only supplies
for or service the most well-known brands. So if you run out on a day
you’re under deadline, you could be in trouble if you have to order
your supplies direct from the manufacturer. Take all this into consider-
ation before buying.
n How cool do you want to be? While you probably don’t need the latest
and greatest gadgets, you will want to choose a machine for its good
design and ease of use, especially if you’re a one-person business who
works on a computer all day. The bottom line is you want to enjoy
using your equipment. So consider design and ergonomics as you shop
for technology—just make sure what you choose is compatible with all
your other purchases!
Fax/data lines
Voicemail boxes
Long-distance service
Cell phones/
smartphones
Will you have phone numbers in remote locations? Where should they ring?
How will you receive and direct incoming calls? Will you have a receptionist, an automated system, or an answering
service?
What types of on-hold features do you need? How can you transfer calls between phone lines?
Do you want or need features such as Caller ID, 3-way calling, call forwarding, etc.? How much do they cost?
Can you integrate your phone system with your database, other software, or a VoIP application? Can integration better
serve your business?
Can you integrate your phone system with other devices, such as cell phones? Can integration better serve your business?
172 | SIX-WEEK STARTUP
Choose software
Before you select your computers, think through your software needs—
and consider them carefully. Your choice of computers can largely be
driven by your software needs. If, for instance, you need powerful soft-
ware programs, you’ll probably need powerful computers. Also, it may
W EE K F O U R | 173
Other:
Inventory Management Specialty Software Specialty Software Specialty Software
176 | SIX-WEEK STARTUP
Disadvantages:
n Need a fast, reliable Internet connection
n Ongoing monthly cost, even when you don’t use it
n Privacy and security concerns, especially if you’re not careful
n If the cloud-based company goes out of business, you may lose your data
If you have highly specialized needs, turn to your industry association to
find out if software has already been developed for your type of business.
Industry-specific software can be considerably more expensive than basic
software, so be sure to talk with several users to find out if they’re satis-
fied with the product.
Another approach if you have unusual needs is to have software designed
or customized for your own use. However, customized software is more
expensive to purchase and maintain, and if you have problems, you may
not be able to find personnel to assist you.
See pages Use the worksheet “My Software Needs” to help you choose software
174–175 and to compare prices.
RHONDA very few have technology expertise on staff—most have to turn to outside consul-
tants to help them buy, set up, troubleshoot, and manage their technology invest-
DO? ments. To meet this need, a broad range of tech support businesses have sprung up
to offer tech support services to individuals and smaller businesses. Such businesses
can be a boon if you lack technical knowledge yourself. However, before hiring a tech consultant, call
your local Better Business Bureau, and always check references.
Choose hardware
It’s easy to get excited when you look at all the electronic gadgets and
goodies that are out there. Cool-looking monitors, oversized color print-
ers, and super-sleek computers are all very tempting (until you look at
the price tags, of course).
But buying hardware can also be stressful because there are so many
choices. There’s so much information out there about those choices—
much of it written in technobabble—and so much money on the line.
Once again, the thing to do is to plan before you shop. Your needs and
your pocketbook should determine your hardware choices. I’ve seen
new companies that start with all the latest hardware before they’ve even
developed a product or found a customer—and that’s not the way to
spend your money. Instead, buy what you need when you need it.
Almost every business needs the basics: computers, printers, monitors,
copiers, and a way to receive faxes. But you don’t need to buy it all at
once. If you’re starting out slow, you can make your copies at the local
copy shop. Or send and receive your faxes online or at a local business
center. For especially small businesses, you can consider multifunction
combination printer/fax/copier/scanner machines. These cost less than
buying each machine separately and take up less room. Alternatively,
don’t scrimp on things you really need. If you’re going to do a lot of
printing, for example, you will want a laser rather than an ink-jet printer
because of the superior quality and speed.
178 | SIX-WEEK STARTUP
Use this worksheet to identify hardware you’ll need in specific areas of your business.
To outline your needs for software, use the worksheet on pages 174–175.
Admin/
Accounting Sales Other
Production
Computers
Tablets, smartphones,
and other mobile
devices
Printers
Copiers/fax
machines
Other peripherals
(scanners, etc.)
Internet access
devices
Network/servers
Cables, surge
protectors, back-up
generators
Other:
180 | SIX-WEEK STARTUP
Get online
The Internet is as much a part of your business as the phone or mail. It’s
an essential communication and ecommerce tool. Virtually every busi-
ness uses it on a daily basis.
Internet connection. The first issue you’ll face is how to connect to the
Internet. The options keep changing, so you’ll want to stay abreast of the
choices in your area.
To get online, you’ll need an Internet Service Provider (ISP). An ISP
provides you with access to the Internet, and, typically, with your email.
Most ISPs also offer additional services for additional fees. Such services
may include hosting your company’s website or registering your com-
pany’s domain name. Other companies can provide additional related
QUESTIONS TO ASK
a technology consultant
When selecting a consultant or technician, keep these questions handy:
How long have you been in business?
Do you do this full-time or is it a part-time activity?
Which software programs do you have experience with?
Which hardware do you have experience with?
Have you worked with companies in my industry before?
Have you worked with companies my size before?
How much do you charge?
If you charge by the hour, will you give me a written estimate of how many hours my job
will take?
How much time do you have available?
Are you available for quick help in “emergencies”?
Are you available to answer tech-related questions over the phone?
Do you guarantee your work?
Do you have references I can contact?
WORKSHEET comparison chart: internet hosting companies
Use this worksheet to compare options for Internet Service Providers (ISPs).
Connection Speed
Hardware Required
Installation Cost
Monthy/Ongoing Fees
Services/Capacity Provided
Additional Services
Available
Reviews/
Recommendations
Other Considerations:
182 | SIX-WEEK STARTUP
Once you have your own domain name, you can use that for your com-
pany’s website address and for your email (e.g., Rhonda@PlanningShop.
com). This obviously looks more professional than having a more generic
email address (e.g., [email protected]).
More importantly, you can use your domain name with virtually any ISP,
website hosting company, or email program. This gives you the flexibil-
ity to shop around, use the email program that best fits your needs, and
change providers if desired.
Ask your ISP, a technical consultant, or a tech-savvy friend how to get set
up to use your own domain name with your ISP and email program.
W EE K F O U R | 183
Website: In Week Six, you will set up a company website, with an eye
to how you want to market your products or services. During this week,
you want to make sure you consider who will host your website as you
go about choosing an ISP. After all, you may use the same company that
provides you with online access to host your website.
It’s not necessary, of course, to have one ISP provide you with both
Internet access and website hosting services. However, it is frequently less
expensive and less hassle to have one company do both, especially if you
have modest requirements for your website.
However, if you want unique features on your website, you may want to
use a company that specializes in hosting business websites. The types
of features you might want to include on your site are a blog, online
forms for customers and prospects to fill out, a connection to a database
of information (such as a catalog), or a shopping cart to enable custom-
ers to make purchases. Ask other entrepreneurs for recommendations of
website hosting companies that they use.
You might also want to search for website hosting companies that spe-
cialize in your industry. These might have “turnkey” solutions for you
that can get your website up and running faster than if you had someone
design a website for you. They might even provide some kind of joint
marketing services. Check with your industry trade association for names
of website service providers. Check It Out
Running a restaurant?
Network: You may want to build your own company internal net- Check out Let’s Eat
work—a local area network, or LAN—so all your computers can work (www.letseat.at) for
together. There are many advantages to having your own network, a website builder
including the ability to share office equipment, share and store data, designed just for restau-
rants. Photographers can
provide security, handle Internet access, and maintain your own inter-
try Zenfolio (www.zen-
nal company email. folio.com), SmugMug
(www.smugmug.com),
But having a network is also more complicated than having stand-
or PhotoShelter (www.
alone computers. You may need someone who can maintain the net- photoshelter.com).
work. You’ll also need wiring and hubs or routers to connect all the
machines, and you may decide that you want a dedicated “server”—a
computer whose sole purpose is to handle email, store and/or back up
files from other computers, route print jobs to the office printer, and
so forth.
184 | SIX-WEEK STARTUP
n Dropbox
n Box
n Google Drive
n Zoho Docs
n Hightail Spaces
Note-Taking Apps
If you’re like me, you come up with half a dozen great new business ideas
before breakfast. Capture your ideas, store your research, and find your
images and documents quickly.
n Evernote
n SimpleNote
n FreshBooks
n Harvest
n Wave
n Bill.com
n Mint
n Shoeboxed
n Everlance
Fundraising
Raising money through crowdfunding? Track your campaign’s progress,
respond to comments, engage with backers, and post updates on the run.
n Kickstarter
n Indiegogo
186 | SIX-WEEK STARTUP
n Linkedin Recruiter
Project Management
Teamwork without email—on the go. Stay on top of projects and get
things done with your team, without hundreds of emails back and forth.
n Asana
n Wrike
n Basecamp
n Teamwork
n Wunderlist
n Any.do
Communications
While you’re out on the road growing your business, you’ll need to com-
municate with customers and manage your team back home.
n Skype
n Google Hangouts
n WhatsApp
n Join.Me
n Webex
n Hootsuite
n Buffer
n Crowdfire
W EE K F O U R | 187
Newsletters
With these apps, manage and monitor newsletter campaigns that you’ve
created in advance on your desktop.
n MailChimp
n Constant Contact
n Emma
n Aweber
Scheduling
With a scheduling app, you can say goodbye to back and forth phone
calls and emails. Take online bookings, accept payment upfront, organize
your appointments, send clients reminders, manage appointments, and
more, all on your mobile device.
n Square Appointments
n HouseCall Pro
n Acuity Scheduling
n Timely
n Eventbrite Organizer
n Evite
Website
Your website is your customers’ window to your business. Work on your
site, view activity, manage your online store, write and posts blogs, and
view traffic on the go.
n Weebly
n Wix
n Strikingly
n Jimdo
n PayPal Here
n QuickBooks GoPayment
188 | SIX-WEEK STARTUP
n Shopify
n Etsy
n Infusionsoft
n Insightly CRM
n Zoho CRM
n Apptivo
n Method CRM
Customer Service
Without customers, you have no business. Keep yours coming back by
providing stellar customer service.
n Freshdesk
n Zendesk Support
n Zendesk Chat
Travel
These apps help ensure you get the most out of your investment in busi-
ness travel, from rewards tracking, to booking, to getting the lowdown
on the city you visit.
n AwardWallet
n Tripit
n Hopper
n Kayak
n TripAdvisor
n Lyft
n Uber
n Waze
n Dwellr
n LocalEats
W EE K F O U R | 189
If you can find reliable consultants or technicians, use them. Especially when
you first get started, use the assistance of a consultant to help you plan and
install your equipment and software. Ask for recommendations, especially
from other entrepreneurs, of technology consultants they’ve used. And make
sure they speak in nontechnical language that you can understand.
Accomplishment #4:
Consider how you will distribute
your products
If you are a manufacturer, you will almost certainly use other parties to
bring your product to market—distributors, wholesalers, or retailers.
Choosing the right distributor and retailer for your product is vital to
your success.
Check It Out
For a list of associations
These intermediaries provide a variety of assistance in getting your prod- of distributors in dozens
uct or service to customers, including: of industries, check the
membership list of the
n Their sales efforts and sales team National Association of
n Their reputation and relationships with customers/retailers Wholesale Distributors.
n Their expertise in understanding the market www.naw.org/about/
assoclist.php
n Their advertising and marketing efforts
n Their additional services to you—warehousing, shipping, etc.
n Their additional services to customers—shipping, product training or
Distributors: Few decisions directly affect your business and your financ-
es as much as the selection of a distributor. To a large extent, they control
whether or not your products have a fair chance to ever reach potential
customers. If your distributor can’t get your products on retailers’ store
shelves, you won’t be able to make sales.
190 | SIX-WEEK STARTUP
When you enter into a distribution contract, here are some considerations to negotiate.
Be certain to have any and all agreements reviewed by a competent attorney.
What percentage do
they charge? When
and how often do they pay
you, and what holdbacks
from your payments, if any,
do they make?
Who is responsible
for nonpayment by
their customers?
Accomplishment #5:
Design procedures for handling
administrative tasks
Once your business is up and running, you’ll quickly find yourself deal-
ing with a wide variety of ongoing administrative tasks. If you don’t
prepare to deal with these, inevitably you’ll soon feel overwhelmed and
things will start falling through the cracks.
WORKSHEET retailer comparison chart
What promotions,
advertising, or other
sales efforts will they
make?
What “co-op” advertis-
ing or other promo-
tions will you have to
participate in?
What charge-backs
or other fees do they
take?
What is their
reputation with
other wholesalers?
Other:
194 | SIX-WEEK STARTUP
Bookkeeping/accounting:
n Paying bills
n Sending invoices
n Collecting on outstanding invoices
n Reconciling bank statements
n Transferring funds from accounts
n Preparing forecasts and financial statements
n Meeting tax deadlines and completing tax forms
Order fulfillment:
n Order taking
n Packing
n Shipping
n Tracking shipments
n Handling customer complaints
n Ensuring sufficient supplies and inventory levels
W EE K F O U R | 195
n Reduce shopping time: Keep a list of things you need so you reduce
repeat trips. Make certain you have enough of supplies you use regu-
larly. Order online and have supplies delivered.
n Eliminate errands: Keep a list of errands and do a number of them at
one time. Schedule your errands for the end of the business day, rather
than prime time. Use delivery (and pickup) service for frequently used
services (such as copy companies and shipping).
n Use your “Vital Statistics” list:
In Week Three (page 93) you started
developing a list of key company data. You’re likely to be asked this
information on many forms or dealing with suppliers or government
agencies. Have it handy so you don’t have to go digging through files.
n Make color-coded files: Use files of different colors—or at least dif-
ferent colored labels—so you can quickly find the kind of information
you need on your desk or in your file drawers. You might want to use
blue files for client project-related documents, green files for financial
information, yellow files for suppliers, or whatever works for your
company. Mark your files by year, so you can easily archive older files.
n Keep frequently used files handy: Get a desk with at least one file
drawer so you can access the files you need regularly without having to
get up and go to a filing cabinet.
n Become an email power user: Take time to learn a few key tasks in
your email program, particularly setting up folders and filters. Create
your address book or email “groups” for those you’ll email regularly.
n Handle mail once: The ideal way to manage paper is to handle incom-
ing mail only once. In other words, as soon as you read it, deal with it.
If you don’t need it, throw it out. If it should be filed, file immediately.
If you have to take action, do so. Of course, this isn’t always possible,
but get in the habit of deciding what to do with stuff as you get it.
for example, that you don’t have an on-staff accountant or lawyer, but
instead use the services of outside professionals on an as-needed basis.
Likewise, you probably don’t keep a janitorial staff, but outsource that to
a cleaning service.
With the Internet and related technology, outsourcing has been taken to
a new level. You can outsource your receptionist: calls from your office
can be routed transparently to a call center in another state, where some-
one answers your phone with your company name, tracks you down
on your cell phone if needed, and takes messages for you that can be
delivered to your cell phone via text messaging. Or you can outsource
your warehousing and shipping by having all orders for products trans-
mitted electronically to a business that fulfills all your orders remotely,
and updates your internal databases when an order is shipped so that a
customer can be billed.
Then there are cloud-based, or SaaS, applications. Rather than having to
buy hardware and software to do a certain task—let’s say, payroll —and then
hire someone to install, use, and manage that system, you can outsource the
entire thing. A number of SaaS providers offer payroll services on-demand:
you log onto their website, and securely enter payroll information into an
easy-to-use interface. The service generates all the forms, reminds you when
to make payments and how much, keeps track of payroll taxes and benefits,
and generally acts as your bookkeeper—for much less than it would cost to
buy the software and have a bookkeeper work on your premises. You can
outsource just about every business function there is this way—if it’s not a
core part of your business, there’s someone out there with the technological
tools and the know-how to do it for you.
Accomplishment #6:
Deal with insurance Check It Out
The National Association
One of the most frustrating expenses you’ll incur when running a busi- of Insurance Commis-
ness is the money you spend on insurance. After all, you can’t “see” what sioners has links on its
you’re getting. If this is your first business, you’ll be absolutely over- website to each state
whelmed by the different types of insurance you’ll need or want. insurance office website.
www.naic.org/state_
Figuring out your insurance coverage will be daunting. Guaranteed! So web_map.htm
you’ll need a good insurance agent, or two or three! Ideally, you’ll find
an agent who understands business insurance for companies of your size
198 | SIX-WEEK STARTUP
and industry. It’s best if they’re a “broker” who can offer you policies
from a number of different companies rather than just representing one
insurance company’s products.
If you don’t know any insurance agents, ask for referrals from other busi-
ness owners or from service providers. You’ll want someone whose advice
you can trust because you are likely going to rely on their recommenda-
tions for the type and amount of coverage you should have.
Also, check with your industry trade association. Many trade associations
offer lower-cost insurance specifically for the needs of companies such
as yours. But still be cautious: Just because a policy comes from a trade
association doesn’t necessarily mean it’s best for you.
When you sit down with an insurance agent, consider three aspects:
n Incentive:insurance you want because it’s desired by your workers
(including yourself ) such as medical, dental, life insurance, retirement
n Protection: insurance in case something unexpected happens: liability,
accident, fire, theft, business interruption
n Legal necessity: insurance others require—perhaps your landlord,
such as fire or liability, or required by state law, such as workers’ com-
pensation if you have employees; because the Affordable Health Care
Act requires companies with 50 employees or more to provide workers
with health insurance, most likely you will not have to provide this
coverage when just launching your business
Health insurance is the kind of insurance most desired by your employ-
ees. To keep costs manageable, you may want to look for health insur-
ance policies provided by:
n HMO—Health Maintenance Organization: HMOs cost less than
PPOs since the number of health care provider choices is limited.
n PPO—Preferred Provider Organization: for a wider range of choices
of doctors and hospitals that agree to set prices for services. Make
certain there’s a long—and good—list of choices for you and your
employees.
n POS—Point of Service plan: A POS plan is the middle-of-the-road
option in managed plans, falling between HMOs and PPOs in
terms of premium costs and provider flexibility.
W EE K F O U R | 199
Always ask about the strength and honesty of your insurance provider—
the company itself as well as the agent. You want to make sure the com-
pany is financially strong. After all, you need them to cover their policies
in case there’s a major disaster such as an earthquake or flood.
200 | SIX-WEEK STARTUP
Deciding what types and how much insurance to carry is always a jug-
gling act. You want to have enough coverage in case of problems, but the
costs can be discouraging, especially for a young company.
Use the worksheets “My Health Insurance Questions” and “Comparison
See pages Chart: Insurance Coverage” to help you plan and compare your insur-
201 and 202 ance needs.
Pros Cons
HMO HMO
Lower premiums than PPOs Limited provider choice
Minimal co-pays and deductibles Minimal or no out-of-network coverage
Free or cheap preventive care Need referral from primary physician
PPO PPO
Affordable premiums Higher premiums than HMOs
More in-network providers than HMOs May be difficult to find providers in some locations
Can go out of network Expensive to go out-of-network
POS POS
More affordable than indemnity plans Higher premiums than HMOs
Minimal costs staying in-network Need referrals from primary physician
Some coverage for out-of-network Costly to go out-of-network
EPO
Premiums generally lower than HMOs or PPOs Must choose providers within network
Lower deductibles and co-pays No out-of-network coverage unless an emergency
No referral needed for in-network specialists Less common so may be difficult to find
Indemnity Indemnity
Greatest choice of providers Most expensive
No referrals required May have most paperwork for policyholder
May be only/best option in some communities High co-pays and deductibles
Worksheet My Health Insurance Questions
How much can I afford to pay in premiums every month and still make payroll and my other monthly expenses?
How comprehensive do I want or need our health care benefits to be? For instance, do I just want to provide catastrophic
coverage or do I want to cover routine illnesses?
How do I feel about limits on choice of doctors or hospitals? Are those limits realistic in my geographic area? Will my
employees have sufficient choice of providers if they become ill?
What kind of group insurance plan makes most sense for the kind of employees I want to attract? (example: young
employees may be fine with high-deductibles, families most likely want coverage for routine procedures, older
workers may be concerned about prescription benefits)
WORKSHEET comparison chart: insurance coverage
Dental
Vision
Life/Disability
Workers’ Compensation
Fire
Loss/Theft
Business Interruption
Malpractice
(errors & omissions)
Vehicles
Unemployment
Offsite equipment
Offsite employees
Other:
Other:
week 5
week 1: lay the foundation
Accomplishment #1:
Deal with money matters
My Checklist:
Meet with an accountant
Learn the lingo
Take stock of your personal financial situation
Clean up your credit
Set up your books
Establish your prices
Open a bank account
Consider accepting credit cards
Prepare simple financial forecasts
Learn about taxes
Believe me, a good accountant can save you more than you pay them.
Some accounting firms can also provide you with bookkeeping or bill-
paying services or recommend a reputable outside bookkeeper. If your
business will require lots of invoices, bills, or bookkeeping, you may
want to ask about these options, especially if you don’t have the funds
to hire an in-house bookkeeper.
Read through this entire section before you meet with your accountant,
so that you have a more thorough understanding of the issues you need
to discuss.
Use the guide “Questions to Ask an Accountant” on page 208 when you
meet with your accountant for the first time.
QUESTIONS TO ASK
An accountant
What kinds of taxes will I have to pay? What are my tax deadlines?
How can I reduce my taxes? Which expenses are deductible, are nondeductible, or have to
be depreciated?
What kind of bookkeeping system should I set up? How can I set up systems to reduce the
possibility of theft or embezzlement?
How should I pay myself—salary or draw?—and what are the tax implications?
Should I use the cash or accrual form of bookkeeping?
Do I need to keep track of inventory? If so, what method do I use?
How do I handle payroll taxes?
Do I have to collect sales tax? When? From whom?
What are the implications of doing business in more than one state?
What kind of retirement program can I set up and how much can I contribute each year?
What kind of retirement programs can I set up for my employees?
What other accounting and tax considerations are there for my type of business?
n Your “burn rate.” Thisis how much money you go through each
month. This can be different than your fixed expenses, depending on
what you spend on variable expenses, such as marketing, temporary
help, buying new equipment, and so on.
n Variable expenses. These are the costs that change depending on
how many sales you make. In other words, if you run a sporting goods
store, your rent is fixed no matter how many golf clubs you sell, but
the amount you spend on marketing may change.
n Cost of goods sold (COGS). This refers to what it costs you to purchase
inventory to sell to others or to purchase materials to manufacture
your products.
n General and administrative expenses (G&A) or operating expenses:
The amount you spend to operate your business other than COGS or
sales costs. This includes all overhead expenses (such as rent, utilities),
salaries, marketing, and so on.
W EE K F I V E | 209
Savings
Spouse’s income
Home equity
Retirement funds
Tangible Assets:
Equipment
Furniture
Marketable skills
Specialized knowledge
Business experience
Certifications/credentials
Licenses, memberships
Intelligence
Other:
Other:
W EE K F I V E | 211
Right from the start, keep track of the money you invest in your new
company. There are important reasons for this. One, you want to be
certain you can take every tax deduction you’re entitled to, and without
records it can be a lot more difficult. Two, you want an accurate record
of all expenses and sources of income. And finally, you may want to treat
some of this money as loans you are making to your business rather than
as an investment. Ask about the tax implications of doing so when you
meet with your accountant this week.
Use this space to track credit card offers, credit cards you already have, credit card debt
you need to pay off, or other useful information about your credit cards.
There are other small business bookkeeping programs, such as Xero (www. Check It Out
xero.com/us) or FreshBooks (https://www.freshbooks.com), to name just
Compare features of
two. Both of these are online, cloud-based accounting programs. You may Quicken and the dif-
also be able to find industry-specific bookkeeping programs; check with ferent versions of
your industry association. However, be careful of getting programs that do Quickbooks, including
not integrate well with other standard programs (such as Microsoft Excel). an online version, at
www.quicken.com and
Accounting method: One thing you’ll need to determine is whether to https://quickbooks.
keep your accounts on a “cash” or on an “accrual” basis. Your accountant intuit.com.
Here’s an old joke: A store owner purchases pencils for ten cents apiece
and then sells them for a nickel. Noticing this bizarre behavior, his part-
ner asks, “How do you expect us to stay in business that way?” The man
replies, “Volume!”
products or services less than the competition. Low prices, they assume,
will generate sufficient sales to more than make up for smaller profits.
Competing on price alone is risky. Some discount outlets do build thriv-
ing businesses on low prices, but this strategy almost always means nar-
row profit margins, which in turn means less cash floating around your
company. With a small financial cushion, you’re vulnerable with every
slight increase in costs. The landlord raises your rent 5%? That may
be your entire year’s profit. And you’re at risk from competitors: If you
become a serious threat and they have deeper cash reserves, they can just
undercut your prices and wait until you’re squeezed out of the market.
Moreover, customers attracted solely by price are fickle. If they shopped
around a lot before choosing you, they’re probably going to shop around
continually. And as soon as someone has a lower price, you’re history!
Of course, when you’re just starting out in business, you may want to set
your prices lower (even much lower) than the competition. This gives
you a chance to build a customer base and get some experience. Especial-
ly if you’re in a service industry, you’re going to be learning a lot while
working for your first customers, so it’s only fair to charge them less.
In Week Two, you did some research on the prices competitors are
charging (see page 64), and that should help you get an idea of the mar-
ket as you establish your own prices.
RHONDA may not take the time to sit down and look at your financials. But you can’t
DO? manage your money without having the facts. At least once a month, pref-
erably once a week, look at your figures: accounts payable and receivable,
expenses, cash flow, and so on.
n Send them your bill! I’m always surprised by how many businesspeople, especially consul-
tants and professional service providers, delay sending out their invoices. You may feel uncom-
fortable asking someone for money, afraid of being challenged on how much you’ve billed, or
just too busy working. But the longer you wait to send out your invoices, the greater the chance
you won’t get paid.
n Watch your inventory. If you produce goods, you’ll always be tempted to produce more
because you get savings based on volume. But inventory can go “bad”—become outdated,
unsaleable, or time- or weather-worn. Inventory doesn’t just apply to finished goods for resale.
You may have “inventory” in the form of marketing materials. Keep an eye on your actual use
and make your purchases not only on the basis of price but also on whether you can get small
quantities only when you actually need them.
n Manage your growth. You want your business to get bigger, but if you grow too fast you
may not be able to sustain it. Growth costs money—you incur many expenses before you see
additional income. Plan your growth so you have the financial resources to pay for it.
n Save. Every business has income fluctuations. The best way to have cash when you need it is
to put some away when you’ve got it.
218 | SIX-WEEK STARTUP
In the final analysis, the appropriate fee is always the same: whatever the
market will bear. Only time will help you sort that out.
Of course, you have to cover your costs and make a profit. And that’s
typically how manufacturers and others set prices. This is “bottom-up”
planning: Figure your costs for raw materials, labor, overhead, shipping,
returns, and so forth, and then set a reasonable figure for profit.
Location/phone
number
Name of bank
rep. handling
business accounts
Accounts offered
and fees charged
Loan or credit
lines available
Special business
services offered
Your overall
impression of
this bank and its
services
Other notes:
W EE K F I V E | 221
n Setup fees.
n Chargebacks. Thisis the amount the issuer will charge any time a cus-
tomer refuses payment on a charge of yours stating dissatisfaction with
the product.
For instance, if the bank’s discount was 2%, the transaction fee $0.30
and the monthly minimum $20, each $100 transaction would cost you
$2.30. If you conducted ten $100 transactions in a month, the bank
would make $23.00, but if you only made five transactions, the credit
card issuer would only have made $11.50 ($2.30 times five), and you’d
be charged another $8.50 to meet your minimum.
The manner in which you accept credit cards affects your costs. If a cus- Check It Out
tomer presents the card to you in person, and you can physically see and Intuit Merchant Services
swipe the card, you’ll be charged less than if you accept phone, fax, mail, (https://quickbooks.
or online orders. The reasoning behind this is that there is less fraud intuit.com/payments/)
committed when a customer has to physically present the card. offers a few methods of
credit card processing—
Deciding which provider to use depends on how you’ll deal with credit point-of-sale, online, and
cards. If you’ll have few point-of-sale (POS) credit card charges, look for mobile—all of which
a low monthly minimum, even if the discount or transaction fee is some- can integrate with the
accounting program
what higher. If you expect large transactions, shop for a low discount rate.
QuickBooks.
If you’re not ever going to see or “swipe” cards, you theoretically
shouldn’t have to pay for the credit card equipment. However, that’s in
theory. Many companies make you lease the equipment anyway, but
don’t accept that without asking.
Once you decide to accept credit cards, be careful to follow the issuer’s
rules. Credit card companies typically have strict rules prohibiting mer-
chants from applying extra charges for accepting credit cards.
To begin, simply go to the website and sign up. You’ll receive a small
device to swipe cards that plugs into your phone or tablet. Download
the accompanying app, and start swiping cards and processing payments.
These mobile applications also work with a cash drawer and printers,
so you can still provide paper receipts to customers. (You can also email
receipts.) QuickBooks GoPayment and PayPal Here may run a credit
check before approving you.
Of course, costs matter, and the most affordable solution depends on how
many transactions you typically do, and at what dollar amounts. Fees for
these three services can range from 2.4% to 2.75% for swiped transactions
to 2.9% to 3.5% plus transaction fees for “unswiped” charges.
Read the fine print. Some swiped cards incur higher fees, and extra
charges may apply if you go above certain transaction amounts.
W EE K F I V E | 223
Budgeting strategies
Successful financial projections are achieved by budgeting from the “bot-
tom up,” not the “top down.”
“Top down” numbers are enticing to work with because they always
come out looking good, but they’re not realistic. Here’s how they work:
you look at the big picture—the total market size, growth rate, average
sales price, and average profit margins. You make what seem to be rea-
sonable assumptions, something like achieving a 10% market penetra-
tion, or improving margins by 2%. Then you fill in your financial state-
ments to make the totals come out to the big numbers projected.
224 | SIX-WEEK STARTUP
For example, let’s say you’ve invented a new golf club, and you project
achieving 1% market penetration within 3 years. If total annual sales of
golf clubs is $2 billion, then you’ll achieve $20 million in annual sales.
With a profit margin of 15%, your net profit will be $3 million.
Sounds good, doesn’t it? “Top down” projections result in some very
impressive numbers—the kind that make you and perhaps some poten-
tial investors excited. They’re just not very realistic.
Instead, the best financials are developed from the “bottom up.” You do
the real business-building legwork: examine different distribution chan-
nels, source manufacturers and suppliers, develop a staffing chart, outline
your marketing program, and design operations. You plug in numbers
from these realistic projections of how much things will cost, and then
you determine how much income you need to sustain that cost.
So, let’s say you’re that same golf club manufacturer, and you build your
financials from the “bottom up”; here’s how it would work:
You first compare distribution channels, and then choose one. Let’s say
you decide to sell through specialty golf retailers and country clubs. This
channel has associated costs and impact on income. You’ll need to bud-
get for a sales force to sell to those shops, exhibit at the annual sporting
good trade shows, and advertise in Golf Retailer magazine. But you will
only receive 40–45% of the final sales price of the club, since the retailer
takes half and the salesperson receives a commission.
Now you’re starting to get real numbers to plug in to each of the lines of your
financial forms. You’ve got numbers for advertising, staffing, and income.
All this planning takes work, but there’s help. The best place to start is by
speaking with others in your industry, attending trade shows, and con-
tacting your industry association.
Cash flow
If the three most important things in real estate are “location, location,
location,” the first three rules of business are “cash, cash, cash.”
It’s necessary, of course, to be profitable, but “profit” is a number that
shows up on your accounts at the end of the year; cash is money you
have in the bank. In a small company, it’s cash that determines whether
you can pay your bills.
W EE K F I V E | 225
No matter what your business is, you’re going to have a lag between
outgo and income. If you’re a consultant, you have to pay for your
phone, computer, marketing materials, and rent before you get your first
client. Once you’ve got them, you’re not going to see complete payment
for at least 30–60 days after you finish a project.
Things are much worse if you’re a manufacturer. You’ve got to pay for
raw material, equipment, and employees many months before you’ll see
final payment.
The following methods help improve your cash flow:
n Sell sooner. Through pre-sales, early season sales, and gift cards, you
can sell your product or service before you actually fulfill the order.
n Get paid faster. Make it as easy as possible for customers to pay you.
Accept credit cards and mobile payments, and always send out your
invoices out as soon as possible.
n Reduce costs and waste. Reduce costs by forecasting what you need and
purchasing carefully. If you don’t really need it, don’t buy it. Whether it’s
extra inventory, shipping materials, utilities, or trips in your van, if it’s
unnecessary, you’re spending money for something you didn’t use.
n Defer payments. Negotiate payments terms, ask for payment install-
ments, or pay bills with a credit card. If you run an ecommerce site,
arrange for a vendor to directly fulfill your customer orders—you hold
little or no inventory, and receive cash before you make the expenditure.
So draw up a cash flow projection. Even if you don’t write up a budget
or income statement, it’s a good idea to sketch out when you expect
money to come in and when you need money to go out.
Use the financial worksheets “Sales Projections,” “Marketing Budget,” and
“Profit & Loss Projection” to develop the range of financial forecasts for
your business. Be certain to do the “Cash Flow Projection” worksheet to
forecast your cash needs. You can find electronic versions of these work- See pages
sheets at www.PlanningShop.com. 226–231
Check It Out Understanding key tax concerns is critical for most businesses. You will
make some decisions—or alter them—based on tax implications.
PlanningShop offers a
Business Plan Financials Some business expenses are fully deductible, others are only partially
package that will help deductible, others have to be depreciated over a number of years, and
you develop a meaning-
others are not deductible at all. You should have at least a fair under-
ful financial plan for your
standing of those issues as you make choices in your business.
business. Visit www.
PlanningShop.com for If you purchase a very expensive piece of equipment, for instance,
more information and expecting to deduct the total cost of that from your income, you may be
to download.
rudely surprised that the expense has to be spread out over as many as
five to 10, even 20 years.
Tax codes are complicated and always changing. Certain tax laws apply
to incorporated businesses and not unincorporated ones, or vice versa,
and business tax laws differ from regulations for individuals. And of
course, every U.S. state has its own tax laws as well!
So, plan on spending some time with your accountant just talking about
taxes. Ask him or her to help you understand which taxes you’re liable
for, when your taxes are due (e.g., quarterly income taxes), and how
various transactions and expenses are taxed (meals and entertainment
expenses, for instance, cannot typically be fully deducted while other
marketing expenses usually can be). Have your accountant help you plan
how to reduce your tax liability.
Many businesspeople find it helpful to set up separate savings accounts
just for income taxes. With each check they receive, they set aside a cer-
tain percentage in this separate tax account, so when income tax time
arrives they have the money necessary to pay their bill.
As a business, you often have responsibility for collecting and then pay-
ing taxes owed by others. For instance, if you are a retailer, you must
charge and collect the sales tax on items you sell to consumers. Set up
records to keep track of those taxes that you’ve collected—and pay them
by the dates due.
You may want to—or sometimes be required to—set up separate accounts
to keep the taxes you collect distinct from your other funds. Governments,
whether federal, state, or city, really frown on your keeping their money.
You may be surprised by the variety of taxes you face. There are income
taxes, sales taxes, payroll taxes, property taxes, personal property taxes,
WORKSHEET my tax deadlines
Sales tax
Property tax
Import/export, custom
taxes and duties
Transfer taxes
Inventory taxes
Other:
234 | SIX-WEEK STARTUP
MANaGING PAYROLL
WHAT
WOULD Soon after I hired my first full-time employee, I started using a payroll service.
RHONDA Determining payroll deductions and depositing payroll taxes with the proper
DO? authorities can be time-consuming and exacting. Moreover, the penalties for
being late or getting things wrong can be substantial. It’s much easier—and
safer—to hire a professional service to take care of the administrative details of payroll for you.
A payroll service charges a modest amount, based on the number of your employees, and how
many states they are located in, but you’re likely to easily save at least this amount in terms of
your own administrative staff time, bookkeeper’s or accountant’s help, and any penalties you
may incur for late or inaccurate payments.
inventory taxes, special use taxes, general business taxes, and others.
Some taxes incur substantial penalties for late or under payments, so
be certain to keep track of when taxes are due and give yourself enough
time to prepare them.
Sales tax
Sales taxes were discussed in Week Three—see page 96 to review what
sales taxes you’ll need to collect. Then talk to your accountant this week
about any questions you have about sales taxes.
The worksheet “My Tax Deadlines” can help you keep track of your tax
See page 233 obligations and due dates.
Accomplishment # 2:
Consider financing
My Checklist:
Determine whose money you want
Consider crowdfunding
Develop a business plan
W EE K F I V E | 235
QUESTIONS TO ASK
POTENTIAL investors
Why are you investing in this business?
What aspect of this business is most appealing to you?
What other businesses have you invested in before?
May I call some entrepreneurs you’ve invested with before?
How soon do you expect to see a return on this investment?
How would it affect you if you were to lose the money you’re investing?
If you felt I was not capable of building this company to the stage you’d like,
what would you do?
How do you see decisions being made? By whom?
What role do you want, if any, in the company (e.g., board membership, etc.)?
Do you understand all the risks in making this investment?
Your own assets. Forget the old saying about using “other people’s
money.” It’s better to start or grow a business with your own money. If
you have sufficient assets, particularly savings or other income that doesn’t
require you to take on additional debt, you’re in the best financial position.
You don’t go into debt, and you don’t give up equity. If your savings are
owned jointly with a spouse or partner, be certain to get their acceptance
and understanding of your plans.
Sales/Income. The very best way to fund a business is from sales revenues. If
you can grow your company based on money received from customers, then
you don’t take on debt and you don’t give up equity. This is not as impossible
as it sounds, especially if you are starting a low-cost business. The key is to
try to line up clients before you actually set up shop, and to grow only as big
as your revenues permit. Your growth may be slower, and it doesn’t seem as
sexy as getting a huge investment, but you’ll sleep better at night.
Credit cards. Experts will tell you credit cards are a terrible way to
finance a business—they cost a lot (high interest rates) and put your
W EE K F I V E | 237
personal credit at risk. The experts are right—if you have other alterna-
tives. The truth is most people use credit cards at one time or another to
pay business expenses, particularly in the startup phase. And credit cards
can be a useful way to handle short-term cash flow problems; if you
realistically expect income soon, credit cards may be an easier or better
alternative than other loans or taking on an investor.
If you haven’t already, fill out the worksheet “My Credit Cards” to keep
track of the credit cards you have. See page 213
Friends and family. Want to lose a friend? Borrow money from them or
have them invest in your business. Getting family or friends involved in
your business is dangerous, but there are exceptions. If the person under-
stands your business, truly comprehends the risks, and is someone with
whom you can communicate well, the situation may work. Always have
loan or investment papers drawn up with the terms of the repayment or
investment absolutely clear.
A no-interest loan from a friend or family member may face what’s called
“imputed interest” by the IRS. The lender may not be receiving any interest
RED TAPE from you, but the IRS will tax them as if they were. If the IRS views the loan as
ALERT! a gift, the lender is subject to federal gift tax rules and will have to pay taxes
on the money if it is more than the maximum allowed by law. The lender
must charge an interest rate that reflects a fair market value. Talk to your accountant if you’re
getting money from friends or family members.
Banks. Realistically, banks loan money only to companies that have been
in business for at least one or two years and have been successful. As your
Check It Out company grows, you’ll likely want a line of credit from a bank to help you
To find out more about manage your cash flow. If you do get a bank loan for a new business, you’ll
loans through the SBA, almost certainly have to give a personal guarantee and have to put up
go to www.sba.gov. For personal assets as collateral. The Small Business Administration provides
information about the loan guarantees to banks to encourage them to make small business loans.
Canadian government’s
In Canada, the Canada Small Business Financing Program (CSBFP) pro-
loan program, go to
vides guarantees to lenders who make loans to qualified small businesses.
www.ic.gc.ca/eic/site/
But keep in mind, the government doesn’t give out business loans—it just
csbfp-pfpec.nsf/eng/
Home.
assumes a percentage of the risk on behalf of the lender.
Strategic partners. There may be other businesses that want you to suc-
ceed, and they may be willing to help you get under way. Perhaps they
are a supplier, customer, or business serving the same market. In some
cases, they may directly invest in your business or give you loans. Perhaps
they would let you use their offices or equipment or otherwise help off-
set some of your expenses in return for the benefits you bring them.
QUESTIONS TO ASK
before you seek financing
Are you willing to give up some amount of ownership of your company?
Are you willing to incur debt that you must repay?
Are you willing to risk property or other assets?
How much control of the oversight of your company are you willing to relinquish?
What other help do you want from a funder besides money?
How fast do you want to grow?
How big do you want your company to be?
What do you see as the long-term relationship between you and your funding source?
Venture capitalists. Venture capitalists are professional investors using Check It Out
institutional money. They generally only invest in companies needing Looking for an angel?
substantial sums of money to grow very large very quickly, and will serve First look for Finding an
very large markets. They do provide early–stage investments as well as Angel Investor In A Day at
financing for companies that are growing. They are particularly active your bookstore.
in technology-related businesses. VCs have high expectations of return
on their investment but are willing to take substantial risks. VCs take an
active role in managing the companies they invest in, often even replac-
ing or removing the founders from management.
“Angels.” Angel is the term applied to private individuals who invest
their own money in new companies. Because it is their own money,
they often invest in a wider range of kinds of companies, and seek
more-diverse types of returns on their investment, than professional
investors such as venture capitalists. They usually invest a smaller
amount of money than professional sources. Angels are generally much
more accessible and more appropriate for small companies. A number of
“angel networks” or organizations have sprung up in large cities.
Consider Crowdfunding
When people refer to crowdfunding, they generally mean raising money
in return for a small amount of stock or ownership in the new company.
However, there are actually two types of crowdfunding:
n Equity Crowdfunding: soliciting funds from a large number of indi-
viduals in return for small amounts of stock or equity in the new com-
pany. The rules and regulations for this type of crowdfunding continue
to evolve. In the United States, there are both federal and state laws
covering this type of fund-raising.
n Nonequity or “Rewards-Based” Crowdfunding: soliciting funds in
return for a benefit that does not include receiving stock or equity.
Rewards might include prerelease products, invitations to special
events, recognition, or T-shirts. Nonequity crowdfunding has fewer
legal restrictions than equity-related crowdfunding.
Equity crowdfunding
Equity crowdfunding enables large numbers of people to invest small
amounts of money in new ventures in return for a small piece of owner-
ship, or shares, or equity.
This policy worked well to protect the general public until the dot-com
era in the late 1990s, when suddenly, many startups quickly grew into
powerhouse corporations, making early investors rich. But, due to the
accredited investor rule (and other Securities regulations), average small
investors were kept from getting in on the ground floor of these block-
buster investments.
Of course, they were also protected from losing money from the many
flops. Yet, there seemed to be a basic unfairness.
W EE K F I V E | 243
These rules are subject to revision by Congress and the SEC over time.
To view these rules, go to the SEC information site (www.sec.gov/info/
smallbus/secg/rccomplianceguide-051316.htm). Other countries may
have different crowdfunding rules.
n Have the right type of business or product. For crowdfunding suc- Check It Out
cess, your idea must be easily understandable by a large number of Some crowdfunding
people (on that platform). Consumer, food, consumer electronics, and sites to check out:
fashion products are particularly well suited to this. Complex concepts n Crowdfunder
and many business-to-business ventures are likely to have a harder time (crowdfunder.com)
n Flashfunders
gathering widespread support. (flashfunders.com)
n IndieGoGo
n Create a compelling video. A great video helps engage potential
(indiegogo.com)
funders, as most funders will want to hear your story, see you, and n Kickstarter
view prototypes of your product (if any). (kickstarter.com)
n Republic
n Raise sufficient funds.On some crowdfunding platforms, you don’t (republic.co)
receive any money until your goal amount is raised in total. This n SeedInvest
(seedinvest.com)
means you want to set an achievable fund-raising target. However, on
n StartEngine
some platforms, you can raise no more than the financial target you (startengine.com)
originally set. So you want to make sure you are raising enough to n Wefunder
execute on your vision. This can be very hard to get right—even for (wefunder.com)
seasoned entrepreneurs.
n Choose the right crowdfunding platform. Make sure the platform you
choose meets your particular needs—type of product or service, type
of rewards or equity you can give, amount of money you can raise and
whether you need to raise the full amount before receiving any of it.
Pros Cons
You get real-time feedback from the people you On a crowdfunding platform, anyone can see what
value most—potential customers and investors. you’re planning, including potential competitors.
You develop highly enthusiastic and committed To raise sufficient funds, you need to generate a
fans before you even launch a product or company. great deal of interest in your idea, requiring signifi-
They become your advocates and evangelists. cant marketing effort.
Many people will pay for new and innovative You may not be able to raise more money when
products well before they’re actually ready for needed to grow; startups often return to professional
market. investors for second or third rounds of funding.
Since equity is spread around so many small inves- Public supporters do not bring the business knowl-
tors, you don’t have to answer to one or two major edge, contacts, and financial acumen of profes-
financial backers. sional investors.
You may be able to raise money for projects that You will only succeed if you make the crowdfund-
professional investors are not interested in. ing aspect of your company a real priority.
You don’t need to know or have access to VCs Although with equity crowdfunding you’ll be selling
or private investors. stock in your company, there really isn’t a secondary
market to sell those shares to others.
A very successful campaign can drive traffic to You’ll need to navigate a still-evolving sea of laws at
your website and social media outlets, and create both the federal and state level.
awareness about your company.
WORKSHEET MY CROWDFUNDING PLAN
The goal $
Marketing
Contact lists you’ll share your campaign with (e.g., friends, family, influencers, bloggers, media, followers)
Press release
Email newsletter
Launch party
Level 2
Level 3
Level 4
Level 5
Expenses
Platform fees
Video production
Marketing expenses
248 | SIX-WEEK STARTUP
Accomplishment #1:
Develop your marketing messages
My Checklist:
Clarify your company’s message
Check It Out Come up with your elevator pitch
Successful Marketing:
Secrets & Strategies is full
of advice and ideas to
You need to have customers to stay in business: It’s the most basic busi-
help enterpreneurs and
small business owners
ness truth. Since reaching customers costs money, and money is always
get the most out of their limited, your marketing strategy must be carefully and thoughtfully
marketing dollars. Find it designed. That’s why you need an overall marketing plan.
at your local bookstore.
First, let’s define the terms “marketing” and “sales” and how they differ.
Sales, on the other hand, is the direct action taken to secure customer
orders. The term “sales” encompasses telemarketing, sales calls, special
promotions, and direct-mail solicitations.
5. Future. How will customers deal with the product or service and
company over time? Will support and service be available? How will
the product or service affect their lives in the coming years, and will
they have an increased sense of security about the future?
Customers, of course, would like to receive benefits in all these areas,
and you should be aware of how your product or service fulfills the
entire range of their needs. But your primary message must concentrate
on one or two of these benefits that can effectively motivate your cus-
tomers.
When you don’t understand what customers want, it’s tough to effec-
tively sell your product or service.
Use this worksheet to develop your elevator pitch. Remember to keep it short; focus on
what customers get, not what you do; and make it easy to remember.
My Company…
Is named:
Does:
Aims to achieve:
256 | SIX-WEEK STARTUP
When you can cut straight to the heart of the matter with your eleva-
tor pitch, customers immediately understand your benefits. It’s like the
Vietnamese restaurant I used to go to; I never knew the real name, but
always referred to it by the big sign out front: “Fresh, Cheap, Good.”
Fill out the worksheet “My Elevator Pitch.” After you’ve written a draft
or two, time yourself saying it out loud. Can you deliver it in three floors
See page 255 or fewer? If not, you’ve said too much.
Accomplishment #2:
Set up a simple website
Your website is a key part of your marketing program. Your customers
and potential customers will turn to it to get information about you
and your company. The first step in building a successful website is to
be clear on what you want it to achieve—and make sure those goals are
realistic. Many entrepreneurs suffer from the “if you build it, they will
come” syndrome, imagining that if they put up a website, they’ll get a
flood of new customers. That’s not a realistic goal.
Websites can take many forms and serve a multitude of purposes. In fact,
most sites combine a number of functions, such as informing the public
Check It Out about the company and selling products or providing customer service.
You can set up an online From a marketing point of view, however, you’ll want to concentrate on
store through a market- how your website attracts, retains, and motivates customers to do busi-
place such as Etsy (www. ness with you.
etsy.com) or ArtFire
(www.artfire.com) for Websites can be categorized generally along the following lines:
handmade crafts. With
n Brochure sites. Like a print brochure, a good brochure website
the ecommerce site
Shopify (www.shopify. includes an overview of a company’s products or services, basic infor-
com), you can set up an mation about the company (such as location and hours of operation),
online shop within min- and background on the company’s history and the people who run it.
utes and start selling just Brochure sites serve as the face of a company for anyone interested in
about anything. learning more. Brochure sites are not generally used for ecommerce,
though some such sites provide links to purchase products or services.
n Ecommerce sites. The primary purpose of ecommerce sites is to sell
products and services directly to customers. Although this type of site
may well include information about a company and its products or
services, its primary function is to promote and process sales.
WORKSHEET my website checklist
Check off the elements you plan to include on your website, noting what each section will say:
Home page
Overview of products/services
Contact info
Relevant content/info/advice
Pictures/videos
Client list
Testimonials/awards
Samples/demos
Catalog
Newsletter signup
User-generated content
Media/press coverage
Job opportunities
Investor information:
Other:
258 | SIX-WEEK STARTUP
n Content sites. These are websites with the primary function to provide
information, advice, or entertainment to users. The content of such sites
may be created especially for the sites, adapted from other media (such
as magazines), or brought together (aggregated) from other sources
(such as websites, blogs, and videos). In most cases, these sites are sup-
ported by advertising and are free to users. In other cases, companies
offer content related to their products or services as a way to draw in
and retain visitors.
n Lead generation sites. One of the primary purposes of such sites is
collecting leads for salespeople to call upon. Such sites often require
Check It Out that visitors provide contact info if they’re to access the site’s content,
A number of companies videos, and/or downloads. The company then uses this contact info to
offer a range of website
follow up with users.
hosting services and
do-it-yourself website n Portal sites. Thebasic function of these sites is to attract users who share
design templates. Three a common interest, then send them to related sites and show them rel-
of these companies are evant advertisements. For example, a portal site for a vacation spot such
Wix (www.wix.com), as Hawaii might have nothing more than ads from people who own
Duda (www.duda.com), condos and beach homes in Hawaii that they want to rent out.
and Squarespace (www.
n Social networking sites. These sites are designed to let users develop
squarespace.com).
communities, interact with one another, create connections, make
referrals, and have fun. Some of the best known are Twitter, Facebook,
Pinterest, Instagram, and LinkedIn. Remember to add icons on your
website that link out to your company’s social media pages.
n Customer service sites. Customers often need support for the prod-
ucts and services they purchase. These sites provide it. Offering
everything from technical advice to shipping information, such sites—
whether they’re devoted exclusively to customer service or represent a
portion of an existing site devoted to the topic—enable companies to
reduce costs and increase customer satisfaction.
When deciding what you’re going to use your website for, keep in mind
not only the initial cost of the site’s design and development, but the
ongoing maintenance. If your site will require frequent updates and
changes, you’ll want to make sure the site is designed in such a way that
you can easily make those changes yourself.
Remember, most companies can succeed very well with a simple website
that describes the company’s services and products, basic details, and
answers to most-asked questions.
W EE K SI X | 259
Use the worksheet “My Website Checklist” to plan the functions and
information you want on your website.
Accomplishment #3:
Begin offline marketing
Once you’ve clarified what you want to tell customers, you have to get
that message out there. How will you reach your customers? And how
much will it cost?
The methods you choose are called your “marketing vehicles.” You have
a variety of marketing vehicles to choose from. The best methods for you
Check It Out depend on your marketing budget, target market, product or service,
One of the first things and marketing message.
you’ll need when you
go into business is a Create a marketing budget
business card. Both Vista
Print (www.vistaprint. The most important part of your marketing program is that you can
com) and DCP Print afford it. Every marketing vehicle costs money, so carefully plan how
(www.dcp-print.com) you intend to spend your marketing dollars. Often the best marketing
offer reasonably priced vehicles are not the most obvious or the most expensive. A large ad in
business cards. DCP Print
a specialty publication may prove far more effective and less expensive
also offers free business
cards—you pay only for
than a small one in a general newspaper.
shipping. However, the
If you spend a ton of money on a huge advertising campaign but it
company prints its small
promotional message on
leaves you without the money to pay the rent or make payroll, you’re
the back of the cards. So going to be in hot water. So, make sure you can afford the choices you
you may want to spend make. In devising your overall marketing program, be sure you look for:
the extra money and
splurge on cards with a Your marketing vehicles must reach your actual target customer
n Fit.
The worksheets in this section help you choose between a variety of mar-
keting vehicles. Several worksheets focus on specific marketing vehicles,
such as printed materials, trade shows, and public relations. Use the
W EE K SI X | 261
techniques that follow to get your message to the right people offline.
The next accomplishment (#4) will cover online marketing.
Customer-based marketing
The best business is repeat business. So remind past customers you exist.
Keep a mailing list, send postcards or email newletters when you have spe-
cial offers, or send a note or holiday greeting. In general, contact past cus-
tomers no less than twice a year and no more than every month. Specialty
items, such as pens, mugs, or calendars, are another good way to remind
customers you exist. And most importantly, ask customers for referrals!
Public relations/publicity
The best publicity is often “free” publicity. Getting a story about your
business in the local newspaper or on TV can be more powerful than a
262 | SIX-WEEK STARTUP
paid advertisement. But that’s not to say that such coverage won’t cost
you: While you don’t pay for the stories directly, it will take time and
effort to get the media’s attention and, in the end, you may have to hire a
public relations specialist.
When designing your press release, remember that most people in the
media are overworked. The more you’re able to make your story “easy”
for them—in the sense that the details are all there—the better your
chances of getting publicity.
Most important, of course, you’ve got to have something the readers, lis-
teners, or viewers of a media outlet will find interesting. Sure, you think
it’s important you’re opening a dry cleaning business, but why should the
newspaper care? Is yours the first dry cleaning business in the city? Do
you provide a genuinely unique process for cleaning clothes?
Instead, we must find an angle for reporters, showing our story is timely,
amusing, or informative. One way is to tie your story to outside events
that generate their own publicity, such as holidays, local celebrations,
sporting events, or new legislation. Reporters always need timely tie-ins.
Use this worksheet to project how many professionally printed materials you will need.
Color or Cost
B&W Quantity Printer per Unit Total Cost
Business cards
Brochures
Pamphlets
Fliers
Publicity photo
Advertising specialties
(mugs, pens, etc.)
Signage
Vehicle signs
Other:
WORKSHEET trade shows and industry events
Use this worksheet to track trade shows or events that you are considering. List the costs to
attend and to exhibit, and note specific details about the type of people who attend.
Name of show/event:
Sponsor: Date:
Location: Costs:
Attendees:
Deadlines:
Notes:
Name of show/event:
Sponsor: Date:
Location: Costs:
Attendees:
Deadlines:
Notes:
Name of show/event:
Sponsor: Date:
Location: Costs:
Attendees:
Deadlines:
Notes:
Name of show/event:
Sponsor: Date:
Location: Costs:
Attendees:
Deadlines:
Notes:
W EE K SI X | 265
n Come up with statistics. Media outlets love numbers. If you can pro-
vide objective, trustworthy information related to your industry or
market, you’ve got a better chance of having the story covered. Include
colorful graphic representations of the statistics if possible.
n Be available. No one can cover or quote you if they can’t reach you.
Include all your phone numbers and contact information in your press
release. And don’t send out a press release and then leave on vacation.
Finally, keep trying—over and over! The companies that often get the
most coverage are those that regularly and repeatedly send press releases.
A one-time press release is far less likely to get you coverage than an
ongoing public relations campaign.
Use the worksheets “Getting Publicity” and “Media Contacts” to keep a See pages
list of publicity opportunities and contacts. 266 and 267
WORKSHEET Getting publicity
Use this worksheet to list newsworthy ideas related to you and your
business that can generate free publicity for your company.
Timely stories: Tie your activities to events such as holidays, local celebrations, or new legislation.
Creative angles: The unusual, amusing, or extraordinary always gets attention. If you can, involve celebrities.
Joint publicity opportunities: Consider unlikely coalitions, not just similar interest groups.
Issues on which you’re the “expert”: Provide trustworthy, objective information, preferably with statistics.
WORKSHEET media contacts
Name: Name:
Title: Title:
Name: Name:
Title: Title:
Name: Name:
Title: Title:
Name: Name:
Title: Title:
Advertising
Advertising works. It gets your company’s name and message to a large
number of people with relatively little effort on your part. But it costs
money. Don’t buy ads based merely on the number of people they’ll
reach; make sure the ad reaches the right people: the customers you want.
A badly designed and poorly written ad may be worse than no ad at all,
so spend the time and money to develop a good one.
One of the most frequent mistakes people make when designing ads is
to omit necessary details, such as the company’s location, hours of opera-
tion, phone number, website, or social media profiles and pages. Usually
the reason is that the person writing the ad takes basic information for
granted. After all, you already know what city you’re in or what your area
code is, so you forget that it’s not obvious to the reader.
Essential details:
1. The name of your company!
5. Website address.
Beware! Not all marketing expenses are treated the same by the IRS. While
taking an ad out in a newspaper is 100% deductible, taking a client out to
RED TAPE lunch is not. Although business entertainment is often the major marketing
ALERT! expense for smaller companies, most meal and entertainment expenses are
only 50% deductible.
For example, if you spend $60 on lunch for you and your customer, you can claim only $30 as a
deductible expense. Meals are also only 50% deductible when you’re traveling, even on a totally
business-related trip. There are a very few exceptions to the 50% rule, such as when you’re pro-
viding food for a company employee retreat or picnic. But far more often, the IRS takes a careful
and dim view of entertainment expenses. Be able to verify that business was actually discussed
and you had a legitimate business purpose.
270 | SIX-WEEK STARTUP
Finally—before you go to print, have two other people read your ad.
Also keep in mind that professionals estimate it takes an average of nine
exposures to an ad before it registers in a viewer’s mind. So be prepared
to run your ad repeatedly!
Promotional products
Look around your desk. How many advertisements do you have sitting
at your fingertips? None? Maybe one—a clipping from the newspaper
about something you’re thinking of buying this week? Otherwise, most
of us don’t keep ads framed above our desks.
Look again. You probably have quite a few ads, yet you just don’t think
of them that way. Many of the ads you’re likely to have are in the form of
Check It Out calendars, pens, pencils, magnets, mugs, notepads, mouse pads, and vari-
From pens, to clothing, ous gadgets—all imprinted with a company name.
to water bottles, and
more, you can have your These represent some of the most powerful, affordable, and overlooked
company name and logo
forms of marketing: “specialty advertising” or “promotional products.”
imprinted on just about
anything at Concepts One of the great advantages of this kind of marketing is that your cus-
in Advertising (www.
tomers see your name repeatedly. Studies show it takes multiple expo-
imprintedeverythings.
com). sures to an ad before a person notices it. How many radio advertisements
can you afford? Compare that to the cost of calendars or pens. If some-
one wants a pizza, and they have a magnet with the name and phone
number of your pizza restaurant on their refrigerator, your chances of
their calling you—rather than your competition—increase greatly.
5. Don’t just look for price. Customers often will keep higher quality,
more thoughtful items longer, increasing the effectiveness of your
promotional product.
Networking
Networking is a vital part of a company’s marketing program, especially
smaller companies. Join professional or industry associations and become
active. Participate in community groups. Bring business cards with you
when you attend events, whether they’re Chamber of Commerce meet-
ings or assemblies at your child’s school.
“Guerrilla marketing”
Finding inexpensive and unique ways to reach potential customers has
become commonly referred to as “guerrilla marketing” since the term
was popularized in the 1980s.
The term reflects the concept of guerrilla warfare—using methods that
are surprising, indirect, and cheap. Guerrilla marketing, however, doesn’t
need to be clever or outrageous to do the job. As long as the campaign
carefully targets the right people and has some flair, it’s likely to be suc-
cessful. Here are some real-life examples:
n When my first book, Successful Business Plan, debuted, I had thousands
of paper napkins printed with a humorous description of a “Business
Plan on a Napkin.” I attended the huge American booksellers’ trade
show and put stacks of these napkins on the coffee carts around the
convention center hall and convention hotel bars.
272 | SIX-WEEK STARTUP
n A bank near my office gives free Vidalia onions away once a year to
anyone who comes in. It’s such a fond, and odd, local tradition that
the bank gets lots of local press coverage each year.
Accomplishment #4:
Begin online marketing
SEO and SEM
“Build your website, and they will come,” right? Not necessarily. For
starters, how will people know you even have a website and that it con-
tains something they’re interested in? Sure, you’ll do everything possible
offline to direct people to your website—put its address on your business
cards, brochures, ads, and so on—but the people in the best position
to visit your website immediately are already online. So how do you get
them to notice you? One of the best ways is by making sure your site is
easy to find via search engines—Google, Yahoo!, and Bing, for example.
For the vast majority of online users, search engines serve as the main
gateway to information on the Web. This means that if your website is
highly visible in the results that appear when someone types in a key-
Check It Out
word or phrase associated with your type of business, there’s a decent Do a search for “Google
SEO Starter Guide” to
chance that person will click on over to your website. There are two pri-
find a link to a helpful
mary ways to ensure that your website is highly visible on search engines.
PDF file full of basic
Search engine optimization (SEO) is the process of trying to design information on SEO.
your website and the words on it so that it appears naturally in the top
results when someone types a keyword into a search engine. With SEO,
you don’t pay search engines to have your site appear high on results
pages. SEO is often referred to as organic search.
SEO is an art and a science, based on secret algorithms from the search
engines. It’s unlikely that you will master it on your own to make your
site consistently appear at the top of unpaid search results. Nevertheless,
you should understand at least the basics of SEO to ensure that your site
shows up, over time.
The first thing you need to do is figure out which words your target
customers will most likely use when searching for the types of products
or services (or content) you offer. Once you’ve determined that, repeat
those keywords throughout your site—in your content, headlines, page
names, and more.
Imagine, for instance, that you own a company that creates and sells
educational software parents use to help teach their kids math. There are
lots of terms you’d expect searchers to use when looking for products like
276 | SIX-WEEK STARTUP
yours—and these are the terms you’d use when developing your site’s con-
tent, regardless of whether you were considering SEO: terms such as “soft-
ware,” “educational software,” “math software,” and even “kids software.”
These, though, are all rather broad terms—that is, lots of companies sell
math software or educational software. This means your site is unlikely to
show up high in natural search results based on those keywords because
millions (yes, millions) of other sites are also using them. Instead, you’d be
better off focusing on keywords that are more specific to your products—
so in the case of that educational software company, something like “kids
math software” used over and over would yield better results.
Blogs
Blogs, short for “Web logs,” are frequently updated online journals that
can contain text, audio, video, graphics, and photos. From a marketing
perspective, blogs work well for businesses in which expertise is valued— Start It Free
for consultants, technology service providers, professional service busi- You can set up a blog
nesses, and so on. quicky, easily and for
$0 on Blogger (www.
Whether you create your own blog or regularly contribute to a popular
blogger.com) or Word-
blog in your field, your blogging efforts can greatly enhance your visibility
press (www.wordpress.
and credibility. If you offer readers something of value (beyond a sales mes- com). Wordpress has the
sage), it’s likely you’ll attract people looking for your services or products. added benefit of poten-
tially sending traffic your
Effective use of blogs can:
way. After you post a
n Build name and brand recognition blog, it will appear in the
Discover section of the
n Establish you as an expert
site. There, if it catches
n Attract customers and clients the eye of interested
n Create links to your website readers, you’ll get some
clicks on your post.
n Generate buzz around a new product
n Tap into a committed market
Daily Deals
The prospect of getting a bargain has driven the phenomenal success of
daily deal sites such as Groupon, Living Social, and hundreds of others.
For some companies, these offers are invaluable business builders. Other
companies, which have lost money and attracted only bargain-hunting
customers, have rued the day they ever signed up.
A deal site sends an email daily to those who’ve registered. People interest-
ed in your discounted product or service purchase your deal. You typically
pay nothing to be included, but the deal site gets a hefty piece of the sale:
30% to 50%. And typically, you must offer at least a 50% discount. So if
your business creates custom photo books using images your customers
upload to your site, here’s what a money breakdown might look like: You
offer your $40 leather-bound photo book for $20. With each sale, you get
$10; the site gets $10. Those who never redeem the coupon add to your
profit margin: Businesses report 5% to 40% nonredemption rates.
W EE K SI X | 281
Deals are best offered to launch a new business or get your name out
there, for slow or off-season periods to drive new traffic, and to move
excess or last season’s inventory.
If you’re considering offering a daily deal, keep these 10 strategies in mind:
1. Offer services, rather than products. It’s generally far less costly since
you won’t have the cost of goods.
2. To help build a committed customer base, create offers for which
customers must come back repeatedly (“your third visit free”; “four
manicures for $99”; and the like).
3. Try not to cannibalize existing customers. Craft deals that are more
likely to appeal to new customers.
4. Experiment with different offers and several sites to determine what
works for you. A more-targeted site may be a better fit and less costly
than a general, national one.
5. Include your own fine print. Limit redemption to “only one per
customer,” “not to be combined with other discounts,” and other
restrictions that make sense, to protect you.
6. Avoid sites that require you to deal with them exclusively. Some sites
affect your ability to offer deals on other sites; limit your involve-
ment with those.
7. Understand the fees and terms. Make sure you know about all other
fees. Some sites charge credit-card processing fees; others may pay
you slowly or in long-drawn-out installments.
8. Build your marketing list. Look for sites that give you a list of those
who’ve bought the deal. Some sites give you only an identification
number. Others will give you names and email addresses—enabling
you to keep marketing to those prospects.
9. Do everything you can to ask for and capture contact information
from new customers so you can continue to market beyond the deal
or coupon.
10. Negotiate with deal sites. And negotiate hard. There are lots of daily
deal sites. Most important, know what works best for you and for
your business. Don’t let salespeople pressure you.
WORKSHEET my social media strategy
Use this worksheet to plan your social media marketing strategy. Remember that social
media can take up an inordinate amount of your time. Budget your hours wisely.
YouTube
Google+
Other social
media site
Other social
media site
Blogs to
follow
Blogs to write
Podcasts
Other:
Who Will Maintain Resoures Required
Will I Use
My Goals for This Site the Site, Number of (for writing, posting,
Paid Advertising?
Hours Weekly pictures, etc.)
284 | SIX-WEEK STARTUP
Keep your expectations realistic. And remember, these sites are more a
marketing tactic than a way to make quick sales. They are a good exam-
ple of loss leaders—offering a product or service at or below cost so as to
bring people through your doors.
Mobile marketing
Mobile devices have transformed the way customers deal with local busi-
nesses. How long has it been since you used your smartphone to find a
business? To reserve a table at a restaurant? To get directions? Likely, not
long. Most of us use mobile devices to shop. That’s a lot of people look-
ing for businesses on their mobile devices. Depending on the type of
startup you launch—mobile marketing is especially well-suited to local
businesses that deal with consumers—you’ll want to take advantage of
mobile marketing.
You don’t have to develop a gee-whiz app or use every mobile method
available in order to reach the increasing number of people searching for
businesses like yours on their mobile devices. You do, however, need a
mobile version of your website.
Most of the following mobile marketing techniques are easy, and often free:
n Get found. “Claim” your business for free on sites such as Google My
Business, Bing Places, and Yelp. When someone in your area looks for
a business like yours, you’ll show up in the search results.
n Offer coupons and deals. Like adding your listing, this is also free and
easy to do. You simply add a coupon to the sites listed above.
n Build relationships with customers. Do this through social media
sites such as Facebook, Instagram, or Twitter.
n Advertise on Facebook. Although the ads will cost you some money,
consider this: In the U.S., over 80 percent of smartphone users spend
their time using just five apps. Facebook is number one. With Facebook
ads, you can target a very specific audience, control your budget, track
your results in real-time, and change your ads quickly if necessary.
n Display your location, hours, and main products or services. Make
sure your home page has the most critical information in highly readable
type—large fonts and dark print on a light or white background—that
doesn’t require typing or moving away from the home page.
W EE K SI X | 285
Review Sites
Positive reviews on sites such as Yelp, Angie’s List, TripAdvisor, Zagat,
Google My Business, and the like, can be powerful marketing tools for
your business. Customers often use—and rely on—sites like these before
making reservations, booking appointments, or purchasing products.
Although you have no control over what reviewers post about you, you
can claim your business page on these sites and add information about
your company.
Use the following tips to manage your online reviews:
n Encourage satisfied customers to post reviews.
In an email newsletter, you can include information and tips your cus-
tomers can use, short articles, business updates, special announcements,
or coupons and special offers. For most businesses, avoid filling your
newsletter solely with sales information about your products and ser-
vices—instead, provide recipients with some benefit for opening your
email. That way, they’re more likely to read the next one you send. If,
however, your business strictly sells products, then “news” of discounts,
sales, and new products may be all the benefit your customers look for.
Of course, people are deluged with email, and as with any kind of mar-
Start It Free keting piece, there’s the possibility that your communication may well
just get tossed—after all, it’s easy to hit that Delete button. But if an
At this point in your
email communication comes from a recognized and trusted source and
business, your con-
tact list of customers offers something of interest to the recipient, there’s a good chance it will
and prospects may be be opened—and perhaps even viewed as something valuable.
short. Email newslet-
ter service MailChimp
Email marketing is:
(www.mailchimp.com) n Effective. Customers and prospects look at their email continually.
offers a “forever free”
account that allows n Affordable. Email is significantly less expensive than print communi-
users with smaller lists cation.
to create and send out
n Quick. Messages can be prepared and sent virtually immediately.
email newsletters at no
cost. As your business n Easy. A variety of email communication services make it a snap to stay
grows, you can upgrade in touch via email.
to a paid subscription
account without any But a word of caution about all email marketing: Be careful not to abuse
disruption to your news- it. Send email only to those who’ve signed up to receive email from you
letter marketing cam- or have had some dealings with you (including giving you their business
paigns. card), or you may be breaking the law. Limit the frequency of your mes-
sages; generally once or twice a month is enough for an email newsletter.
Try to use a compelling “Subject” line to increase the chance that people
will open and read your mail. And make sure your mailings are mean-
ingful, are valuable, and don’t contain offensive content or language. If
not, recipients will soon block your email, and if enough people do that,
email filters will block your messages to many larger servers.
Use the worksheet “My Email Newsletter” to help plan your email news-
See page 287 letter marketing campaign.
WORKSHEET my email newsletter
Use this worksheet to outline specifics of an email newsletter your business could
produce and distribute to current and potential customers.
What kinds of useful information and tips will it contain?
How will you promote your products or services without driving readers away?
Which online email newsletter will you use to send your newsletter and maintain your mailing list?
How will you evaluate whether your email newsletter is serving as an effective marketing piece?
Early/First Contacts
Pre-purchase Inquiry
After Purchase
Birthdays/Anniversaries
Meeting/Appointment Follow-ups
Other
288 | SIX-WEEK STARTUP
Online Advertising
You’ll find them on just about any commercial website you visit. They’re
either lurking at the side of the page or incorporated right into the
design. Some are static; others blink or flash messages at you; and some
float across the page. Then there are those that pop up in front you,
obscuring the website you’re trying to view until you can figure out how
to get rid of them.
Even if you find most online ads bothersome, it’s a good bet that there
are others you’re happy to see. For instance, if you’re looking for envi-
ronmentally sensitive products—solar-powered heating, energy-efficient
lights, recycled building materials, and so on—and you come across a
website listing suppliers of such products, you’ll be thrilled. You won’t
care that these companies paid to be listed; you’re just glad to find all of
these resources in one location.
What’s important is that you design your online ads to attract (not
annoy) your target customers and then place them where potential cus-
tomers are most likely to see them.
Online classifieds. Some of the most effective ads are pure text (or, per-
haps, text augmented with a few pictures). These are the equivalent of
online “classified” ads.
Sure, online auction sites are designed for ecommerce—that is, the direct
selling of products—but that doesn’t mean you can’t also use them as mar-
keting tools. Since you can set up “stores” on these sites or list products as
“Buy It Now” without conducting an auction, you can use auction sites as
an advertising medium—just as you would online classified sites.
All you need to do is register, pay the fees, and upload some descriptions
and photos to get your products—and your business—in front of a mar-
ketplace that consists of millions of eyeballs.
What market do
they reach?
What percent-
age of their market
is my target market?
What frequency
will I need to be
effective?
What is the
reasonable immedi-
ate response I can
expect?
How expensive
is the ad to prepare?
Other:
Marketing Networking, Signage Other
Collateral Trade Shows, Vehicles, buildings, In-store marketing,
Brochures, fliers, Public Relations billboards advertising specialties,
direct mail product placement
292 | SIX-WEEK STARTUP
Accomplishment #5:
Start making sales!
If your marketing plan has been successful, you’ll soon have potential
customers interested. Now you have to make the actual sale!
n Be honest. Lying is not only unethical and possibly illegal; it’s a sure-
fire way to lose customers and potential customers. You may even find
yourself facing a lawsuit.
n Compare, don’t criticize, your competition. Yes, I know, your product
or service is so much better than your competitor’s, and they’re really
not very nice people either. But disparaging your competition makes
you appear malicious. Instead, factually—and positively—compare
your benefits and value to those of your competitor.
n Build relationships. One of Rhonda’s Rules is “people do business
with other people.” We all prefer to do business with people we like
and trust. Consider the “lifetime value” of a customer, not just a one-
time sale. Often, you might want to make a little less profit to begin an
ongoing customer relationship. Get to know your customers; find out
about their businesses or families. One way small businesses can com-
pete with the big guys is by building strong customer relationships.
A sales pitch can come in many forms, but it has three distinct stages:
n Your pitch
n The customer’s concerns and objections
n Your rejoinder, or reply, to those concerns and objections
After you’ve been in business for a while, you’ll know the objections or
concerns that keep most prospects from making the decision to buy.
Work on those, so you sound confident in responding to them should
they arise in the course of a sales call.
Use the worksheet “My Sales Pitch” to outline the points you’ll make
to prospective customers and how you’ll handle their reservations and
objections.
Use this worksheet to develop your sales pitch. Under “My Pitch,” list the key strengths
that distinguish you from your competition. Then, anticipate objections prospective
customers might raise under “Their Objections.” Finally, prepare “My Rejoinder”
that counters the objection and convinces your prospect to buy.
You may never get used to standing up in front of others, but it doesn’t
have to feel as bad as dental surgery. Just organize your thoughts, put on
a nice outfit, smile, and you’ll get rave reviews.
To give you an idea of what a one-page sales sheet looks like, take a look at
one we frequently use (on page 301). Here’s how to make your own:
1. First, write up your text. Keep in mind one of Rhonda’s Rules:
“People don’t read.” So keep your copy short, snappy, and to the
point. Start with a one-paragraph description of your product or
service. Provide the basics: what it is, what it does, and why your
customer should buy it.
Focus on your product’s benefits, not just its features. In other
words, think of your product/service from your readers’ point of
view—you may be thrilled that you just bought a brand-new high-
end photocopier for your print shop, but what does that mean for
me, your customer? Better quality? Cheaper copies? Faster service?
Use bullet points to list key features and benefits. Use powerful,
descriptive—but true—adjectives.
2. Next, you need a photo of your product. Or a graphic. Or anything
visual. In this case, a picture really is worth a thousand words. If
your product or service isn’t particularly photogenic, use a chart or
graph that illustrates benefits or cost savings.
3. If it’s appropriate, include the price of your product. In some cases,
your prices may vary by customer or season, so you’ll want to main-
tain separate price lists.
4. Finally, you’ll want a call to action. Tell people where and how they
can order your product or get further information.
W EE K SI X | 299
AT A business lunch
WHAT
WOULD Many people take prospective customers to lunch (or breakfast or dinner) to try to
make a sale. But how, exactly, can you make the most of that opportunity with a pros-
RHONDA pect? Most inexperienced lunchers believe the main purpose of a business lunch is
DO? either to: (1) conduct business, or (2) eat lunch, and they’re unsure how to mix the two.
Don’t worry! Business lunches aren’t about either business or lunch; they’re about building relationships.
Here are the keys to a successful business lunch:
n Listen. Listen to what the other person cares about, what makes him or her tick. Many of us, when
we’re nervous, tend to talk a lot. Instead, let your guest do the talking. Ask questions. You don’t want
to conduct an interview, but you’d be surprised how smart people think you are if you ask questions
and listen to their replies.
n Go for no reason. Don’t make the business lunch seem like a sales call. Instead, ask for an informal
get-together: “I’m starting a new business, and perhaps I can take you to lunch and pick your brain for
some advice.” Or, “I’m often in your area, how about having lunch some time?” Once you’ve taken the
time to get to know your guest, setting up a sales call in the future will be easier.
n Order slow food. Preferably, have the other person suggest a place to eat. If you have a limited bud-
get, you choose a nice, midpriced restaurant. Forget McDonald’s. Don’t be in a rush. Order “slow food,”
not “fast food.” You want as much time with your guest as possible.
n Don’t order messy food. Pass on the spaghetti, and be careful about piling chili on the burger. Forget
the “three-martini” business lunch. It’s wisest not to drink any alcoholic beverage at lunch, and only do
so if your companion orders one first. No matter what your companion does, stick to an absolute one-
drink limit. This, after all, is still business.
n Turn off your cell phone. Stay focused on your companion—you’ve taken the time to arrange a
lunch meeting, so don’t waste it away on phone calls with others. It sends the message that you aren’t
really interested in them. Your goal is to listen and learn from your guest.
n Bring your credit card or sufficient cash. If you did the inviting, pick up the tab, even if your guest
says, “I can put this on my company’s credit card.” But don’t have a scene arguing over the check. You
can just say, “You can get the next one.” Some companies have policies that don’t permit employees to
be treated; in that case, split the tab.
Now, it’s time to take all this copy and put it on the page. Here are
secrets professional designers use to make print materials look polished:
1. Divide your page into columns. Short spans of text are easier to
read and more visually appealing than long lines. Divide your letter-
sized sheet into columns.
2. Leave “white space.” Text and graphics “pop” when they have
some breathing room. At the very least, make sure you have about
one half-inch margin on all four sides of your sheet and leave one
quarter-inch space between columns and other graphics. It’s better to
eliminate some text than cram in too much.
3. Use a maximum of two typefaces. Your computer is loaded with
wonderful, fun fonts; save most for your kids’ school projects. For text,
use a serif font (with those tiny lines—or feet—at the ends of letters;
the text you are reading now is set in a serif font) and for headlines and
captions, use a sans serif font (without the decorative lines, such as the
font we used for the first sentence in this paragraph). Times Roman is
a good serif choice and Arial is a popular sans serif font. Serif fonts are
easier to read; sans serif fonts look cleaner and more modern.
4. Use color and boldface type sparingly. While you may want to
make a few key words or phrases jump off the page by using colors
or fat type, if you try to make everything pop out, nothing will.
There! You’ll have a sophisticated, effective one-page sales sheet you can
proudly distribute to potential customers.
Successful
Marketing SECRETS &
STRATEGIES
Successful Marketing: This thorough book includes a step-by-step guide to creating a Complete Marketing
Secrets & Strategies Plan. Dozens of worksheets help readers develop their company name, logo, taglines,
print, radio and TV advertisements, PR pitches, websites, brochures, media kits,
By Rhonda Abrams
and Julie Vallone
out-of-the box marketing campaigns, and much more.
enough time to make a sale to a genuine prospect, but you don’t want
to waste too much time on those who won’t ever buy.
6. Don’t count your chickens before they hatch. It’s easy to get excited
about a prospect, especially if it’s a big one. So, keep your sales pipe-
line full, and remember, a deal is not a deal until the check clears.
n List brokers. Private companies sell lists of both businesses and con-
sumers, sorted virtually every conceivable way. You can buy targeted
lists of leads by industry, magazines subscribed to, products purchased,
schools attended, age, hobbies, even lists of new mothers. I’ve never
bought leads from a private broker, but my recommendation would be
to make certain you’ve very clearly targeted your prospects, and that
the list is new and continually updated. Then be sure to track your
results so you know whether the list was effective or not.
Cold calling
A “cold” call is a sales call—either on the phone or in person—when
the person you’re calling hasn’t previously indicated any interest in your
products or services. Obviously it’s tough to make cold calls because
you’re going to get a lot—and I mean a lot—of rejection.
It’s not easy to make (or get) cold calls. Who hasn’t been deluged with
telemarketers for timeshare properties calling during dinner or credit
card companies interrupting the workday repeatedly? But have you ever
stopped and wondered why they keep calling when we all hate them?
Here’s the dirty little secret: Cold calls work.
your first call, but don’t read it during the call! Introduce yourself right
at the beginning of the call. Think about the objections you’re likely to
hear and have responses ready. You’re not going to get it right the first
time—or the second or the third. So constantly practice your pitch
and refine it.
n Mind your manners. If you walk in on someone and they’re on the
phone, wait until they’re free. If you’re phoning, and the person says,
“Now’s not a good time,” ask when a good time would be to call back,
and get off the phone.
n Take people literally. If a prospect says, “I’m not interested right
now,” believe they mean right now. Perhaps they’ll be interested anoth-
er time. My sister called on a company for seven years before they
finally bought from her.
n Don’t be obnoxious. Take no for an answer. If someone’s not inter-
ested, why waste your time or theirs? Be polite.
n Stay in practice. Cold calling is difficult, and it’s easy to forget how
to do it well. So make calls from time to time—it reminds you what
you’re offering your customers.
Finally, don’t take it personally and don’t get discouraged. You’ve got to
kiss a lot of frogs before you find a prince. It took me four years of call-
ing on the business editor at Gannett News Service before I finally got
my nationally syndicated column in USA Today. And I’m still friends
with him!
case. That seemed to be a lot better deal, and by the time I left, I had a
selection of beauty supplies and a $25 charge on my credit card.
When up-selling is done properly, the customer gets a good deal and you
get a bigger sale. How could the retailer afford this kind of offer? Because
their big expense is tied up in their overhead—rent, salaries, advertis-
ing—not in the cost of the eye shadow.
Up-selling doesn’t just occur in retail. If you need to get a will drawn up,
don’t be surprised if your lawyer offers you a complete estate planning
package, which includes a few other documents you should properly pre-
pare at the same time. The one-price package is a good value to you and
a better sale for them.
A slightly different approach is “cross-selling”—selling related products
or services. Examples of cross-selling include a cloth diaper service that
also sells baby care products, or a travel agent who books recreation
activities at your destination as well as airline reservations.
One of the best ways to make more money from each customer is to
look for ways to get continuing income rather than just making a one-
time sale. Are there products or services your customers use up or use
repeatedly—“consumables”—that you can appropriately sell? There’s
often more money in consumables than in the original product or ser-
vice. Decades ago, Kodak figured out there was more profit in the film
than the camera. The same is true today for inkjet printers.
Service businesses, too, can look for ongoing revenue streams. Accountants
frequently offer bookkeeping or bill-paying services—instead of doing cli-
ents’ income tax returns once a year, they work for them all year long. What
could you offer your customers on a continuing or consumable basis?
Of course, there’s a risk that if you’re too aggressive when you up-sell,
cross-sell, or offer consumables that a customer will view you as too
pushy and they’ll leave.
But if you can honestly provide a more complete product or service or a
better value by up-selling or cross-selling, both you and your customer
will benefit.
Twitter is a potential new client. Names, contacts, and followers are prized
company assets and potential leads. The following techniques will help
encourage people to give you their names and contact information:
1. Ask. The simplest way to capture contacts is to ask people who come
to your store or website for their name and email address, and ask
people you meet for their business card. Something as simple as a sign
(“like us on Facebook”) or signup list by the cash register is a start.
3. Tell them why they’re signing up. Let them know they’ll get notices
of sales, discounts, new products, “family and friends” specials.
Everyone likes a deal.
Accomplishment #6:
Hold your grand opening
Now comes the big day. You’re ready to “officially” open your business.
It’s time for a grand opening!
Grand openings aren’t just for retail businesses. You can hold an “Open
House” at your new office space, a “Launch Party” for even a home-based
or virtual business (throw it at a restaurant or other rented or borrowed
space), or a “Product Launch” event for a new product or service.
310 | SIX-WEEK STARTUP
Print up an invitation that not only lists the time, date, and place of the
grand opening but also describes what your business does. Remember,
this is a chance to let the world know about your business.
Follow up with an email. The least intrusive marketing material you can
send someone is an invitation to a party. After all, you’re not trying to
sell them anything—not yet, at least!
To top it off, write up a press release announcing your new business and
send it to the business reporters of your local newspaper and any indus-
try publications. Call them to follow up and ask them to attend. They
probably won’t, but you’ll let them know you exist and that will make it
easier to pitch future stories to them.
Accomplishment #7:
Look toward the future
You’ve come a long way! Think about where you were when you first
purchased this book—and look at where you are now. Wow! What a
transformation!
I wish I could tell you that from here, you’ll cruise along with ease, that
now you can sit back, a tall glass of lemonade in your hand, and watch
the cash roll in. Unfortunately, that’s just not the case…at least not yet.
Certainly, getting a business up and running is one of the most difficult
periods for an entrepreneur. But if you’re like most businesses, the next
year or two will continue to be a significant challenge for you.
You’ll spend a lot of time in the coming months looking for and serving
customers, streamlining operations, figuring out which products or servic-
es are actually profitable and which are underperforming, reworking your
financial projections to better align them with the reality of your business
and market, worrying about cash, and keeping yourself energized, moti-
vated, and confident about the choices you’ve made.
While it’s true that you need to be self-confident about what you’re
doing, you also need to be able to analyze your choices, learn from your
mistakes, and be honest with yourself about how you can change, adapt,
and grow. Don’t let your negative thoughts paralyze you—instead, har-
ness that energy toward a positive purpose. In other words, turn those
self-doubting thoughts into positive actions that will help you move for-
ward. Fear, when used as a catalyst for positive action, is a good thing!
312 | SIX-WEEK STARTUP
For me, it was flowers. My first couple of years in business, I didn’t have
much money and every penny counted. I lived on cheap spaghetti I
bought in bulk. But every week, I bought flowers for my desk. Some-
how, looking at a bouquet made me feel like I’d arrived at a “real” office.
Little things matter. You can’t afford the assistant, you won’t necessarily
have a separate room for your office, and believe me, when you travel,
you’re going to fly economy instead of business class. See what kind of
symbols help you feel good about being in business day-in and day-out.
Here are a few you might try:
n Business cards. Absolutely! You can’t exist without them.
n Get dressed every day. No, of course, I didn’t think you were going to
work nude. But how about getting out of those sweats?
n Set up an “office” and decorate it.
Index
A budgeting for, 109
Accelerators, startup, 151 developing personnel policies, 115–118
Accountant, meeting with health insurance, 122, 124, 140, 198–201
on bookkeeping setup, 215 independent contractors and, 110, 112–114
on financing options, 235, 240 Better Business Bureau, 177
preparing for initial meeting, 206–207 BizSugar, 76
questions to ask, 208 Blogs, 183, 279
on stock issuance, 87 Boards of Directors, 87, 104–105
on tax issues, 98, 145, 211, 232 Bookkeeping
Accounting method, 215 accounting method, 215
Acquisitions, corporate, 24 in-house vs. outsourcing, 197, 207, 234
Address, business, 143–144 regular review of books, 217
Administrative procedures, 192, 194–197 software or apps for, 44, 169, 173, 185, 214–215
ADP Small Business Payroll, 235 tasks involved in, 194
Advertising, 68, 268–270, 276–277, 288–289. See also Box.com, 43, 184, 185
Marketing Brochure websites, 256
Advisory Committee, 90, 104 Budgeting strategies, 109–110, 217, 223–224, 260
Alibaba, 53, 67 Bundling, 68
AllBusiness.com, 76 Burn rate, 208
American FactFinder, 53, 59 Business cards
Americans with Disabilities Act (ADA), 122 company identity and, 30, 36, 39, 40
Angel investors, 22, 240, 241 mailing address and, 144
Apple Computer, 15, 36, 98, 184 marketing and, 260, 261
Apptivo, 43, 188 professionalism and, 313
ArtFire, 256 Business concept, 5–27
Asana, 126, 186 Basic Business Description, 16, 17
Attire, business, 122, 296, 312, 313 exit strategies and, 23–25
Attorney, meeting with family discussion of, 25–26
on contracts and agreements, 20, 22, 99, 140, 190 inspiration sources for, 11–13, 15
on employee issues, 114, 116, 122 investors and, 22–23
on financing options, 235 lean startup approach and, 17–18
hiring a lawyer, tips on, 80, 82 marketplace needs and, 15, 17
on intellectual property issues, 34, 35, 100, 101 partnerships and, 19–22
on licenses and permits, 92, 95, 96 personal goals and, 6, 7–9
on ownership issues, 20, 22, 87 SBDC counselors and, 26–27
preparing for initial meeting, 79 strategic position and, 18–19
on tax issues, 98 values and, 9–10
Auction websites, 289 vision of your business, 5, 7
AWeber, 187, 285 worksheet on, 14
Business name. See Name of business
Business plan, 26, 243, 244, 248
B Business Week, 61
“B” Corporations, 84–85, 86
BusinessUSA, 81
Bait-and-switch tactics, 310
Banks and banking, 218–219, 220, 237, 240
Basic Business Description, 16, 17 C
Benefits “C” Corporations, 84–85, 86
attracting good employees with, 120–122, 124 Calendar programs, 173, 195
316 | SIX-WEEK STARTUP
Logos, 30, 36–37, 270 social media strategy, 186, 278–280, 282–283, 284
Lunches, business, 269, 299 taglines and, 39
at trade shows, 261, 264
M vehicle comparison chart, 290–291
Mail (postal), 143–144, 194, 196 virtual company and, 70
MailChimp, 187, 286 website setup, 256–259
ManageFlitter, 278 McConnell, Patrick, 34
Management style, 124–128 McDonald’s, 36, 60, 99, 299
Manufacturing Media publicity, 261–262, 265–267
cash flow and, 225 Meetup, 74, 305
integration and, 17 Mentors, 102, 104
intermediaries and, 66–67, 189–190 Mergers, corporate, 24
location of facilities, 132, 135, 136–137, 140 Microsoft
prices for goods, 218 Bing, 275, 277, 284
production process, design of, 154–155, 157 company name, 27
reseller’s licenses and, 95 Office suite, 43, 173, 182, 195, 215
staffing needs, 105 Minimal viable product, 18
strategic partnerships and, 68 Mint, 44, 185
suppliers and, 164 Mobile apps, listed by category, 184–188
Market, target. See Target market Mobile marketing, 284–285
Market penetration, 223–224 Mobile office, 132, 149–150
Market research, 54–67 Mobile payment processing, 187–188, 222, 285
on competitors, 60–66 Money issues. See Financial management; Financing
demographic information sources, 49, 59, 136 Monster.com, 120
questions to research, 50–51 MyCorporation, 83
SBDC counselors and, 26–27
on suppliers, 66–67 N
on target market, 54–60 NAICS codes, 49
See also Industry research Name of business
Market size, 58–60 company success and, 27
Marketing, 252–291 comparison chart, 28–29
advertising tips, 268–270 considerations in choosing, 30–32
budget, 227, 260 DBA (Doing Business As), 96
business name and, 30 domain name availability and, 28, 35–36, 100
cooperative advertising, 68 trademarks and, 28, 31, 99, 100
customer loyalty programs, 272–274 National Association for the Self-Employed, 26
customer motivation and, 253–254 National Association of Insurance Commissioners, 197
elevator pitch, 71, 75, 254–256 National Association of Wholesale Distributors, 189
email newsletters, 187, 261, 285–287 National Association of Women Business Owners, 74
grand opening, 309–310 National Retail Federation, 96–97
guerrilla marketing, 271–272 National Venture Capital Association, 22
logos and, 36–37 Net profit/loss, defined, 209
media publicity, 261–262, 265–267 Network Solutions, 35
mobile strategy, 284–285 Networking
online ads, types of, 288–289 benefits of, 3, 71–72
online daily deals, 280–281, 284 evaluating organizations, 74–75
online review sites, 285 marketing as inclusive of, 252, 271
printed materials, 261, 263 online connections, 75–76 (see also Social media)
promotional products, 270–271 organizations to join, 72–74
sales vs., 252 sales leads and, 303–305
SEO and SEM, 275–277 Newsletters, email, 43, 178, 187, 261, 285–287, 309
322 | SIX-WEEK STARTUP
V Z
ZDnet, 168
Vacation leave, 115, 116, 122
Zenfolio, 183
Values, business, 9–10, 294
Zoho, 43, 109, 113, 185, 186, 188
Variable expenses, defined, 208
Vehicles, 30, 132, 149–150, 159
Venture capitalists, 22, 99, 105, 241
VerticalResponse, 285
Video marketing, 279
Videoconferencing, 170
Virtual companies, 70–71
Vision of your business, 5, 7
Vista Print, 260
Vital statistics, 44, 93, 94, 196
Voice over Internet Protocol (VoIP), 170, 172, 173
Volunteer Match, 9
W
Wages and salaries, 109–111, 120, 121
Wall Street Journal, 61
Warehouses, 137
Warranties and service contracts, 160–161
Wave, 185, 214
Websites, company
checklist of features, 257
colors and, 39, 40
company identity and, 30
domain names, 28, 31, 35–36, 100, 182
hosting and design, 183, 187, 258, 259
mobile version of, 284
SEO and SEM, 275–277
types of, 256, 258
Weebly, 187, 259
Wefunder, 245
WeWork, 151
Wix, 187, 258
Women’s groups, 74, 303
WordPress, 186, 279
Work space. See Facilities; Location
Workers’ compensation, 114, 198
Work-for-hire agreements, 98, 101
Wrike, 126, 186