Once upon a time, I was George Clooney in “Up in the Air.” As a management consultant, I lived out of my suitcase and hoarded miles (proud member of the one million miler club on American Airlines) to help businesses come up with strategies to improve their profitability. We rarely stuck around to execute after leaving that glossy power point presentation filled with pretty graphs. I always thought that coming up with the idea was the hardest part. That is, until I had to set up shop for Otteroo myself (or on my own).
There are a billion little things to do to start a business. Some are really fun, like picking a name, while others are painstaking, confusing, sleep-inducing and laborious, like incorporating and bookkeeping. We’re going to share some insights into the key steps we took to set up, the awesome resources that we discovered along the way and the things we wish we knew before we tackled the process:
1. Come up with a name and secure digital properties. Back in the stone ages when the Internet was just beginning, (smart) opportunists snatched up URLs like coke.com so they can sell them to Coca-Cola for a fortune. Be sure that you can get the URL for the company name that you’ve set your heart on at a reasonable cost. You don’t want one that requires too many dashes, underscores or convoluted spellings because you want people to find you quickly. At the same time, grab the handles (account names) on social channels like Facebook, Instagram, Twitter and Snapchat ASAP! Try to keep the handle consistent so your customers can remember it easily and it doesn’t deter them from professing their love for you. It also saves space on packaging and printed collateral. If you are debating between two names and they are both available and cheap, just get them both. You can always give up on the unused one after a year or sell it!
2. Keep track of your expenses. IRS has rules for deducting start up expenses. Whether using Excel or a bookkeeping software, start tracking them immediately! If you’re not super organized, the easiest way is to put everything business related on the same credit card so you can separate them from your personal expenses. Wave is an easy-to-use book keeping software that’s free. It connects with your bank accounts and allows you to upload receipts. But, if categorizing your expenses makes you want to tear your hair out, we at Otteroo LOVE Bench. For a really reasonable rate, your dedicated bookkeeper keeps your book organized, your sanity intact and your accountant happy! We literally cried tears of joy when we found them!
3. Hire the right Legal Eagle. You will be filing a ton of paperwork to the government and needing a lot of documents whether for employment contracts or agreements with vendors and customers. Besides hiring a lawyer, there are also services like Legal Zoom, Rocket Lawyer and websites that spit out documents based on boilerplate templates for a small fee. I have to admit, I was skeptical about paying someone hundreds of dollars an hour but as your business grows, your needs will evolve and at some point it will become much harder for a computer algorithm to handle the nuances that a properly trained lawyer can detect. And what makes or breaks you can be a result of properly understanding these nuances.
That said, there are a ton of lawyers out there and most good ones are quite specialized. A big all service firm can be a one stop for all your legal needs, but they’re typically quite expensive. Fortunately, there are boutique law firms out there with different specializations. Here at Otteroo, we work with three different firms and we love them all for the specific type of service they provide. Here are some areas that a lawyer can help you with:
- Incorporating: Picking the right corporate structure is VERY important. Startup Law Blog is a good resource to understand the advantages and limitations for various legal entities. If you have friends who went to law school, now is the time to take them out to dinner and encourage them to regurgitate what they learned in Corporate Law class.
- Copyright/Trademark: Ever heard of that Chinese company who squatted on “iPad” and got millions of dollars from Apple? Yup, copyrighting and trademarking your name or your original, catchy tagline, is also extremely important. While you can DIY or use an online service, we got confused with all the legal jargon in the application so we asked our wonderful patent lawyer, Phil, to help us out.
- Patent: This is so complicated and so critical that I have written a separate post here.
- Employment: Different states have different employment laws from hiring and terminating employees to enforcing a non-compete employment agreement. Additionally, the laws literally change every year! As with trademarking, we sought legal counsel for advice on this because we knew just enough to know that we don’t know anything!
Other Good Resources When Setting Up Your Company:
- Your local Small Business Administration. Check out their website for free seminars. I have attended a bunch – some are great and others cover more intuitive “no duh” things you may already know.
- Score. One of my favorites, it is run by volunteers who are retired industry veterans. They will match you with people that have the expertise you need.
- Your university alumni organization. Even though Otteroo is not a high tech company, we were still able to get matched up with uber awesome mentors through MIT’s Venture Mentoring Service. They helped us with everything from high level strategies to recommending good product photographers in the Bay Area.
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- Set up Your Shop Already! Vision without Execution Is Hallucination - March 2, 2017
- Patent Your Idea - February 7, 2017