As I mentioned in my previous entry, I'm going into business with my best friend. This is not something we do lightly. We realize that more than just our investment is at stake here. This could very well end our friendship.
But we also believe that it doesn't need to be that way. The first step, we believe, is to acknowledge the possibility and plan for ways to mitigate that risk. Before we agreed to go ahead we had a lengthy discussion about our concerns. Here are some of what we came up with.
- We find we can't work as partners.
- What if there becomes a real or perceived imbalance in the division of labor?
- What if one of us runs into financial difficulties? Would this put pressure on the other to help them out by splitting the take more in their favor for awhile?
- We may end up knowing too much about each others' personal finances.
- What if we can't make enough to support either family, let alone both?
- We realize unexpected success and can't agree on what to do with the money? (nice problem to have, but sometimes phenomenal success can be just as deadly to a business as phenomenal failure).
- We just get on each others' nerves.
- Conflicting goals for the business.
- We find success, but can't maintain it.
- Personality dynamic leads to one partner always giving in to the other one.
- One of us decides we want out, even if it means killing the business.
- Making sure we establish criteria for valuing the company should one of us want to buy out the other.
- What if one of us wants to bring in another partner against the other's wishes?
- What if we find ourselves being competitive with one another?
It's not exactly an exercise in positive mental attitude, but if friends are going to be partners, I think these and many more questions should be considered first. In our case we both agreed that our friendship is more important than our business, and that we're willing to chloroform the whole thing if it starts to come between us. But we were also able to discuss all of the above points rationally. In some cases we just agreed that they could become a problem and we just have to trust each other to act responsibly and work it out. In other cases, though, we were able to discuss concrete plans for dealing with the risk should it occur.
Has anyone else gone through a similar process in forming a business partnership with a friend? What was your experience? What things were important to you? Drop me a comment and tell me about it!
Sunday, October 18, 2009
Taking the plunge
This blog has languished for awhile now, as I'd largely reconciled myself to the idea that I'm not ready to start a business. For one thing, I've lacked capital. For another I've lacked time and drive.
Well, times change, and desperate times call for desperate measures. Recently a good friend of mine also go laid off. This is the friend of whom I've often said that if I had about $50,000 to put him in business with I'd do it. Well, instead we found an opportunity that can put us in business for about $6,000. I don't think either of us would have the guts to do it alone, but together we've convinced each other to give it a try.
This is a serious endeavor. We've registered a company with the state, got our tax ID, and plunked down some significant cash. We're currently going through the steps to select a product line and find suppliers. If everything goes well, we'll be Internet retailers by the end of the month.
Are we crazy? Quite possibly. But one advantage of having a partner is diluted risk. Though we still lose money if this fails, neither of us loses as much. And if we succeed, we'll at the very least have a revenue stream that will help us both avoid the poor house that much longer while we find real jobs. But our goal/dream is to turn this into our real jobs. We hope by the end of the year to be making enough to be able to stop looking.
Well, times change, and desperate times call for desperate measures. Recently a good friend of mine also go laid off. This is the friend of whom I've often said that if I had about $50,000 to put him in business with I'd do it. Well, instead we found an opportunity that can put us in business for about $6,000. I don't think either of us would have the guts to do it alone, but together we've convinced each other to give it a try.
This is a serious endeavor. We've registered a company with the state, got our tax ID, and plunked down some significant cash. We're currently going through the steps to select a product line and find suppliers. If everything goes well, we'll be Internet retailers by the end of the month.
Are we crazy? Quite possibly. But one advantage of having a partner is diluted risk. Though we still lose money if this fails, neither of us loses as much. And if we succeed, we'll at the very least have a revenue stream that will help us both avoid the poor house that much longer while we find real jobs. But our goal/dream is to turn this into our real jobs. We hope by the end of the year to be making enough to be able to stop looking.
Tuesday, June 2, 2009
Putting the "service" in government service
Last week we created a business entity so my wife could get a sales tax certificate to sell her crafts at a local craft show/fundraiser. I remember seeing something online, so I went onto the Secretary of State's site and found the Idaho Business Resources site. They have an automated system there that walks you through the entire process of setting up a business entity with the state, including wizards to help you determine what licenses you may need. Very cool system.
We registered her as a sole proprietorship, however, so I don't know how well it works for more complicated entities that require a registration fee. I'll let you know when I register my business entity later this year.
We registered her as a sole proprietorship, however, so I don't know how well it works for more complicated entities that require a registration fee. I'll let you know when I register my business entity later this year.
Friday, May 22, 2009
Conflicting priorities: the bane of excellence or savior of "good enough"?
Since I lack the funding to just dive in and work my new business to the exclusion of everything else that brings in money, I find I have to slip my business efforts in when I can. As a result, the business is progressing slowly and, truth be told, the quality is not what it could be. I find myself settling for what I can get done in the time slot available rather than taking the time to get everything just right.
This may not be a bad thing. I am a bit of a perfectionist, and if I thought I had the time to get things perfect I may slip into paralysis by analysis and get even less done. The thought that there is one right solution tends to make me want to find it, even though there really is no way of knowing if I do.
I'm finding that I have a better chance of getting things right, however, if I take the time to create a plan. It's easier to know where I left off on something and where I was heading with it if I have something written down I can refer back to. Of course planning takes time, too, and the temptation is always there to skip planning and "actually get something done".
That's where discipline comes in. That's also where I have room for improvement. My goal for today is to take some time this afternoon before I knock off work for the week to plan where I'm going with my business (and everything else I've got going on) and break out some short-term objectives to pursue next week. That way when I come in on Monday morning I'll be able to pick up where I left off, knowing exactly where I'm headed.
This may not be a bad thing. I am a bit of a perfectionist, and if I thought I had the time to get things perfect I may slip into paralysis by analysis and get even less done. The thought that there is one right solution tends to make me want to find it, even though there really is no way of knowing if I do.
I'm finding that I have a better chance of getting things right, however, if I take the time to create a plan. It's easier to know where I left off on something and where I was heading with it if I have something written down I can refer back to. Of course planning takes time, too, and the temptation is always there to skip planning and "actually get something done".
That's where discipline comes in. That's also where I have room for improvement. My goal for today is to take some time this afternoon before I knock off work for the week to plan where I'm going with my business (and everything else I've got going on) and break out some short-term objectives to pursue next week. That way when I come in on Monday morning I'll be able to pick up where I left off, knowing exactly where I'm headed.
Thursday, May 14, 2009
When do you give up and hire a pro?
Yesterday my computer told me it was time to upgrade to Internet Explorer 8. I did. I hate it. And my web sites look all messed up now. So I finally made the break to Firefox, hoping it was just a IE8 thing. Nope. My sites are messed up there, too (and probably have been from the beginning).
So today I spent a few hours cleaning up me CSS to deal with the problems. Everything is ironed out now...mostly. There's still something funky going on with IE8.
If I had the money it would be tempting to let a pro handle this. I should be working more on my content right now instead of tweaking style sheets. On the other hand, hiring a pro would probably wipe out any profits I may make this year. I admit I have no idea how much a pro would even cost, but I suspect it's not cheap.
As they say, it takes money to make money. But I'm determined to succeed in spite of that obstacle.
So today I spent a few hours cleaning up me CSS to deal with the problems. Everything is ironed out now...mostly. There's still something funky going on with IE8.
If I had the money it would be tempting to let a pro handle this. I should be working more on my content right now instead of tweaking style sheets. On the other hand, hiring a pro would probably wipe out any profits I may make this year. I admit I have no idea how much a pro would even cost, but I suspect it's not cheap.
As they say, it takes money to make money. But I'm determined to succeed in spite of that obstacle.
Monday, May 4, 2009
The MetroMom puts on a great teleseminar
My recent foray into Twitter (http://twitter.com/thomstrat) has opened up a new source of information for me. But perhaps the best was a teleseminer I sneaked into over the weekend. The MetroMom, Kim DeYoung, runs a business supporting mothers running their own businesses from home. As part of this effort, she put together a teleseminer with 18 different experts in various aspects of running an online business. But, as her target audience is busy moms, she added a helpful twist.
The entire seminar was prerecorded and made available to participants at any time during the two days. Attendees could read the session descriptions and pick which sessions they wanted to attend at the time they could actually attend. Fantastic idea!
Though the seminar was promoted as "for women" I signed up anyway, as the majority of the topics were things I'm interested in with my current business plans. Fortunately it's easy to go "in drag" on the internet. Actually, it didn't matter. My Twitter avatar is very obviously male, and I tweeted about many of the sessions I attended. I got persona responses from DeYoung and several presenters, and no one said anything.
I was very impressed. This was a high-quality seminar--for free! DeYoung is a great interviewer, and her experts were...well, expert. There was a lot of good information given. Yet I could see how the seminar could have been so much less than it was if DeYoung hadn't worked hard to provide substance. As it was, the seminar reflected very well on all who presented, and even more so on DeYoung.
Great concept, great execution. I give it two thumbs up.
The entire seminar was prerecorded and made available to participants at any time during the two days. Attendees could read the session descriptions and pick which sessions they wanted to attend at the time they could actually attend. Fantastic idea!
Though the seminar was promoted as "for women" I signed up anyway, as the majority of the topics were things I'm interested in with my current business plans. Fortunately it's easy to go "in drag" on the internet. Actually, it didn't matter. My Twitter avatar is very obviously male, and I tweeted about many of the sessions I attended. I got persona responses from DeYoung and several presenters, and no one said anything.
I was very impressed. This was a high-quality seminar--for free! DeYoung is a great interviewer, and her experts were...well, expert. There was a lot of good information given. Yet I could see how the seminar could have been so much less than it was if DeYoung hadn't worked hard to provide substance. As it was, the seminar reflected very well on all who presented, and even more so on DeYoung.
Great concept, great execution. I give it two thumbs up.
Tuesday, April 14, 2009
Time management for starting a business
Many people who are successes at business just dived in feet first. The rest of us hang on to their normal 9-to-5 while they try to get things up and running. For most of us that probably won't work. To quote Yoda from The Empire Strikes Back, "That is why you fail".
And yet it's not necessarily bad to try and get as far as you can before taking the leap the rest of the way. It's just most of us lack focus. We have good intentions of building up our business on the side, but we never seem to get it done. Why is that?
I suggest it's because we lack the discipline. Other things come first (and often they should), or when we do have the time we forget that we're supposed to be doing something with our business plan. We don't readily remember what the next key step is, so we push it aside and go do something clearer and more pressing.
The solution, I believe, is to treat your business like a project. Project managers know that you eat an elephant a bite at a time. But they also know you need to know where to bite next. So how do project managers tackle a project? The move from the big to the small as follows:
Start at the top: Jot down a quick list of things that must be done before your business can start operations. Keep it broad and general, like "secure inventory", or "set up accounts". Don't attempt to define any of these yet, just get them down on paper. Go until you run out of ideas, but be prepare to add more as they occur to you.
Pick a top-level item and break it down: Take one of the items you just recorded, preferably the one you feel is the most immediate need. Think about the various things that need to be done to accomplish that step and write them down. For example, if you wrote an item for "set up bookkeeping" then ask yourself what would you need to do to complete that task. Your answers may look something like:
Once you've completed this step you should prioritize them based on what steps absolutely need to happen before the others. Obviously you can't configure software you do not yet have, but defining you account list could maybe be done at any point prior to configuring the software. You should complete this step with a list in chronological order of what you need to do and when.
Break items down further as needed: Depending on how organized and disciplined you are, or on how large blocks of time you expect to have, this may be as detailed as you need to go. But for others of us, we need to break each step down further. For example, we could break down "compare bookkeeping software packages" further as follows:
It's not a long list, but it's much more detailed. When you know exactly what your next step is, it's much easier to remember next time you have ten free minutes that this would be a good time to Google "accounting software small business" and see what packages come up. You can do that easily in ten minutes, and once you're done you are that much closer to your goal. You may even feel a surge of satisfaction knowing that you actually made progress toward your dream.
Continue and repeat as needed: Break each item and step down until you've done so for all your work items. Look for dependencies between the separate work items and subordinate steps. Start making a list of the "first steps" in each area; items that other steps are dependent on, quick wins, or other small tasks that would help move things along. Take the top ten and keep the list handy.
Whenever you have free time pull out your list and see if any of the top ten can be done just then. If so, do them. If not, relax knowing that you're not doing anything because you can't at the moment. As you complete several items on your list return to your master list and "refill".
Make sure you cross off completed items on your master list. Take a few moments to note just how many tasks you've completed. You are making progress! Doesn't it feel good?! Celebrate your progress!
It may take a considerable amount of time to get organized initially, but once you've got the master list you're most of the way there. Ten minutes a day or half an hour a week is all you need to stay up to date. Add new items to your master list as they occur to you. Look over your list to see if your priorities or dependencies have changed. Refill your Top Ten list if you haven't already done so. Boom! You're on your way again.
Organization and time management can be the key to getting your business from dream to the reality. Don't just sit around wishing you could get things done. Take charge, get organized, and get things done!
Update: Havi, at The Fluent Self, has a related post. Do just one thing.
And yet it's not necessarily bad to try and get as far as you can before taking the leap the rest of the way. It's just most of us lack focus. We have good intentions of building up our business on the side, but we never seem to get it done. Why is that?
I suggest it's because we lack the discipline. Other things come first (and often they should), or when we do have the time we forget that we're supposed to be doing something with our business plan. We don't readily remember what the next key step is, so we push it aside and go do something clearer and more pressing.
The solution, I believe, is to treat your business like a project. Project managers know that you eat an elephant a bite at a time. But they also know you need to know where to bite next. So how do project managers tackle a project? The move from the big to the small as follows:
Start at the top: Jot down a quick list of things that must be done before your business can start operations. Keep it broad and general, like "secure inventory", or "set up accounts". Don't attempt to define any of these yet, just get them down on paper. Go until you run out of ideas, but be prepare to add more as they occur to you.
Pick a top-level item and break it down: Take one of the items you just recorded, preferably the one you feel is the most immediate need. Think about the various things that need to be done to accomplish that step and write them down. For example, if you wrote an item for "set up bookkeeping" then ask yourself what would you need to do to complete that task. Your answers may look something like:
- Compare bookkeeping software packages
- Select bookkeeping software
- Compare prices for selected software from different vendors
- Purchase software
- Define account list
- Install and configure software
- Complete setup of accounts in software
Once you've completed this step you should prioritize them based on what steps absolutely need to happen before the others. Obviously you can't configure software you do not yet have, but defining you account list could maybe be done at any point prior to configuring the software. You should complete this step with a list in chronological order of what you need to do and when.
Break items down further as needed: Depending on how organized and disciplined you are, or on how large blocks of time you expect to have, this may be as detailed as you need to go. But for others of us, we need to break each step down further. For example, we could break down "compare bookkeeping software packages" further as follows:
- Google or Amazon.com search to find out the main packages
- Read reviews of each package to determine what key considerations might be
- Create your own list of key criteria for evaluating software
It's not a long list, but it's much more detailed. When you know exactly what your next step is, it's much easier to remember next time you have ten free minutes that this would be a good time to Google "accounting software small business" and see what packages come up. You can do that easily in ten minutes, and once you're done you are that much closer to your goal. You may even feel a surge of satisfaction knowing that you actually made progress toward your dream.
Continue and repeat as needed: Break each item and step down until you've done so for all your work items. Look for dependencies between the separate work items and subordinate steps. Start making a list of the "first steps" in each area; items that other steps are dependent on, quick wins, or other small tasks that would help move things along. Take the top ten and keep the list handy.
Whenever you have free time pull out your list and see if any of the top ten can be done just then. If so, do them. If not, relax knowing that you're not doing anything because you can't at the moment. As you complete several items on your list return to your master list and "refill".
Make sure you cross off completed items on your master list. Take a few moments to note just how many tasks you've completed. You are making progress! Doesn't it feel good?! Celebrate your progress!
It may take a considerable amount of time to get organized initially, but once you've got the master list you're most of the way there. Ten minutes a day or half an hour a week is all you need to stay up to date. Add new items to your master list as they occur to you. Look over your list to see if your priorities or dependencies have changed. Refill your Top Ten list if you haven't already done so. Boom! You're on your way again.
Organization and time management can be the key to getting your business from dream to the reality. Don't just sit around wishing you could get things done. Take charge, get organized, and get things done!
Update: Havi, at The Fluent Self, has a related post. Do just one thing.
Subscribe to:
Posts (Atom)
