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Monday, July 23, 2007

The Plan

Your Day Job
Before you "quit your day job", and I do want you to, you need to perform quite a bit of due diligence. As with any great structure, your company needs a solid foundation. This post will illustrate the main items that need to be on your checklist. Do you need a business plan? No. Do you need customers? Absolutely. I would recommend testing the market in your spare time to develop an alternate income stream prior to devoting all of your time to the fledgling company. Eventually, try to start multiple streams of income so that all of your "eggs aren't in one basket." Your goal should be NOT to be dependent on any one revenue source.

Business Plans
Business Plans are a great idea, and many lenders and VC require them, but they are often overwhelming at first. If you are using software that builds the business plan, it will ask you a series of questions that will all but depress you. Who are your board members and officers? What is the amount of your cash reserves? Keep in mind, you can become a company, and actual corporation, with very few assets or resources. However, the planning will help you understand the nature of your business in ways you may not have thought about; just don't be discouraged by the process.

Customers
It may seem like a no-brainer, but many people start a company with no existing customers. I call this the "if you build it, they will come" theory. Sometimes this actually works. The story of FedEx is a good example, where they had to build their entire infrastructure with not one customer on opening day. For FedEx, good research and knowing their potential market paid off. I would suggest that the average enterprise start off slowly and build customer momentum until the timing is right. Keep in mind that just because you think your business idea is great, your potential customers may not. Don't let pride and vanity get in the way of logic.

Vendors and Suppliers
Every business has vendors and suppliers, even if they have no customers initially. Have your fulfilment process in place before going live with the business. In the case of IT, it's a good idea to forge a VAR (Value Added Reseller) agreement with key software or hardware providers. I did this, and it proved to be a good side stream of income. It also adds instant credibility for you plus lead generation.

Advisory Board
A group of professionals and mentors that can give you candid, often blunt advice is crucial. It is best to solicit board members with whom you have professional relationships rather than personal ones. A friend is less likely to tell you that your ideas stink. :)

Company Identity
As you start penetrating your market, you will begin establishing your brand. A consistent look and feel is necessary for this, as well as to increase your customers' confidence. Pick a great logo (splurge on a graphics designer if necessary), develop a slogan or catch phrase, and use these items on everything you touch: letterhead, business cards, websites, email signatures, marketing materials, etc.

Bank Account and Lines of Credit
You must open a business bank account if you are incorporated in any form, or else you risk "piercing the corporate veil." More on this subject later. Next, your goal is to develop a rapport with a lender and borrow a small amount of money to establish initial company credit. You may have to secure the loan against an asset in the beginning; eventually, a signature and your books will suffice.

Corporate Credit Card
I find it helpful to carry a corporate credit card that can be paid off each month. This helps manage small expenses that come up, and gives insight into spending patterns.

Partners (in Success): Accountants, Attorneys, Mentors, Lead Sources
These people can also be part of your Advisory Board; they are the folks who want you to succeed because they have a vested interest in you. Spend a lot of time searching for and interviewing these people. Reward them for their time, and it will come back to you in truckloads.

Take my accountant, for example. I respect her and her time, even though she's flexible and understanding when situations throw us off balance. One year cash was short when her yearly bill came, and it took a couple of months for me to pay her. Without her asking, I included two month's interest on the bill at 18% per annum. The results of my good faith actions like this mean that I have a loyal accountant who will travel to meet me anywhere I'm working in my home base of Atlanta, and on my schedule. There is no price for that!

Monday, July 16, 2007

Motivation: The First Step

Hello my friend. You found this blog, so I assume that there is already some motivating factor in your life that is begging for attention. Layoff, outsourcing and downsizing are all great motivators. Maybe the boss is a jerk, or your team is mediocre at best. Perhaps you have great ideas, even a million dollar idea, but cannot commit to turning the idea into reality due to fear.

It's okay to be afraid. Fear is a natural instinct that keeps us alive. However, fear can stifle your possibilities. The answer to fear is planning. Planning will get your company going, provide startup capital, and provide funding for your payroll and benefits (yes, now you need benefits that your employer once provided).

Why do it then? Why risk your regular paycheck in exchange for fear? The answer is freedom, and the ability to control your own destiny. It will be a lot of hard work, particularly at first, but the rewards are worth it. I have benefits, 401K, insurance against every risk imaginable, and I can go fishing tomorrow if I so choose because I work for myself. You currently have fears anyway, don't you? Fear of a supervisor, fear of a layoff, fear of not updating that TPS Report, etc.

Don't get me wrong about my views of the companies I work for. Some of them are really good enterprises; I’m just not a corporate person, and prefer my freedoms. They couldn't afford my salary anyway. ;)

In the next entry, I will delve into planning, and hopefully illustrate some things that you may not have yet thought about.

JMK

Wednesday, July 11, 2007

Nouveau Debut

A new beginning...

The initial entry of much pontification that will hopefully change someones life for the better. This blog is for professional technology people with gumption, guts, balls or whatever you label as power through sheer faith in yourself when facing the unknown.

Over the coming months, we will "chat" about shedding your day job and why you need to. While geared for technology employees, the general principles can apply to anyone. Anyone, that is, who yearns for something more than a regular, predictable paycheck (hence the need for gumption), anyone afraid of losing his (or her) job, anyone who is fed up with the corporate world in which he simply occupies space for (maybe) a tiny raise each year. Is this you?

Topics of upcoming discussion, in Synaptic Order:


  • Entrepreneurship
  • Selling Your Own Wares
  • Wealth Building $$$
  • Kissing Your J.O.B. Goodbye
  • Why I Made J.O.B. an Acronym
  • Franchising
  • Dollar Cost Averaging Over Time
  • Donald Trump's Hair
  • How Corporations Are Structured, and How to Build Yours
  • Tax Sheltering
  • Multiple Streams of Income
  • Outsourcing
  • Downsizing
  • A Cube With a View
  • Jessica Alba
  • Leaving Your Heirs a Legacy
  • Customer Service, or Lack Thereof
  • The Pareto Principle
  • Selling Your Life Away, One Hour at a Time
  • Internet Profits
  • Financial Independence
  • Early Retirement
  • Real Estate Investing
  • Foreclosures
  • Tropical Real Estate
  • Flipping Houses
  • Flipping Jessica Alba
In this journey of discovery, I hope you gain the knowledge and determination to strike out on your own, or to grow what you have started. As with all great journeys, the first steps are the hardest but the most critical. If you never change your routines, then routines are all you will surely ever have.

I started down this path 11 years ago, and have learned enough to share. While tongue-in-cheek, I am dead serious about the need for you to be independent. Most companies are no longer loyal to their employees, and employees loyal to their companies are either afraid, foolish or disillusioned. Companies care only about the shareholders and board of directors.

I challenge you: would you rather use your efforts to make your employer wealthy or yourself?

Best of Luck...
JMK

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