Welcome To Startup Students

This is the first part of a multi part series that I should have started long ago, and I apologize for not doing so.  This is more of a refresher course for some of you, but I feel it’s important to have this chronicled for those new to entrepreneurship.

When creating the next great startup, at an early stage you will come to a crossroads and must choose how to form your business.  Which option you choose will have a number of ramifications and each will be discussed in detail over the coming days.  There are four types of business formation methods that can be considered (although I wouldn’t recommend a couple of them).  Your choices are:

• Sole Proprietorship
• Partnership
  • General
  • Limited
• Limited Liability Corporation
• Corporations
  • C corporations
  • Subchapter S corporations

When deciding which is best for you, keep in mind some of the following:

• Will I be conducting any business internationally?
• Are there any tax implications?
• What liabilities must I be aware of?
• Might I be faced with litigation at some point in association with customers, employees, or other businesses?
• What are my plans for future growth?
• What types of relationships are present with potential partners?
• Do I have a grasp on my capital requirements?
• What is my exit strategy?

While pondering those questions, lets take a further look into proprietorships and partnerships.

A sole proprietorship is a business venture that is solely owned by an individual.  That person is also solely liable for any of the venture’s possible liabilities.  This means that you have a personal liability to pay off anything not covered by your assets.  Honestly, there are very few situations where this type of formation makes sense.

A partnership is a venture that is owned by two or more individuals.  Like the above, each owner is fully liable.  When we talk about a limited partnership, the limited partner is only liable for his/her capital investment. 

When considering a partnership, consider the following questions:

• Who will maintain management and control?
• What resolutions are in place in case of dispute?
• Consider the financial and time contributions of each partner.
• What occurs in the eventual dissolution of the partnership?
• Can we add new partners?

Again, I don’t think I would ever recommend this type of formation either, but you do tend to see these – especially with professionals such as doctors and lawyers.

In the coming days we will discuss the other types of formations including corporations and LLCs along with suggestions on which type would be best for your type of business.  Class dismissed.

I spent the better part of my afternoon giving the site a facelift.  It’s still a work in progress, so please let me know your thoughts on the design, usability, etc. by commenting to this post.

With the redesign will come more frequent updates, so look forward to more great content coming your way shortly from Startup Students.  Class dismissed.

Note: Welcome to Startup Students. If you enjoy this post, don’t forget to Stumble, comment, and subscribe to the RSS feed!

In the web development business, and many other small businesses it’s tough to stand out from the crowd. Designers are a dime a dozen these days, especially with the advent of outsourcing services such as ELance.

Personally, I’ve relied on top notch service and client referrals to maintain a steady income. Things are going quite well, in fact I’ve reached the point where I must turn down work on a regular basis.

Yet recently I have been looking to grow. Hiring another developer does’nt quite yet make sense, because the number of jobs I’ve turned down doesn’t quite justify the expansion. However, I just finished reading a fantastic book on cold calling entitled “Cold Calling Techniques That Really Work”- and by following the techniques I feel I’ll be able to sustain enough business to justify hiring additional developers.

There are five basic elements to the successful cold call:

1. Get the person’s attention. But not using a cheesy introduction.
2. Identify yourself and your company
3. Give the reason for you call
4. Make a qualifying/questioning statement
5. Set the appointment

Below, I have included some time tested scripts that can be used when making your calls:

• Initial Contact
  • Good Morning Mr. Adams, this is Brett from Brett Adams Design LLC. The reason I’m calling you today specifically is so I can stop by and tell you about our latest web site implementation (or service, or product, or program) that increases traffic and click-thru sales (or whatever applies to your business). I’m sure that you, like (name of previous client) are interested in increasing site traffic.
  • Generally, you are given a positive response by the prospect at this point.
  • That’s great Mr. Adams, let’s get together. How’s this Thursday at 2:00?

As I mentioned, lots of my business comes from referrals or third-party endorsements. But the great thing is that there is a script for those scenarios as well.

• Referral Script
  • Good morning Mr. Adams, this is (insert brief commercial about your business). The reason I’m calling you to today is that Mr. Smith just suggested I give you a call to set up an appointment. I wanted to if Thursday at 2:00 would be okay.

What tends to make these scripts successful is the fact that they generally require a positive response. You aren’t giving them the option to dance around or avoid your request. I’ll be implementing these strategies heavily in the coming weeks and I will keep you updated on the success.

Here are some tips, in no particular order, when cold calling:

• The object (for me at least) is to set an appointment. I’m not looking to close a sale over the phone, I’d rather sit down face to face and explain the value of choosing my services over those of the competition.
• No matter how good you are, sales is still a numbers game. 1/3 of your clients will fall into your lap, 1/3 won’t say yes no matter what, and the other 1/3 can potentially be convinced – and that is the portion that matters when it comes to being a successful cold caller.
• Practice your script, you don’t want to sound as though you are reading off of one, but it’s vital that you do in fact have one.
• People respond in kind. Think, feel, act, and sound positive and you will elicit positive responses.

Somewhat long post today but I hope you enjoyed the lesson and can utilize these techniques to grow your student startup! Class dismissed.

Note: Welcome to Startup Students. If you enjoy this post, don’t forget to Stumble, comment, and subscribe to the RSS feed!

In light of the disastrous fire situation in California, I thought it would be good to once again bring up the crucial importance of document storage.If you’re like me, especially since the stolen laptop debacle, you keep all your important papers in a sturdy filing cabinet and obsess over backing up your hard drive. No? Well, then I suggest reading this.

However, planning for a potential disaster goes well beyond storage. You need an action plan. What happens to your business in case of injury or death? Does anyone else have the keys to your filing cabinet or safe? Again, you might know the method to your storage madness, but would someone else?

Here are some tips:

• Store and file your information in multiple locations. For your harddrive, utilize DVD’s, external drives, online storage centers, or a combination of all three. Photocopy important documents and compile a list of stored contents; then place in separate locations.
• If you have yet to do so, start collecting relevant documents that would be crucial during an emergency such as banking, insurance, incorporation, and medical papers.
• Organize – then create a list of the contents of your filing cabinet, safe, and harddrive so that you can easily pull the needed information when time is of the essence.
• Create multiple copies of personal documents such as birth certificates, etc. that may be required by government entities in times of disaster. Keep in mind that copy machines may not be available when disaster strikes.
• Inform one or two individuals about the contents and whereabouts of your critical documents in case you are unavailable.
• Once your system is in place, its paramount that you maintain it. Dont wait til the end of the year to do it all again – instead remain aware of what documents should be added.

Generally, we don’t think about these things until it is too late. Take the initiative now to get your things in order. Class dismissed.

 When Virgin Records founder Richard Branson dropped our of school, his headmaster offered these parting words, “Congratulations, Branson.  I predict you will either go to prison or become a millionaire.” So what does that have to do with?  Nothing really, but I thought it was fairly interesting.

At any rate, as an entrepreneur, you will soon find that you simply cannot do it all yourself.  You’ve got to surround youself with the right people – but still maintain to stick to your guns.  Here are some sure-fire keys to success:

• Hire highly motivated individuals.  But be sure they’re motivated for the right reasons.  Those who are self motivated make the best candidates.
• As you surround yourself with great people, be sure to help them become even greater.  A little karma goes a long way.
• Create, maintain, and update as needed your vision and mission.  This creates a sense of clarity outlining your future direction.
• Create, maintain, and update your company values.  A strong corporate culture from the get-go (and then sticking with it) is often overlooked.
• Now that you have the right people on the bus, don’t let them get off!  Be sure to offer appropriate merit based rewards.
• As you grow and expand your business (and your personal knowledge), it would be a great idea to share the wealth.  Offer unique opportunities that allow your employees to garner more experience, but remember to keep your culture strong.  Now that you have highly experienced employees, you surely will want to hang onto them.
• Offering financial rewards is key, but did you know that offering praise is actually a much better motivator?  Make a point to always celebrate success, even if it’s relatively minor.

Class dismissed.