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MenuHow do I start a company?
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How to start a company:
1) Come up with an idea (one that can make money)
2) Build a prototype (hardware, software, whatever)
3) Get evidence that people want it
4) Further refine the prototype and start selling it
5) When you've sold your first thing you now have, "a company"
At some point in that path you'll probably want to
A) Register your company (usually before step 4)
B) Get a cofounder (usually some time before step 4)
C) Get investment (usually not until after step 3) to be able to grow faster
Don't forget the business plan. Even if you aren't looking for funding or investors, taking the time to write this up will help you get a realistic picture of what to expect as far as revenue, costs, profitability, goals, etc. And if you are looking for any type of capital, having this is a requirement.
Hi, this is Ann, a business coach for startups and entrepreneurs.
Starting up equals giving birth. It involves a lot of passion, time, energy, consideration and so on. Since your question is a little vague, I would love to suggest some deep inner work that you might want to work on:
1. How much do you love that company? How long do you expect to stay with it? A year? 5 years? 10 years? Or entire life?
2. How long after running your company do you expect to get back your initial investment?
3. If it could not get any financial support from investors, what would you do? Just give it up or think of plan B, C, D....?
After that, you may want to skim through the various types of company to choose one that fits your intention (sole proprietor, LLC, corporation) and read some effective strategies for the chosen one.
And the last thing is from my personal experience. You should have some co-founder or at least someone as passionate as you are since the start up path is never and will never be easy.
Hope that I have answered all of your questions. Should you need any help, feel free to contact me. Ann is always all ears!
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Business partner I want to bring on will invest more money than me, but will be less involved in operations, how do I split the company?
Cash money should be treated separately than sweat equity. There are practical reasons for this namely that sweat equity should always be granted in conjunction with a vesting agreement (standard in tech is 4 year but in other sectors, 3 is often the standard) but that cash money should not be subjected to vesting. Typically, if you're at the idea stage, the valuation of the actual cash going in (again for software) is anywhere between $300,000 and $1m (pre-money). If you're operating in any other type of industry, valuations would be much lower at the earliest stage. The best way to calculate sweat equity (in my experience) is to use this calculator as a guide: http://foundrs.com/. If you message me privately (via Clarity) with some more info on what the business is, I can tell you whether I would be helpful to you in a call.TW
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How do we get our clients to give us a personal introduction to other people who are capable of becoming clients?
The one word answer is: ask! Make it a process to systematically ask every client for referrals. Referrals from happy customers are indeed one of the best ways to generate new business. When and how to ask is a matter of taste and practice. Let me give you two examples which apply to B2B. 1. Ask as soon as your prospect has made his buying decision. From Steli Efti, Startup Sales Guide - www.startupsalesguide.com "When a prospect has already made a buying decision, say: Great, but I can’t let you buy just yet. Right now, we are a startup. This means we focus all our energy, time and resources on delivering as much value as we can to our customers. We don’t have a big marketing budget. If you are happy with our product, please recommend us to others who you think might benefit from our solution as well.” 2. Ask when you are about 2/3 of a project, or when you have significantly progressed in the relationship with your buyer. Here is some great material by Alan Weiss: - Asking For Referrals: https://www.youtube.com/watch?v=pXJXukZB94s - How to maximize a referral: http://www.contrarianconsulting.com/how-to-maximize-a-referral/ Hope that helps. Put it into practice this week and let us know how it goes!NB
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