Aug

26

I Think Therefore I Inc.

August 26, 2008 |

By no means the title of the article means that those that don’t Inc don’t Think. It refers at how easy is to start your own business in a country founded by capitalist principles and values (even when we may be losing them in recent years).

Many people ask the same thing: How do I set up a company? The same amount of people say things like: “One of these days I will start a company”. For sure, there is a framework of laws just to handle ad-hoc Sole Proprietor companies. For just a few pennies more and a handful of paperwork, these can be easily converted into LLC or S/C Corporations. Most of these paperwork details can be done in a few days, often over the internet. However, more often than not these people miss the point of starting your own business.

The main purpose is to deliver goods and/or services in exchange for compensation: doing Business! The Business part is more important than the paperwork part. With enough business you can have a lawyer and an accountant charge your for the paperwork that you could have filed by yourself — who does that paperwork is almost irrelevant. Without Business you have no Business at all.

Build it and they will come: Mention it and they will also come: Another thing I have learned is that part of doing the business it making its goods and/or services available. Often by just mentioning that you are willing and capable of offering (a good track record helps a lot, of course, and compensation will vary depending on it).  The most important part of this is the “willing and capable” part — you must convince people you have the time, resources and know-how (which often means you must not have a full time job or should be willing to abandon the one you have).

No help wanted: yet. Some other people think that building a business is about hiring people. People are hired when you know you have steady business. Contractors are secured when you do not have steady business and need temporary help. The greatness of the company is not in how many employees it has, but on how much Business it generates. (Business creates needs for employees, and in the end produces more employment than the other way around).

No investors needed: yet. Starting a business is not about securing angel or venture capital either. While your grandma may be willing to pay you to start a business, she is not paying you because she trusts you but because she loves you. The average investor will probably want to see some track record (be it in your own career or in a business that you have already started) before dispensing any money. And with money comes the loss of control and the loss of a big share of the earnings: thus the idea of owning a Business starts to slip away. A million dollars of venture capital money doesn’t mean a million dollars in your pocket: it just means you lost a million dollar’s worth of your company into somebody else’s hands. Start the Business first, and then seek investors, if needed — you will retain more control and money that way.

Remember, the main purpose of a Business is not the employees, not the investors, not the paperwork:

The main purpose is to deliver goods and/or services in exchange for compensation!


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