Creating a new business is a lot of work. Oh sure, you can run to the Town Clerk, file some paperwork for a DBA and be out of there in less than an hour, spending maybe $35, but if you want to protect yourself, you need to do things right. That means a lot of time, a lot of effort, and most importantly, a lot of work.
There are a bunch of things that you’re going to need to do right off the bat before you even think about registering your new company. For myself, the choice to be a software company was an easy one. I’ve wanted to run my own company for more than 15 years now, very close to 20 in fact. I always knew that it was what I wanted to do. Prior to creating Moon River Software, I started a company called Game Thoughts. It was never the great success that I had envisioned, and there were a number of reasons why, which I will get into at some other time.
But Game Thoughts had everything going for it at the time. It was started back in August of 2000. Granted, this was right around the start of the bubble burst, but the gaming market was projected to explode over the next 10 years, and explode it did. We thought we were bound for greatness, and it was only a matter of time. Fast forward 5 years. While the gaming industry has indeed taken off, Game Thoughts did not.
In line with my thoughts on learning more from failure than from success, I will elaborate on the failures of Game Thoughts at a later date. This article is all about bootstrapping your business and how you need to get started.
The first thing you need to do is figure out what you’re going to be doing. The fact that you’re reading this lends a lot of credence to the idea that you plan on creating your own software startup company. Not a guarantee, but plausible of course. Now beyond software, knowing generally what kind of software you want to write will help a little bit. To the previously mentioned example of Game Thoughts, we wanted to work with games. PC games more specifically. Our expertise was not with the Mac or Linux, so they were somewhat out of the question. Similarly, console games were out of the question, as they required developers kits and a significant outlay of cash up front to be able to do anything right away.
Knowing what you want to do will help guide your future. You should write a one line mission statement, something that will guide you when the future gets a bit hazy. Ours was more of a tag line than anything else, but it worked just as well. “Welcome to the future of your imagination.”.
Once you have your mission statement, or tag line if you will, think of a couple of products that you can create. I’m going to concentrate more on business applications than games, because that’s what Moon River Software will be doing. I want you to realize, that I certainly mean more than one product. There are very few companies these days which can survive with only a single product unless they are extremely small.
Also, think about what you want to accomplish. Your high school guidance counselor would ask you idiotic questions like “What do you want to do with your life?” and “Where do you see yourself in 5-10 years?” Unfortunately, these questions really need to be answered. While I’ll be a bit coy in my answers for Moon River Software, I can tell you a few details.
MRS is going to develop mainly business applications. Our first product, named Moon River Milestones is currently in beta. It is a software project management solution targeted towards small companies who want to put together complex software as quickly and efficiently as possible. Mid way through development, Milestones has become essential to the project management of Moon River Software. The fact that we rely heavily on our own software is evidence enough of the need for it in the marketplace.
Next, you need a name for your company. This will require a considerable amount of thought by you and your partners. Did I say partners? Well, lets discuss partners before we consider a name. Partners are essential to any budding corporation. Without partners, you’re going to have a hard time getting everything done. Remember that billion things to do that I previously mentioned? Well, your partners will help you burn through them a bit faster than you could on your own. Even better, most partners will bring something to the table. You might be an excellent coder, but a friend of yours is a brilliant marketer. You should choose partners who can help contribute something different to the new company.
It’s a common affliction that most people have to want to be with and around people who are very similar to themselves. This is extremely common in hiring new employees. Most people develop an affinity for people during an interview who are very much like themselves. This can be very dangerous to a new company. You’ll end up with lemmings. Everyone is moving in the same direction, but if the leader isn’t going the right way, nobody else will have the sense to question the direction and the lot of them will end up in the water. Not good.
So, make sure that you choose partners who can contribute, but aren’t lemmings.
As for the name of the company, there are a number of factors to consider. Is your company name easy to understand over the phone, will it be easily misspelled, is it too long, is it too short, does it sound too much like that of another company, is the name already taken, etc. Moon River Software was not our first choice, nor was it our second. The original name for the company was to be Bitclinic Software. Great name for an anti-spy ware vendor, but not for a business software provider. It was also pointed out that when you say ‘Bitclinic’, it’s somewhat difficult to understand what is really being said. Is it ‘Bid Clinic’? Is it one word or two?
It’s simply not clear. We purchased the domain name ‘bitclinic.com’ some time before incorporating because we weren’t sure what to go with and this was one of the options. In the end, an overnight sailing trip around Gloucester and Rockport yielded the name that we were looking for. After a brainstorming session, a few beers, some laughs, and a few days of contemplating our various results, we settled on Moon River Software.
Make sure that you have a list of your top five choices when you go to register your business. It’s quite possible that your first, second, or even third or fourth choices are taken. Some quick searches using Google will probably let you know right away whether they’re likely to be available or not, but you never know. It’s entirely possible that several years ago a company went out of business with the name that you’re trying to register.
Don’t get too attached to the name either. It’s only a name. I know that it’s very difficult to let go once you settle on one, but don’t ever forget that it’s only a name. The name of your company will have exactly zero dollars worth of value. It’s the work behind it that will make you money. I certainly don’t believe that the name of ‘Mike Rowe Soft’ would have any value if it weren’t for that other company.
So, we’ve got a rough idea of what the company will do, perhaps some ideas for the name of the company, we’ve talked about partners, the next thing you need to do is actually register the company. I would highly recommend that you seek out a suitable CPA to advise you on the type of company to register and find an attorney who you feel comfortable with to do the actual incorporation work for you.
There are several types of companies: Sole Proprietorship, S-Corporation, C-Corporation, and LLC. There are likely others, but these are the main ones. I can’t stress this enough. I’m not an attorney, and I’m not a CPA, so I take no responsibility for what you do here. But get a CPA and an attorney to keep on retainer. These guys will get you through the first couple of years. How do I know? I read it on the Internet of course. The first couple of consultations should probably be free, but once you request that these guys actually do any work, it’s going to cost you some money. Here’s where it can get ugly.
How do you pay to start up a company when you don’t have any money? Unfortunately, this is where I’m going to have to leave you. Tune in later for Volume II.