“If I told you I’ve worked hard to get where I’m at, I’d be lying, because I have no idea where I am right now.” ~ Jarod Kintz
SUBSCRIBE THE OUR BLOG BELOW AND JOIN US ON OUR JOURNEY TO SUCCESS
This article is about something near and dear to my heart…accomplishing things without spending a lot of money. Every business owner has done it, but some (like me) started the journey to building a valuable business without much money to their name.
Part 1 has 13 steps. Part 2 has more.
In no way is this article a guarantee of success. Ideas, resources, money, work ethic and luck will all come into play on your journey.
You have to be prepared to work constantly. If you aren’t hungry and prepared to endure hardships to see your vision come to life, entrepreneurship may not be for you.
I started with a dream on Christmas Day ten years ago to change the way people text and allow them to personalize group text messages to their customers, prospects, friends and family. We built our business through blood, sweat and tears. I started this process with almost no money.
How is that possible? I’ll explain…but it all starts with an idea…and a name.
Ideas can vary in difficulty and financial hardship. Even companies that don’t cost a lot to start can lead to wealth. That said, we are talking software in this article (even though the same principles apply), so starting a company is inherently expensive unless you are simultaneously a very talented programmer, lawyer, designer, server infrastructure specialist, marketing expert and operational genius.
You will need all of those, for almost every company.
First the idea. Do you have one? Great…this is by far the easiest part.
Don’t have one? Think about what you need to make your life easier and start there…all great software businesses solve a problem, and if you’re broke you have plenty of them!
Picking a name is easy right? Just name it? Nope…there are a few things you must do:
1) Google your potential name to see:
How many other businesses share that name
How many “results” come up when you GOOGLE the name. The rule of thumb is the more results, the harder it will be to optimize for the web. Try to pick a name with below 1M search results if you can.
2) Go to GoDaddy and check to see if the domain is available.
3) Make sure no one else has trademarked your name (unlikely if not in use).
4) Make sure the name is available in your state’s business registrar.
If you worked your way through that mess and your name works…go to google and put in “.99 cent domain”- you just spent .99 cents to own that domain for a year through GoDaddy or any other service.
REGISTER THE BUSINESS
This is going to cost you $65-$135 depending on whether you go LLC or Corporation. Get it done. For help picking which structure is best for you.
You are going to need to raise money to launch your business Starting a Software Business and no one will put money into a business that doesn’t exist. In the same vein, people might be wary of investing when the company was registered a week before they are going to write a check.
SECURE AN EIN NUMBER
Go here- and get one because legitimate businesses know the answer to “what is your EIN number?”
This will also enable you to open a business bank account.
You will need to select your type of company here as well.
This is FREE.
GET A DUNN & BRADSTREET NUMBER
Get it…build business credit and credibility.
This is FREE.
Open a business bank account so you can start keeping track of your business expenses.
This is FREE.
There is something legitimate about having a logo that shows this is a “real business.”
Get one made…even if you have to go to FIVERR.com to do it. Make sure the logo is “clean” and easy to print. Make sure you get the logo in both JPG and PSD formats. If you can get them in EPS and AI formats too.
Couple points on the logo:
1) Get it in both color and black and white.
2) No “3D” logos. These logos do not print well and look terrible when printed. Don't do it.
3) Keep it clean. What this means is that you can read the name of the business and that the contrast is not messy. Many business owners make the mistake of picking the logo that “looks cool” only to find out later it prints terribly on a card, shirt or promotional item.
4) Make sure you can read the business name easily. I don't care how influenced you were by Star Wars, no one wants to struggle to try and read a business name.
5) The less colors you choose, the less expensive business cards are. Because we don't have a lot of money, ask for 2 color.
You just spent $5.
Go secure the rights to the pages using your business name on:
Not only will this help your SEO and produce results right away when your name is googled, it’s also a way to build a following before you launch.
Now is where the work comes into play. I don’t care how much you think you know about your company to be, you will always learn a lot writing your business plan.
The web has many great templates on what questions your business plan should be answering. Find a template you believe in and get to work.
No investor will ever talk to you without one. For information on how to valuating a software company”
This takes time but is FREE.
Unless you know how much money it will take to launch your company and how you intend to pay an investor back, you are SOL (shit out of luck).
Google “Pro Forma Template” and find a document that suits your business.
Fill it out entirely and study it. This is your path.
This takes time but is FREE.
INVESTOR DECK/PITCH BOOK
An investor deck is a 12-16 page PowerPoint telling a potential investor:
1) what you your idea is? 2) why it is important? 3) how much you need? 4) Expected ROI 5) Timeline for payback 6) Exit strategy(ies) 7) What you will use the money for? 8) Who will be doing the work? 9) What your qualifications are? 10) How does this compare to competition?
This, along with your Pro Forma and business plan will be updated a lot as you go on your journey.
This takes time but is FREE.
Again you can send your logo to FIVERR.com and have someone create business cards with them. I use printingforless.com for my business cards. Get thick stock business cards, it says a lot about you as a person. You want to be cheap, but you don't want people thinking you are low class. The reason you need business cards is it validates that you are real. You will need them for the next step in growing your business, and you will need them for meeting with investors.
You can often find coupon codes for free shipping.
Now you have information, you are armed with an idea and a business model that yields a profit as well as a name, company and logo all for under $150.
Now you need to find the talent to bring it home, and get them on board.
What talent you need is a simple formula.
*User Interface Specialist
*Mobile App Programmer
*Operations and Customer Support
Unfortunately for you, you can’t pick your programming environment completely and must rely on the language or languages your programmer wants.
Two words of wisdom:
1) If you have a real software product don’t build the website on a CMS.
2) Make sure when you are developing the software, at a minimum the development is being done open source.
Accounting and Legal can and usually will be outsourced, but those are also to be considered.
Now subtract the items associated with your talents. Remove Business Development and Operations/Customer Support.
The most important person when you are starting (aside from you) is your User Interface (UI) specialist. The reason the UI specialist is the most important is because they are creating the visual, which will be shown to raise money. Raising money without a visual representation of your product will be much more difficult.
Also if your visual is not good, it’s not likely to inspire investors.
As far as any additional resources, anything you are left with, you need to recruit. How do you recruit people with no money?
First you need to figure out how many resources you need. Then you need to identify those resources. Then you need to get those resources to buy into your idea and vision, and then you need to carve out equity.
You will want to keep a minimum 50.1% of the company yourself in order to protect yourself and control the company, and 15% of the company to raise money (at a minimum). That means you are left with 34.9% of the company to recruit the right people.
Recruiting takes time and skill, but no money.
You can see more information on starting a company in our other blog post on "Lean Startups" here: http://blog.textingbase.com/posts/the-lean-startup-or-do-it-right#sthash.iFwvYPVb.dpbs
So far you have spent $95.99-$165.99. But there's a lot of work left to do! Stay tuned for part 2.
ABOUT THE AUTHOR:
Eric Beans is CEO of Texting Base, Inc., out of Orlando, Florida. Texting Base is a cloud-based software that adds efficiency and power to business texting communications. Combining the efficiency of a “mass text” and the effectiveness of a personal text message, Texting Base uses patent pending software to allow businesses to build relationships with their customers like never before. Prior to Texting Base, Eric Beans owned Premier Mortgage Capital, Inc., a nationwide state charted mortgage company and helped to start TechSpan, a global IT consulting company.