Probably the first and most persistent question I had when my partner and I started our own company was, “When does the company actually start?” Babies have due dates, and it turns out that companies (thanks, Scalia!) are people. So on what date would our company be considered born?
To put it a different way: when would we be in business? That’s a funny term, right? In business. You’re either in business or you’re out of business. We tend to think of the latter as happening when the company folds, but it’s true before the company starts as well: Before you can be in business, you’ve got to be out of business. When would we transition from the latter to the former?
This question turns out not to have a straightforward answer. In the eyes of the state of California, our company became in business on July 8, 2015—the date of the stamp applied to our Articles of Incorporation by some clerk in Sacramento. This is both relevant and not. It’s relevant because obtaining one’s Articles of Incorporation, which sounds fancy but is really just a single piece of paper with some boilerplate legalese on it, is necessary to obtain a federal tax ID number, which is necessary for doings things like opening a company bank account, obtaining a business license, creating company bylaws, etc. So it’s important, the Articles are.
But did our business start on July 8? Not exactly. I didn’t collect my first paycheck until the middle of September, but even that’s an arbitrary date, because my first paycheck was drawn from funds my partner and I had invested from our savings accounts, i.e. we were paying ourselves with our own money. I’m no Andrew Carnegie, but I’m pretty sure that’s not how you build an empire. I guess you could say we became in business the moment the first check from our first client arrived in mid-October, but that doesn’t feel right, either: My partner and I had been working on starting this company since at least May.
I’ve actually never figured out the answer to this question, and so it joins a long list of things I don’t know that includes the difference between a C-Corp and an S-Corp, how to use QuickBooks, and the subtleties of setting up a 401K, all of which are important, necessary bits of knowledge. (Thank Christ I have a partner.) I’m not a business major. (Surprise!) What I’ve learned about starting a company, I’ve picked up as I’ve gone along. The bad news is that this process can be incredibly daunting—my partner and I have lost countless hours of sleep fretting over whether we’ve fucked this or that thing up. The good news is that if a hapless dude like me can do it, so can you. And so here are some pointers for joining the ranks of Steve Jobs, Donald Drumpf, and your pedophile uncle who runs his own bodyshop.
You Do You
Presumably, you’re starting a business because you have a talent—welding, hand jobs, graphic design. (Note: If your talent is starting businesses, then you do not have a talent. You are what’s known as a grifter.) If you’re good at building handmade dioramas depicting scenes from Charles Dickens novels, then chances are you ain’t so great at accounting; even if you are, your time is better spent crocheting Miss Havisham’s finery. Stick to what you know. Find a good accountant; chances are they can balance your books in just a day or two a month. HR, software development, even personal assistants—all of these things can be outsourced affordably. The most important of these, which also happens to be the most expensive, is …
Lawyers: they’re not just for defending murderous athletes anymore! Starting a company is like walking through a haunted mansion in the dark: you can’t see where you’re going, and it feels like there’s always something lurking around every corner, waiting to pounce. Lawyers are your metaphorical flashlight. They can’t walk through the mansion for you, but they can show you where the trap doors are. And in any given contract, there are lots of trap doors—niggling bits of legal parlance that if you’re not careful can have huge implications for your business.
Of course, lawyers cost money. Lots of money. If there’s a lawyer out there among your friends or family—even if they’re a lowly tax attorney or entry-level associate at some conglomerate—chances are they can answer a lot of your basic legal questions, of which you will have many. Try to find yourself one of those people, and ply them with expensive scotch. (I used to wonder where my friend/lawyer got all his fancy booze; now I know.) There will also be times when your legal issue will test the limits of said friend’s benevolence, at which point I suggest paying for the appropriate counsel. Peace of mind doesn’t come cheap, but in the Crimson Peak that is running a business, it’s worth every penny.
Read The Fine Print
This is related to the lawyer thing, but worth noting on its own: As a business owner, you are no longer exempt from reading or even skimming legal documents. Parse that shit. You can take my word for it, or you can wait for some ridiculous sum to be extracted from one of your checks by a client with better lawyers than you who added some clause you overlooked because you transposed certain words that made it seem harmless, and now it’s essentially carved in stone, and FUCK! I really wish we could do that one over.
Trust Me, You’re A Startup
No matter what your business does, tell everyone it’s a startup. Like “codependent” and “must-see TV,” the term “startup” used to connote something, maybe. These days it’s functionally meaningless, but nevertheless a dog whistle for a certain sector of the business community, conveying that your company possesses some nebulous gravitas and a basic familiarity with Twitter. After all, would you rather be the cofounder of a burger chain, or a hot new Fast-Casual Startup? The aforementioned business community would way rather work with the latter, and will do so, oftentimes for free, simply to get in your good graces on the off chance you’ll be the latest chump to do an IPO and make them rich. These dinguses never have to discover that your “startup” consists of you laying around in your pajamas talking to your pets in between soiling panties in preparation for shipment to red states. That can be our little secret.
Bias For Action
Say what you want about the Third Reich, but they obviously had some compelling literature. Ditto Amazon. I used to work with an absolutely sociopathic former “Amazonian,” and my suspicion is that the infamous New York Times thing on the company was spot-on: Darth Bezos & Co. have built a dystopian hellscape of capitalistic rigor. They’ve done this in part by drilling a set of “Leadership Principles” into their highly paid stormtroopers. “Think Big” ... “Earn Trust” ... “Be Curious” ... many of these are things you’d teach kindergartners, and only require repeating if you hire people who misplaced their humanity around the time they took their SATs. But one principle that is both less obvious and more useful is “Bias for Action.” You’re not always going to have all the information, and not every decision you make will be the right one. Accept this, and take action anyway. It’s better to make 100 decisions, 10 of which were wrong, than to have only made 10 decisions. The sociopathic former Amazonian actually said that to me once, and it comes in handy. Fuck that guy, though.
Fight For Your Soul
Your business has a soul, just like you (one hopes), and you must fight for it. Once you have the basic infrastructure of your artisanal candle emporium in place, there will be countless opportunities to compromise. There’s no law that says you can’t sell sandalwood incense and conflict diamonds at your shop, no provision that states you can’t design concert posters and Drumpf propaganda. Once you put that open sign in the window, commerce becomes your own personal playground. Opportunities will arise, and you must assess their value not just on the potential financial gain (though many will do just that), but also in terms of their impact on your business’ soul.
This applies to both internal and external opportunities. When it comes to accounting, employee benefits, or whether or not to stock the fridge with sodas and beer or nothing but cheap condiments, you get to decide what kind of soul you want your business to have. You should be frugal but not a cheapskate, shrewd but not a dick, selfish but not adversarial. Entrepreneurship is hard, but so is life in general, and if you lose sight of that because you’re so focused on the bottom line—if you end up building the same kind of corporate hellscape you started this whole thing to escape to begin with—then you’re missing the whole damn point. Your business may not be a person (eat it, Scalia), but you should still raise it responsibly and sensibly. That’s the kind of hokum you’d teach a kindergartner, but trust me, these things can be easy to forget.