If you’ve decided to try your hand at running a start-up, you’re brave. It takes a lot of guts to make a go of it on your own. But you’re not alone. Over seven million people make the leap and start their own business each year. That’s a lot of new businesses!
One of the fastest growing sectors of new companies are tech start-ups, where we’re seeing more and more women in charge. While the numbers right now aren‘t great – currently fewer than five percent of tech start-ups are run by women – that number is climbing rapidly.
If you’re a woman thinking of becoming one of these pioneering tech bosses, kudos to you! But that doesn’t mean you can go out there without knowing what needs to be done. Once you decide to get into entrepreneurship, you need to assemble a Start-Up Checklist.
It’s every minor thing a woman must do if she is thinking of starting her own company. It’s easy to remember the Big Stuff: get an idea, get an office, get a loan. (Well, maybe not so easy. )
But what about the intangibles that aren’t required by law? Those are the ones that entrepreneurs sadly overlook quite often. And it’s easy to do because you don’t often read about them.
Unless they’re on your checklist!
So what are these things that need to go on this list?
One of the most important decisions an entity can make is deciding how their company will be structured. Will you be an LLC? A corporation? Perhaps a partnership? Whichever one you pick, it will have serious consequences, both for how your business runs and how it is taxed.
Once it’s decided, then you need to draw up your governing document. For an LLC, this is called an OA. For a corporation, it’s called your bylaws. They’re essentially the laws of your company. And they are a necessity if you want to protect yourself.
Picking the best structure for your needs can be the difference between glory and ignominy. Once you organize, you need to get everything down in writing. Especially from your employees.
A non-disclosure agreement, colloquially known as an NDA, is possibly the most overlooked document that every start-up needs and so few have. It can save your company from losing what is often its most important aspects: that is, its ideas.
An NDA assures that employees can’t spill the beans concerning trade secrets and other sensitive information. But more than just making sure everyone keeps their trap shut, NDAs ensure that in the event that your intellectual property does get out there, you can be compensated for the damages. Otherwise, you might be left with a super unique, money making idea that everyone else has now too.
Employee handbooks don’t just tell employees what the policy is for replacing the yogurt in the company fridge. Employee handbooks act as a way of ensuring there is zero confusion over what employees are allowed to do and what they are not. It clears the air concerning the rules and regulations in the business. And this can be invaluable if an employee ever sues you.
The shift to using independent contractors is a trend that’s been sweeping the tech world for some time now. But the line between an employee and an independent contractor is often a thin one indeed. It’s not uncommon for workers classified as independent contractors to sue for the rights normally given to employees. If you haven’t had a worker sign something detailing what the arrangement is, you could be on the hook for providing all the perks to a contractor that an employee gets.
If you haven’t noticed, a lot of these tasks are in place to protect an entrepreneur from going into the courtroom. It’s because that’s the one thing start-ups never dream could happen but often does: legal trouble. Protecting yourself starts with getting it in writing. Of course there are a million things that a new entrepreneur needs to do before they reach success. But this checklist should help you have a smoother ride on the way there.
So, you want to start a business. Maybe it’s a bakery, a line of eco-friendly workout clothes, or a dance studio. Whatever it is, you’re excited to bring your vision to life. But before you can share your expertise with the world, you have to become an expert at the rules of business. As a baker, clothing designer or dancer, this is quite possibly the last thing you want to do. Tax codes, contracts, and complex paperwork stand in your way and distract you from your plan. This, of course, deters many aspiring entrepreneurs (I know it’s slowed me down a time or two). But in a country that touts the promise of the American Dream and the importance of pulling yourself up by the bootstraps, why isn’t starting a start-up a lot easier?
Jen Reuting asked herself this very question after working as a secretary for investment bankers during college. She was only 17 when her employers at the time embezzled the company funds, fled the country and left her with an empty office building and a reaffirmed interest in entrepreneurship. Instead of focusing on her classes at the University of Nevada at Las Vegas, she used her scholarship checks and the empty office space she had inherited to start her first company, InCorp.com. InCorp.com provides registered agent services and Jen’s first challenge was to get some clients. To do this, she started a direct mailing campaign to the presidents of local companies offering them free services for a year. A true hustler, Jen didn’t let the fact that she was only 17 and had never owned a business before stop her: “I was 17 going on 30. I lied about my age, wore suits... I had nothing to lose.” Besides, she figured that if someone was biased just because of her age or gender she didn’t want to do business with them anyway. Smart girl. Some were skeptical at first, including her employees, but they saw how passionate she was and soon she was on her way. Today InCorp.com is the third largest registered agent service provider in the U.S., with over 100,000 users, including some Fortune 500 companies.
Great story, right? Well, it gets even better. InCorp.com was just the first business Jen started. Next was MyLLC.com, which specializes in helping entrepreneurs form and manage LLC’s (God bless her.) But, wait. Why would someone who is doing so well with one business shift gears completely? Well, it goes back to the question, “Why is starting a business so complicated and how can we make it more simple?” Jen recognized all the barriers to entry in the business world and felt that she could change the game: “I wanted to change the info space and make it easier for small businesses.”
Jen didn’t go to law school and knew how difficult it could be to understand the legal aspects of entrepreneurship firsthand. There had to be a way that this complicated process could be explained in plain English to the average person. She spoke with some lawyer friends to try to learn the ins and outs, and while she picked up a lot of legal knowhow from them, she also learned that law school doesn’t teach you anything about business law and contracts. Another huge disconnect. Wisely, Jen realized that she had to start another new company. “I didn’t want to shift the brand and alienate my current clients. But I was getting really passionate about helping small businesses.”
In her first few years running InCorp.com and MyLLC.com, Jen was able to interact with these up-and-coming business owners and saw that there was a huge need for her services. One client had just inherited some money from his mother who had passed. Understandably, he was scared to lose what his mother had left behind for him, but he had a dream of owning his own limo company, “I helped him get incorporated and told him ‘Just go for it. You’ll be fine.’” Six years later she says she sees his limos all over LA and Phoenix, and is happy that she was able to help him expand and become profitable.
Jen has helped many people take their big dreams and turn them into big business, including a few dummies. In 2007, she authored the 400 page nationwide best seller, “Limited Liability Companies for Dummies,” part of the well-known “For Dummies” series. For Jen, writing the book was just another way to provide tools to would-be business owners. “There is a lot of fluff out there, not a lot of hard facts and info. Writing this book was really rewarding.”
You would think that with two very successful companies and a bestseller under her stilettos Jen would be done. Nope. Last month she launched DocRun.com, an online software solution which generates customized legal documents for entrepreneurs. The company’s mission? To lower the barrier of entry to the small business market for entrepreneurs, providing them with easy access to affordable, attorney-level documents. Basically, it takes the crapshoot out of creating contracts and documents when you have no idea what you are doing and have no money to hire someone who does. “Lawyers don’t own the law, the people own the law. But this fear has developed. This is part of the reason I’m so passionate about DocRun.com.” (Startups everywhere rejoice!) And people are buzzing about this unique concept for a business. In testing alone, users were excited and loved the problem solving aspects of the software. “This will save people from having a lawyer charge them $5,000 to create an operating agreement by doing find/replace in a Word doc,” Jen says. The best part about the concept is the customizable aspect; the service is automated and puts everything together for you. “Most lawyers can’t keep 50 states laws in their heads but DocRun can.” That, my friend, is an “ah ha!” moment.
Is Jen Reuting ushering in a new era of entrepreneurship? Will the bakers, clothing designers, dancers and dreamers of the world soon be able to quickly and easily get past the legal jargon and red tape that clouds the business world? She seems to think so. “After the economy collapsed and more and more people were getting laid off, they weren’t going on welfare. They were starting their own businesses. This is the age of the entrepreneur.” The beauty of it all is that Jen has made money and become incredibly successful by helping others pursue their dreams. “As long as I’m capable of creating something of value it's my responsibility to do so,” Jen says. Made woman? I think so.