Looking back on almost 5 years of full-time entrepreneurship, these are the first three critical startup partners I would suggest when getting started with a startup.
1. Significant Other
Your significant other is your first, most valuable, most influential and primary partner in your business, even if he isn’t working IN the business with you.
Fact: Your significant other can make or break your startup.
If your significant other (aka S.O.) isn’t fully on board with your startup, I can guarantee you a higher likelihood of failure OR worse, MISERY through your startup experience.
Lack of support from the key figure in your life just makes a hard job worse.
After all, you’re going to be working long hours. You might not have the income you thought you would to add to your household (or worse have to forgo your own check and lean on your S.O.). Your focus is going to be on getting your startup off the ground. You’re going to be responding to customers at all areas of the morning (or first thing after you wake up from bed on your iPhone). You’re going to get calls while you’re at dinner. You might not take a real vacation for a couple of years. And each and every day you’ll deal with what most people can’t tolerate — uncertainty.
Truth be told … you might handle it extremely well … but the odds are your significant other won’t.
Maybe you’re not married right now, but you have someone you love and are sharing your life with, regardless, that person is going to have a deep impact and influence on your success or failure.
This is why I suggest going on a retreat together BEFORE you start your business to align your work-life goals and dreams. Talk. Then talk, and then talk some more. Clarify and seek crystal clear clarity. Ask questions. Paraphrase what the other said and speak it back to make sure you are on the same page. Set expectations. Be realistic. And if it’s meant to be — seal the commitment to the business.
Talk about your work and your life and where you see it going. Make sure your significant other is keenly aware of the sacrifices involved. Don’t let them be surprised later when you’re not home for dinner, or get called out in the middle of the night, or have to answer the call of an important client.
Without the consistent support and encouragement of my wife, Lindsey, I couldn’t do half of what I do on a weekly basis (or 100% of it happily). In fact, her words of encouragement bolster me each and every day. She sees that what I do builds what WE want in life. From the start of our relationship, she’s fully engaged and supportive of the business. And knowing that, frees me to be and do what I need to for our business.
In a very real sense, you and your significant other will be having a startup baby together. Make sure your S.O. is OK with helping raise it — if even from the sidelines!
I say accountant, but what I mean is someone to help you with the financial aspect of your business – primarily managing cashflow and paying taxes.
You can hire an accountant to assist with year-end taxes, which I’d highly recommend, or even payroll, however I’d suggest using an online payroll service like PayCom (we do now) from Day 1.
If I could go back to Day 1 (or actually 30 days previous to that Day 1), I wish we would have retained an accountant or financial partner on a monthly basis, like we’re doing now with Rick Simpson of CFO Partners in OKC.
We employ these types of financial consultants to guide us, and I suggest doing the same, because if you’re like me and didn’t major in economics in college (and can barely balance a checkbook), then their primary purpose beyond getting the priority work done will be to consult and coach you to understand how the financial aspects of businesses work.
Cash is oxygen to your startup. If you don’t know how to properly manage the cash you have, you’re doomed. You’ll run out of money when you need it most. Insanely talented experts get going in their business, their clients are loving them, but they forget to invoice their clients, or worse, make sure those clients are paying on time. Then they can’t make payroll at the end of the month.
Imagine if your current paycheck didn’t get drafted automatically every month and was left to you invoicing your boss. They made it your responsibility to get paid. And trust me, they don’t mind if you bill late, or forget.
How would you feel if you really didn’t know if you had enough money in the bank (or whether or not your check was going to be in the mail) in order to pay for your mortgage, food, insurance or electricity?
So ask around and find an accountant who have an active and healthy roster of clients (and even better, those similar to you). Approach it like a job interview. Ask questions. Get references. Find out how they work with clients. Tell them your situation. AND most importantly, ensure they realize they are a partner in this startup with you … not merely a transactional client once a year around mid-April.
This means you can ask them questions like: What software do you use or recommend for finances? Where do you bank and why? How do similar clients handle invoicing their clients and the terms (15 days out or 90 days)? What’s a good practice for making distributions? How much should I pay myself? When do other clients pay their employees? And the best one of all … As a startup entrepreneur, what financial advice and tips do you have for me to ensure maximum success? (You’re admitting you’re a newbie and want to learn from their experience.)
If they are hesitant or can’t answer with good, actionable advice, find your keys fast and get out of there!
I admitted early on that financial management was NOT a strength and never would be, so I’ve consistently found people who enjoyed it, were trustworthy and knowledgeable to handle that aspect for me. (And it should go without saying, but yes, under my watchful eye. That’s called accountability.)
This doesn’t necessarily mean that you hand everything over to them. But at a minimum, approach this relationship as a trusted ADVISOR for one of the most critical aspects of your business — your money.
I wish from the start we would have had an attorney on a minimal monthly retainer to be able to ask questions as we grew, or help with crisises. (If you’re in business long enough and have even modest success, expect to have a large legal bulls-eye painted on your forehead.)
But primarily I say this because I highly suggest you hire an attorney to incorporate your business first and foremost. That’s not legal advice, it just feels like common sense to me as a businessperson.
Yes, I understand you are smart enough to figure it all out and file the paperwork with your state. Yes, I realize you can get something on Legal Zoom. But for me, I’d rather leave nothing to chance. I’d rather hire a professional, bar-certified attorney who deals with this regularly to walk me through it (and to do it for me).
This is the foundational document(s) that legitimizes you to the world — I’d get it right from the start!
I also recommend having a good relationship with an attorney so that when issues arise (and they will) you can pick up the phone and get some reassurance and guidance. We’ve had several attorneys (in fact one of my partners is one) and I can’t tell you how beneficial it’s been knowing there was someone with a legal background to bounce things off of and get perspective.
Ultimately, here’s why I say these are your FIRST three critical partners (not all of them by the way): You can’t do it alone. You need help. And by and large I’ve seen these three partners be the most vital and critical to the health of our startup.
You need to focus on what you do best … NOT what you don’t do best or what drains or distracts you from the most vital task at hand (getting paying customers to sustain your business).
Having support at home … someone to advise you on the finances … and to help guard against potential threats … help me sleep better at night and focus on getting our startup up to cruising altitude!