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20 Things You Should Not Do Before Starting Your Business

Inventor Advice

Business Opportunities says "Too often, many would-be entrepreneurs spend all of their time planning their corporate structure, getting all of the necessary permits, licenses, bank accounts, and doing all of the other minutiae of business before they actually figure out whether or not they actually have a product or service that someone will pay for." I completely agree.

It's very important to focus first on the product and making sure it is feasible and marketable before you go about ordering office furniture.

Dane has a list of the 20 things not to do before starting a business:

Don’t incorporate. Seventy five percent of all businesses are sole proprietorships, and they already make money.

Don’t get a bank account. Your personal banking account will work just fine if someone wants to write you a check, or if you need to pay for something.

Don’t rent an office. Work from home. It won’t require a first, last and security deposit. Plus, it’s tax deductible.

Don’t hire anyone. Don’t hire someone if you can do it yourself. For everything else, use contractors and give them 1099.

Don’t get a business telephone number or mailing address. You have a cellphone, use it. If someone needs to mail you something, have them send it to your house. You’re working there, remember.

Don’t buy any equipment. Outsource everything. Fedex Kinkos can handle all of your printing, and instead of splurging on a postal meter head down the post office. Need something big? Rent it! If it’s not something you can rent by the day, maybe there’s another local business with one. Can you rent it during their off hours in the middle of the night?

Don’t write a business plan. Sure you need to know what you’re going to do and how you’re going to make money, but don’t waste time formatting it into a structured plan.

There some on the list i don't think I agree with but it's an interesting list and a good way to ask yourself whether what you are doing really is important to the success of your new business or merely diversionary.

Take a look at his full list and please let me know if there are any on that list that you don't agree with and why.

Michelle
Featured Blogger
InventorSpot.com

Comments
Nov 18, 2007
by Myra Per-Lee

I agree with most...

...of these suggestions. But not having a structured business plan? If structured means setting long range and intermediate goals, you MUST have a structured business plan.

Myra Per-Lee

Nov 18, 2007
by AmericanCynic

Inappropriate advice

It may be all good and well before you start a business, but the moment you start one, all of this becomes bad advice. Incorporation isn't really to increase profit, it's to reduce personal liability. If you don't have a business bank account or a business plan, most banks won't give you a loan or a line of credit. A cell phone can get awfully expensive to run if you're using it for business all the time. Most of the comments on that blog have been negative, and deservedly so.

Nov 19, 2007
by CriterionD
CriterionD's picture

Can't agree either

I've seen the article before.  I agree that you shouldn't invest so much money into a business before you have good reason to be confident that what you are doing is worthwile, but the advice here is very much misconstrued.

 Just to begin to address some of the points listed above and not all of the points in the article - a business plan?  Not only  one of the first things you want to do when starting a business, but its something that forces you to hammer out all of the details so you can come to a conclusion that your venture can be profitable.

 Don't incorporate?  You don't need to.  But incorporating requires a very minimal investment - I'm pretty sure less than $100 in any state - and can only increase your credibility in the eyes of potential clients.  Depending on where you incorporate, you can even gain tax benefits as well, which can more than pay for the cost of incorporation.  And, incorporation also gives you the ability to develop corporate credit as well, which can only be a good thing.

 Don't get a telephone number or mailing address?  Many people can add a line to their cellular account for $9.99/mo.  A PO Box is very cheap as well, and both investments can easily increase your credibility.  Even if you are at a point where you have not proven to yourself that you have something marketable, at least give yourself a chance.

 Don't buy any equipment???  This is laughable to me.  FedEx/Kinko's is very expensive in terms of printing and faxing.  If you don't already have a decent printer, or a scanner, you can buy this stuff for very cheap off of Craigslist.  Faxing?  You can find a fax machine for close to free off of Craigslist, or better yet, you can pay $5 per month and get a fax thru email account, and also gain a fax # which can be used to further enhance your company's credibility.  Yet, at FedEx/Kinko's, one average sized fax might cost close to $15.

 I would advise anybody - business owner or not - to buy their own equipment.  With the money they save, they can incorporate, pay for a separate phone and fax line, and reserve a PO Box.  With the time they save, they can put together a business plan. 

Nov 23, 2007
by DSlackman
DSlackman's picture

Liability

The importance of liability protection may depend on the nature of your product or service, but incorporating or setting up an LLC is not difficult and relatively inexpensive. I think it is worthwhile protection.

Mar 4, 2008
by Anonymous

knowledge and ability

In starting a business, you just need to discharge a lot of money, so not everything said in above can help in able to have a succesful business. Just do what you think is better to help your business grow. Maybe you will not have a guts to own a business if you don't have a sufficient knowledge on how to run a business.

Mar 27, 2008
by Anonymous

he

hello