Gloria Barasa: Balancing my baby with my startup
It was my last day at work and the first day of the next phase of my life. I had decided to become a full time entrepreneur and solely focus on building my own business. My 10-month-old baby daughter would be my constant companion since my nanny was going away on leave at that time. This meant that it would take me longer than expected to get my business up and running. Several weeks later, I now realize that setting up a business is a gradual process that requires time and dedication. Things also don’t always go as planned. Here is what I have learnt from my journey: Have short, medium and long term goals Dividing your goals into these categories will help you to focus while managing your time effectively. A popular acronym developed by George T. Doran is S.M.A.R.T. This means that all goals should be Specific, Measurable, Achievable, Relevant and Timely. Practising this approach can be beneficial if adopted at the initial stages of business development. Overlooking any of the criteria could hamper progress and create frustration. I, for example, wanted to have my company up and running in two weeks. However, this was not possible given my home situation. I was able to adjust accordingly and establish my company within a more realistic time frame. In taking this approach, I quickly learnt that focusing on gaining a large customer base and revenue without fully building and understanding my business model would not work. Adapt quickly According to Martin Reeves and Mike Deimler in their Harvard Business Review article, Adaptability: The New Competitive Advantage, a company must have its antennae tuned to signals of change from the external environment, decode them, and quickly act to refine or reinvent its business model, and even reshape the information landscape of its industry. Going into the same industry as my previous employer, I initially believed that developing a similar work structure would lead to business success. However, I realized that this approach would not be ideal given the lack of human and financial capital on my end. I chose to adopt the most relevant aspects for my business such as customer relations. I opted to take a different approach on other aspects such as marketing. Goals are moving targets Business goals are moving targets. You can’t afford to get comfortable as this leads to stagnation. It is important to be open to providing current market needs. Keep abreast of the happenings in your industry as well as related industries. This can be done through reading business journals and articles, attending conferences with industry peers, or simply carrying out research to understand the latest developments in the market. As an entrepreneur you need to keep up with the ever-changing market needs. Enjoy the ride Make the most of your experiences. Learn from each of them. Don’t be consumed by the business, however, as this will result in stress. In order to avoid frustration devise various coping mechanisms. According to Forbes magazine, this could be as simple as scheduling breaks throughout the day or focusing on other interests that are unrelated to your business. Most importantly, appreciate your family in this moment. In my case, being with my baby daughter was the best stress reliever I had and probably will ever have. At the end of the day, my nanny being away turned out to be a blessing in disguise.
5 legal issues startups should think about within 6 months
Developing a new idea, creating a website and customers are all the exciting things about building a startup but dealing legal issues will never be on a founder’s top ten list. Unfortunately, a strong legal foundation is necessary in order to build a growth company and not taking care of these important issues can keep you from getting investment or expanding down the line. Here are five things all founders should pay attention to within the first six months of starting their business to ensure it’s off to the right start. Co-founders Key Takeaway: Be sure to draft a founders’ agreement early on and without emotion. Allocation of company ownership is important. It is also vital to address what happens if one founder departs. It is not uncommon for pre-incorporation founders to fall off the map before the startup becomes profitable. Deadbeat co-founders may also show up to claim profits if the startup takes off. You therefore need a clear strategy on how to handle this. Founders should also clarify what their duties are to current and former employers. If the idea for a startup was developed or worked on while an entrepreneur was employed by another business, there may be specific legal issues to consider. Lawyers Key Takeaway: Retain appropriate legal counsel as soon as possible or utilize open sourced legal documents for the early stages. Focusing on legal issues early is key, and is especially helpful for new entrepreneurs. However, do not give your lawyers equity and do not use your investors’ lawyers. Also, remember that violation of privacy, securities or tax laws can lead to criminal liability so it is imperative that startups have proper policies in place and carefully adhere to them. Don’t have the funds to hire a full time lawyer? Check out the Founder Institute’s open source agreements that can serve as a good start for standard legal agreements. Intellectual Property Key Takeaway: Founders should implement an intellectual property strategy to monitor the use and disclosure of their intellectual property. Protect your startup’s name. It could be one of the company’s most valuable assets. Many startups operate under the mistaken assumption that a corporate name reservation is the only thing they need to protect their business name. Remember that you also have to register the name globally as a trademark. One of the most common pitfalls that entrepreneurs fall into is the exposure of their intellectual property by communicating confidential information to various people without non-disclosure agreements and other safeguards, or the use of inadequate non-disclosure agreements. Non-disclosure agreements should be drafted with the particular circumstances of the disclosure in mind and ought not to be treated as a basic boiler-plate document. Consultants/Employees Key Takeaway: Draft formal agreements for all consultants and employees so the terms of service and confidentiality requirements are clear. It is vital to enter into a written consulting agreement with such contractors. Intellectual property developed by an independent contractor will typically belong to the independent contractor in the absence of a clause in a contract to the contrary. It is also important to familiarise yourself with the employee laws of the city, state or country in which you setup. The most common employment law violations are misclassifying an employee as an independent contractor and/or failing to pay an employee appropriately. Licensing and Incorporation Key Takeaway: Know what the important license conditions are for your city and country and ensure that they are are not being violated in the course of your business. Set up a corporation or LLC for everything but a short-term business whose existence will be numbered in months rather than in years. Only raise funds from “accredited investors” and do not pay commissions for fundraising unless it is to a registered broker-dealer. Additionally, in most countries, running any kind of business requires several licenses, some of which might be simple tax registrations or trade licenses. Failure to comply with licensing norms leads to fines, costly legal suits and even business shutdown.