The Ins and Outs of Incorporating- What a Startup Needs to Know about Getting Organized

Incorporating your business is obviously not a step to take lightly, and if you’re already on your way to doing it, no doubt you’ve done plenty of research.  Despite the fact that it requires extra paperwork and in some cases, more tax liability, incorporation can be a great choice for many businesses for several reasons.  A corporation can continue on after the death of its owners, transferring shares is fairly simple, and it makes attracting new investors far easier, which is great news for startups.  As owner of a corporation, you’re protected from personal liability from company debts and obligations.

Once you’ve decided to incorporate your company, how do you get started? Your first step should be to check with your state’s corporate filing office to make sure the name you want to use for your company isn’t already claimed.

Then you’ll need to request forms, schedules and fee information from the secretary of state, or the office responsible for registering corporations in your state.  You may not have to contact an attorney to help you at all if you have a good guide to incorporating in your state; you can also use one of the many incorporation services that will prepare and file the documents for you.  The registration fee for these documents is usually between $200 and $1,000, depending on where you live.

You’ll also need to prepare your ‘corporate bylaws’ (these don’t get filed).  They essentially outline corporate housekeeping details like when your shareholder meetings will be held, who can vote in them and how shareholders will be notified if there is any need for other meetings.

The entire process is remarkably simple if you don’t plan on selling shares of your corporation to the public.  The biggest changes in your day-to-day business operations will likely just be related to secretarial tasks like recording important business decisions, as well as holding annual meetings.  Accurate financial records are key – you must be able to show a separation between the corporation’s income and expenses and those of yourself and any other owners.  And, all references to your business should identify it as a corporation using Inc. or Corp., whatever your state mandates.

Of course, it’s important to be familiar with and follow your state laws for incorporation.  If you don’t, the courts can ‘pierce the corporate veil’ and hold you personally liable for your business debts, which goes against the whole reason for incorporating in the first place.

Learn about your state’s requirements at USA.gov

Photo credit: Flickr user llawliet

7 Tech Companies That Started In a Garage, Dorm Room, or Home Office

When companies first start out, it might seem like big success is a million miles away. You’re plugging away every day in some humble location, be it your home office, dorm room, garage or parents’ basement. The idea of becoming a successful business may seem like nothing but a dream at this point, but it’s what drives you. It’s also closer than you think, if you work hard enough. Here are 7 examples of companies that started in places that didn’t exactly foretell the prosperity that the owners would later enjoy.

Hewlett Packard – Every year, a humble wooden garage in Palo Alto, California is visited by 40,000 people paying homage to the birthplace of Hewlett Packard. It contains the original drill press that Bill Hewlett and David Packard used for 20 years and has a single light bulb hanging from the ceiling. It all started way back in 1938, when Hewlett and Packard began making an oscillator to test sound equipment. The low cost of operating here helped them undercut their competition and rise to the top of the budding industry.

Google – It’s well known that this multi-billion-dollar company started in a college dorm room by then-students Larry Page and Sergey Brin. They clashed at first, but the gregarious Brin brought knowledge and assistance to the shy Page’s research project, ‘BackRub’, which explored the problem of figuring out which web pages linked to a given page. Their concept gave birth to the PageRank algorithm, which formed the basis of their new search engine platform. Google, Inc., was officially formed in 1997 at a friend’s garage in Menlo Park, California, and in just a few short years catapulted them to international renown and fame.

Apple – Steve Wozniak and Steve Jobs were a couple of computer dorks in school, so absorbed in mathematical problems that they barely registered the world outside. In 1975, Wozniak began attending meetings of the Homebrew Computer Club, which led him on a quest to design his own computer. 21-year-old Wozniak and 16-year-old Jobs assembled the Apple I and got a local computer store to agree to buy 50 of the machines for $500 each. From that income came the Apple II, of which millions were sold in the 1980’s. As they say, the rest is history, and Apple is now one of the world’s most successful computer companies.

Microsoft – When Paul Allen was on his way to visit friend and fellow hacker Bill Gates at his dorm room at Harvard University in 1974, he stopped and grabbed a copy of Popular Electronics, which featured the Altair 8080 microcomputer on the cover. It was just the inspiration they needed to get started on the project that would lead to the inception of Microsoft, Inc. Within days, the duo began working feverishly on a BASIC (a family of high-level programming languages) that could be used on the Altair, and 8 weeks later Allen flew to Micro Instrumentation and Telemetry Systems (MITS) to show off their creation. The demonstration was a success, and MITS bought the rights to their BASIC. Within a year, Gates dropped out of Harvard to form Microsoft.

Dell – In yet another example of great things rising from a humble dorm room, Dell founder Michael Dell first founded the company (in the form of PC’s Limited) as a student at the University of Texas at Austin in 1984. With just $1,000 in capital, Dell sold IBM-compatible computers built from stock components. He eventually dropped out of school to begin working full-time on his business with the help of $300,000 from family. By 1992, Dell was a Fortune 500 company.

Facebook – Yet another Harvard student (and later dropout), Mark Zuckerberg, began what would later make him a millionaire in his dorm room as a hobby. Originally called ‘thefacebook’, Zuckerberg’s project spread quickly across the dorms at Harvard and later extended to Stanford and Yale. Soon, two fellow Harvard students, Dustin Moskovitz and Chris Hughes, helped Zuckerberg bring Facebook to the next level. It is now one of the most prominent and successful social networks.

TechCrunch – This is a great example of a company still on its way up, and founder Michael Arrington – one of TIME Magazine’s Top 100 Builders & Titans of 2008 - still runs it out of his home to this day. TechCrunch is a group-run blog that profiles and reviews new Internet products and companies. Check out this video of Loren Feldman crashing at Arrington’s pad:

7 Books Every Entrepreneur Should Make Time to Read

Entrepreneurs just starting out receive a lot of conflicting information.  They might hear what sound like a few great tips from a friend, and then read the opposite on a business blog.  That’s where this list of books comes in – to give you plenty of solid advice that will help you get your career off the ground and make the right decisions.  Since entrepreneurs tend to eat, sleep and breathe business anyway, they’ll be perfect to tote along to the beach and other relaxing destinations as summer reading.  In no particular order, here are seven books every entrepreneur should make time to read.

The Art of the Start by Guy Kawasaki – If you only get around to reading one book, make it this one.  Kawasaki is a Silicon Valley venture capitalist who revolutionized the tech business with his ‘evangelism’ strategy, and he passes on his considerable knowledge in this must-read. The Art of the Start covers everything form identifying your customer base to building brand identity.

Purple Cow by Seth Godin – This is a great book for people who don’t love to read because it’s short and written in a conversational style.  It’s a guide to making your business stand out from the crowd.  At its core is the concept that taking a risk by offering a product or service that’s so useful, interesting, outrageous and note-worthy is what will ultimately lead to success for most business owners.  Godin backs up this idea with many mini case-studies.

Natural Capitalism by Paul Hawken – Learn how to be efficient and profitable while saving the environment and creating jobs with this book by three top strategists.  It’s an inspiring and visionary look at how business will thrive in the next century as entrepreneurs and corporations turn toward sustainability.  The concept of ‘natural capitalism’ is explored through four central strategies: radical resource productivity, biomimicry, service and flow economy and investment.  It’s a great guide for those who believe that thinking green now will lead to success in business as times continue to change.

The E-Myth Revisited by Michael Gerber – The E-Myth is the myth of the entrepreneur, and according to author and business consultant Michael Gerber, it’s defined by businesses assuming that understanding the technical details of what they do is the same as understanding how to run their business. Gerber outlines the worst business vices that most often cause businesses to fail, and explains how to avoid them.

Good to Great by Jim Collins – Author Jim Collins and his team of researchers set out to discover what makes businesses truly great, and found 11 companies that truly made substantial improvements over time.  The book examines the common thread that runs through these companies’ success – what he calls the “Hedgehog Concept”, a product or service that leads a company to outshine all of its competitors.

The 4-Hour Workweek by Timothy Ferriss – While it may sound at first like a typical scammy get-rich-quick guide, the 4-Hour Workweek is full of excellent, real-life tips that will help you make the most of your time.  It explains how automation, outsourcing and eliminating distractions can liberate you from the 9-5 grind and help you attain a mobile lifestyle that can aid you in your quest to be successful in business.

Small Giants by Bo Burlingham – Burlingham examines businesses, from microbreweries to musician’s private record labels, that have managed to achieve great success in business without becoming corporate giants. 14 small businesses are profiled, and Burlingham explains how they were able to stay true to their original visions without selling out.  It’s a great guide for those who want to build their passions into successful businesses.

STARTUPS | Honing the Elevator Pitch: The Art of Who You Are in 30 Seconds

We’ve all heard the old adage, “you only get one chance to make a first impression”. That’s even more true in business, where sometimes you get less than a minute to explain to a potential customer, supplier, investor or other contact who you are and what you’re about. Making a concise, memorable ‘elevator pitch’ is an art that can help you advance your business. Here’s how to grab that prospect and make them believe in you in 60 seconds or less.

When thinking about what your elevator pitch will consist of, there are a few things to keep in mind. First, ditch the technical terms – it’s a good way to lose someone’s attention if they’re not totally up to speed on the intricacies your industry.

Think about what you’re trying to get out of an elevator pitch and craft it accordingly – do you want to make a sale, make an important contact or get a referral? If you have different goals depending on who you’re talking to, you may want to write up several versions.

Make sure that you’re offering something attractive. Your pitch should be the answer to a problem your listener has – maybe your product or service will make them money or otherwise help them in their own endeavors. If you’re talking to a potential investor, make sure to mention their return on investment and how much funding you’re looking for.

Show, don’t tell. If you have a story that illustrates the value of your product or service and how it stands out from the crowd (and you can tell it succinctly), you’ve got a winner.

Don’t use elevator pitches as an opportunity to hard sell. You don’t want anyone to feel like you’ve cornered them and pulled out your Amway catalog. If the person you’re talking to has a deer-in-the-headlights look while you’re talking, you’re probably trying too hard. Tone it down. Keep it casual.

Memorize your pitch and try it out on friends, family or associates. It’s super important not to sound like a robot, though – instill confidence, passion and personality into it. If you tonelessly drone on with a glazed-over look in your eye that betrays the fact that you’re trying to remember all the words, you’re going to come across as insincere.

If you’re still at a loss, and just can’t seem to formulate a pitch that really resonates, get some guidance from Guy Kawasaki’s book, Selling the Dream. Guy, a Silicon Valley venture capitalist, is noted for being an expert on selling one’s business and brought the concept of ‘evangelism’ to the high-tech industry. He’s so well known, in fact, that this is what happens when he gets in an elevator with a bunch of entrepreneurs:

Elevator Pitching Guy Kawasaki from Andrew on Vimeo.

Perhaps the most extreme elevator pitch is the ‘twitpitch’, wherein an elevator pitch is narrowed down to 140 characters or less to be broadcast to an audience via microblogging site Twitter. Created by Stowe Boyd, a business strategy and information technology consultant, twitpitches are a great way to put social media to work. To do it yourself, just tweet as normal but add #twitpitch to the end of your post instead of twittering at (“@”) someone. Check out the latest ones at Hashtags.