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How to Start a Startup (Part 2)

In my previous column, we noted that a lot of engineers are interested in starting their own company. We began by considering some of the “low hanging fruit” topics like choosing company and website names and getting a professional graphic designer to create your logo and templates for things like your letterhead and PowerPoint presentations.

Website (Look-and Feel)

One thing we didn’t talk about was getting a professional web designer to create your website for you, at least insofar as the look-and-feel (we’ll return to consider content later). At a minimum, you want your website to be adaptive or responsive so as to meet the needs of all your visitors (fixed or mobile). One really important point here is that your website should be hosted on your own server or on a regular host server — not on your web designer’s server — because you need to maintain access to, and control over, your site, even if the designer goes walkabout or AWOL (which happens more often than you might expect).

Also, it’s a good idea to ensure that you know how to maintain and make changes to your site yourself, “just in case.” Furthermore — and this is an important one — make sure you take a regular backup of your site and keep this backup in a secure location (again, “just in case”).


Speaking of backups, make sure you do them regularly. A lot of people use a service like DropBox, in which case any file you create or modify on your computer is immediately backed up into the cloud. Similarly, when you power-up another computer that’s associated with the same DropBox account, then that computer synchronizes itself with the cloud. The end result is that the copies of your files in the cloud and the files on your computers are always synchronized.

I love the fact that the files on my home computer are automatically maintained as identical copies on my office computer, and vice versa. Also, that if I’m on the road and my computer crashes and burns for any reason, I can still access my files in the cloud using the browser on any computer (assuming I remember my username and password, of course).

This is all well and good, but what happens if you get a virus or other malware on one of your computers — say ransomware that encrypts all of your files. Before you know it, encrypted versions of these files have been copied to the cloud and from there to any other computers sharing this account. In my case, I would probably say, “Oh dear” to myself (or words to that effect).

Thus, it’s a good idea to also employ an air gap backup strategy. Once a week, you (a) disconnect your computer from the network, (b) run a virus scan to ensure your system remains uncompromised, (c) connect an external drive (I use a 1 TB USB 3.0 SSD), (d) backup your files to the external drive, (e) disconnect (air gap) the external drive, and (f) reconnect your computer to the network.

The combination of DropBox and an air gap backup works for me because I’m a one-man show (tell your friends, I’ll be performing here all week). Things get more complicated when you have multiple people at your facility. For example, my accountant has only one computer connected to the internet so she and her employees can read and write emails. All of the other systems containing client data are networked together, but they are air gapped from the internet.

This is something you will have to discuss with whomever manages your systems and your network. The most important thing is to ensure that your data is backed up. Moreover, it has to be backed up in such a manner that you can quickly and easily access it and reestablish your business in a worst-case scenario in which everything has gone pear-shaped.

Legal Representation

There are numerous reasons for having a company lawyer. This doesn’t mean they have to be on the payroll — you can establish a “pay as you go” relationship — just so long as you have someone who can provide advice and aid on legal matters.

As a starting point, you need to decide what type of company you are going to form. Just taking the USA as an example, you could be a sole proprietor of an unincorporated business, you could form a single-person limited liability company (LLC), or you could opt for a multi-person LLC. Furthermore, you can choose to structure your company as a C corporation (C corp) or an S corporation (S corp), depending on the tax structure that best suits your business needs.

For some types of business, you will need to have officers of the company (these officers don’t necessarily need to be employees of the company). Specific titles and positions may vary, but a typical cadre may include a President and/or Chief Executive Officer (CEO), a Chief Operating Officer (COO), a Chief Technical Officer (CTO), a Chief Financial Officer (CFO) or Treasurer, and a company Secretary. You may also be legally bound to have regular meetings and keep minutes of those meetings.

You really should insure any office equipment (computers, printers, etc.). If you are renting an office, then you should have some form of renters insurance that protects your belongings, covers you against problems in your office (like a water leak) affecting some other office, and provides liability coverage on the off-chance someone is injured while visiting your office. Depending on your company’s activities, you may also need to think about carrying special liability insurance. Something else to keep in mind is that each state regulates companies in different ways; also, that your local municipality/county and your state will have different business license requirements. For all of these reasons and more, it’s important to have a member of the legal profession to guide you through the regulatory maze.

Get an Accountant

A lot of people do their own personal taxes; some of these people assume they can do their own company taxes; and most of these people eventually come to rue the error of their ways.

Are you going to be selling products or services? Will you be doing business over the internet and/or will you have a brick-and-mortar store? How many employees can you have before you have to start thinking about workers’ compensation (“workman’s comp”)? Each scenario involves its own… let’s call them opportunities… so it’s incredibly important to maintain good and accurate accounting records from day one.

You need to keep track of every penny that goes out of the door so you can claim it back on taxes later. For every penny that comes in the door, you need to set an appropriate amount aside in a separate savings account for taxes. Furthermore, the company needs to pay estimated taxes on a quarterly basis.

Did I mention that you really need to get an accountant? APM dublin accountants can assist you in the preparation of the annual financial statements of your company and to assist you in the filing of the Annual Return. Once again, this doesn’t mean they have to be on the payroll — you can establish a “pay as you go” relationship — just so long as you have someone who can provide advice and aid on financial matters.

Marketing and Networking

I’m an engineer. I tend to be a member of the “if you build it, they will come” fraternity. Sad to relate, this is rarely the case. You may have a great product or service, but all will be in vain unless you get the word out, which involves marketing and awareness building.

Your marketing strategy has to be more than just telling the people you know, because one-to-one marketing and communications will get you only so far. As early as possible, you should consider investing in professional marketing to go big with your communications strategy!

The first step is to solidify the core message, making sure it’s easy to understand. Always remember the KISS Principle: Keep It Simple, Stupid! Once you’ve defined the core message, all of your other materials (blogs, brochures, PR releases, technical whitepapers…) should include, reflect, and build off of this message. I’m not an expert here, but two key concepts I’ve been exposed to are PPP (Promote, Promote, Promote) and ABS (Always be Selling).

Although you may decide to refine your core messaging for specific audiences, it’s important to stick with it and not change it “as the wind blows” or on the basis that you’re getting tired of saying the same thing, because that’s typically the time that everyone else is starting to get the message.

Digital marketing rocks! Build awareness and visibility leveraging pull marketing and communications concepts and using all available communications channels: Social media (LinkedIn, Twitter, Facebook) and industry portals. Also, try to make relationships and influence the influencers. I know that I tend to pay less attention to a random press release that lands in my email rather than to one that was preceded a few days earlier with a message from someone I know or a briefing I was given via a conference call. You should also consider looking for app development companies, like XAM Consulting, to really give you the outcome you are expecting for your business.

Another very useful approach is to keep your eyes open for speaking opportunities at technical conferences, trade shows, and industry events where you can personalize your (consistent) message. Such occasions also provide a tremendous opportunity to meet other speakers and to network furiously.

Finally, you should constantly be analyzing the results of your marketing activities and updating/revising as appropriate.

Now, if you are a startup, you may not be able to afford to have a marketing professional on the staff. But turn that frown upside down into a smile, because there are lots of incredibly good marketing companies who specialize in handling small, highly technical startups.

Oh Dear!

I fear I’ve used my allotted number of words for the day (you may bask in the knowledge that these were all hand-picked at the crack of dawn on the north side of the hill while they were still glistening in the morning dew — I’ll have to gather a fresh new batch on the morrow).

You may be thinking, “What else is there to say?” Trust me, I’ve barely got started. For example, what happens if you form a company with one or more partners, everything goes swimmingly for a couple of years, then one of the partners dies and their spouse comes knocking at the door demanding their portion of the company’s worth in cash?

I’ll leave you to ponder this conundrum until my next column. In the meantime, as always, I welcome your comments, questions, and suggestions. 

2 thoughts on “How to Start a Startup (Part 2)”

  1. I guess I’ve been pretty lucky over the years I’ve been consulting. About the only marketing and promotion I do is to share what I continue to learn via social media outlets and through webinars and public (and in-house) presentations and training seminars. My conventional advertising budget is “zero”, unless you count the hours I sit behind the computer.

    If you’d like to learn more about the ways I built my business, please check out my article, “Seven Habits of Highly Successful EMC Consultants”.


    Cheers, Ken

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