Pitch to the Gods

Transferring your business email to its own account.

2008-02-01T01:08:00.000-05:00

You were a good business owner and got yourself a domain when you started this wild ride known as running a business.

You've setup gmail to send emails out on behalf of your name at your domain a long time ago to present a professional image to the world. It works pretty well. Then one day you find a client can't send you emails.

Perhaps one that wants to pay you a lot of money, but wonders why you can't even get your email server straight. Or perhaps you sent one too many emails from your blah@gmail.com account or too many friends are emailing you @mycompanyemail. Whatever the issue is, you've decided to switch to the excellent Google Apps for My Domain and segregate your personal and business dealings a little.

First, sign up for GAFYD. Prove to them you own your domain if you didn't buy it from them.

I'm crossposting this on Pitch to the Gods and Rowdy Bytes. Pitch to the Gods is my blog about starting and running a business, in all its coolness and its surprising and frankly humbling difficulties. Rowdy Bytes is my recently renewed blog about technical things that I haven't seen elsewhere, or at least not prominently as I think they should be.

Now your next step, the switch over of the MX records, while arcane, is not a big deal. Almost equally importantly, you have to add a SPF record so mailservers don't start marking your mail as spam (which they may have already been doing if you didn't have a SPF record already). And no, I don't really know what either of those are, but I know they are important.

Next, you have to do something that should seem like it is simple. It isn't. That is, getting your email out of one gmail account into another.

At first blush you may say "Gmail has POP3! That surely will work". And you're right. It will. For exactly 200 messages. And it doesn't let you just get a folder's worth, oh no, you have to pull them ALL down. If you click edit settings then hit save settings, it will pull a second 200 down.

So with the 30756 messages I have in my gmail account, that would take a little bit of time. Then I have to filter it down to the ~1000 Rowdy Labs specific emails that I'm not interested in cleaning out at this juncture.

Turns out you have to get to your britches by way of your elbow here. The elbow being Windows Vista Mail and the elbow being my Rowdy Labs LLC Google Apps for Your Domain account.

This should work with any email client, but I'm giving you the steps for this particular client. First off: Create a new account. Use an imap server. Give it the login name you use with your personal gmail account. Hit save. Then, go rename it to "Personal Email". Then right click, go to properties, then set the thing to use secure authentication.

Do the same thing for the destination server, except call it "Work Email", and use the name@domain login you've already setup via Google Apps for Your Domain. Refresh the folders on both accounts.

Now this is very important. Turn off Junk mail filtering. Turn off phishing detection (Tools->Junk Email Options). These will try to filter mail you've already determined isn't junk when you are just copying stuff over. This is at worst annoying, at best, a good way to lose things that are really really important to your business (it caught a password email and a receipt payment for incorporation when I didn't follow this advice. Bad mail filter! Bad!)

Now go into each "Personal Email" folder (yes, your beautiful tags are called folders when viewed via IMAP), and copy the contents to a corresponding folder on the "Work" server. I made a new folder for each client and each lead source, then copied into each of them from a couple more monolithic tags in my personal email.

Depending on your messages, this will take awhile. It took 45 minutes to copy over my 1000 messages I cared about (and about 20 minutes to go through the remainder of the email I didn't delete before the move, but needed to transfer over).

Now go into your work email and setup some filters and liberally use the option that grabs the emails that are already there. You now have split your email. Work life balance will surely follow :o)

--Michael

Business Licensure in Atlanta

2008-01-29T17:53:00.000-05:00

A Business "license" is not actually a license.

It is actually a tax document stating to the city what your business is worth so they can send you a tax bill, and the thing people actually call a license is the recipt for payment of city taxes. The penalty for getting caught in GA without one is $500. Then again, a tax bill is a goodly portion of that....

Step 1: Print and fill this form out

Step 2: Drive to City Hall (55 Trinity Ave)

Step 3: Find the Business Tax Division (down the hall on the left in City Hall on the ground floor)

Step 4: Find the Zoning department and get them to sign the zoning portion of the form you filled out. The official will ask you some questions about where the business is located and and what type of building it is and what it is used for. Right now the zoning department is hiding in the back of the HVAC department on the right side of the second floor. Renovations I guess.

Step 5: Go back to the Business Tax Division. The official will give you a $75 bill to actually file for the permit, which you will then...

Step 6: Take to and pay at the Cashier, who is located at the center of the building. The cashier will give you a receipt, which you take to...

Step 7: The Business Tax Division, which will then type up something, then give you a temporary permit which is good until the 1st of March.

Step 8: Wait for your city tax bill in the mail.

Step 9: Pay city tax bill

Step 10: Get your real tax certificate in the mail.

--Michael

Reading List: The Illusions of Entrepreneurship

2008-01-10T15:53:00.001-05:00

I've been reading the book "The Illusions of Entrepreneurship" by Scott A. Shane. He is a professor at Case Western who academically studies the process and occurrence of Entrepreneurship and wrote the book because he was tired of hearing about all the popular misconceptions that abound in the echo chamber of the pop-business bookshelf and on the web and in the media.

Each chapter centers on a couple unrelated facts about what is the fact about entrepreneurship, and what is the fiction. Examples of facts that are true but go against popular conceptions:

Americans are becoming less entrepreneurial. Rates of business ownership were higher in both 1983 and 1910 than they are today. While the last 5 years have shown a slight uptick, the general trend is less businesses, not more.
The United States is no where near the most entrepreneurial country in the world. Mexico and Turkey have 4 times the self-employment rate as the US
Poorer and more agricultural places are more likely to correlate with high levels of business creation.
The causal relationship between the presence of capital appears to be opposite what is assumed. The presence of entrepreneurs appears to attract capital to an area, not the opposite, as is commonly assumed.
The typical business man is a white married man in his forties who started his business to not work for someone else and is just trying to make a living.
More education makes you more likely to start a business (exception: PhDs)
Immigrants are no more likely than native born to start a business
Self Employed people are usually less well networked than peers in their demographic situations
Less than 2% of startups think they're doing something innovative.
Very very few businesses are started by more than 1 person. Of those that are, most are started by related people, usually spouses.

Some interesting stuff for now. I'll keep you updated on poigiant parts of the book, as well as summarize some other important facts from it.

--Michael

Zip Code Colorizer

2007-12-19T03:36:00.000-05:00

Do you need to overlay some data you have on a map to illustrate some information you have?

Rowdy Labs has released a Zip Code Mapper to make this fast and easy.

While it is still very much under development, it is more than sufficient for many data display tasks that people have now.

I am doing development in a different place, so the above link should work at all times and be updated with the latest stable web site.

Currently scheduled updates include better error handling, a pretty print page, and a color picker control on the page.

--Michael

Updates to Rowdy Labs Website

2007-12-14T14:18:00.000-05:00

I have updated the company web page as to my experience and general operating policies. If you're a reader of the blog and wouldn't mind, please see if there is anything sticking out as strange (especially on the experience page):

Rowdy Labs

--Michael

Rowdy Labs Game Development?

2007-11-29T00:09:00.000-05:00

I have some time over the December timeframe to possibly publish a casual game. Flash games and Xbox Live Arcade games are both in the "reachable" range. Flash games get immediate exposure through a number of sites, such as kongregate.com when you publish. Xbox Live Arcade games have to fit a large body of standards to be accepted (similar to MSN casual games), but I would imagine most highly successful flash games would also have to meet most of the criteria just to be good enough to get the playtime required.

Xbox Live Arcade monetizes through purchases of the "full game". Most games are available with one level for free, and the rest of the game for a small payment, usually between $2-$20 dollars.

Kongregate and other related sites profit share from the ads that play on the game sites.

I'm exploring flash right now. It will cost $350-$500 to buy Flash CS3 Pro. I'm not sure if the $350 offer is legit. The "visible serial number" language scares me. From what I understand, Adobe and several others have tied together open source ways to generate flash 9 swf files. I don't really want all the other items in CS3, so if that works, I'll probably put out at least a couple small flash games. (I won't be doing this alone, I have some associates who are interested in this and are capable).

I'm going to probably have to sign NDA's to get more info on XBLA, so will not be able to talk about it anymore. I will probably post what my final decision is though, as I'm pretty sure that isn't something a NDA will prevent me from saying. As the dev environment (Visual Studio C# Express) is free, I'm going to explore the costs and the likelihood I'll be able to get past the XBLA "acceptance" bar.

--Michael

Business Ideas R.I.P.

2007-04-27T19:28:00.000-04:00

This entry is about ideas I killed because there is a business or technical problem with them.

I was contacted by another man named Michael Langford, from Nevada, and he mentioned this blog has been vague about what was being done and not being done (although also read my other blog, Grog and Vittles, where I'm anything but vague).

What often happens with Rowdy Labs is that I start with an idea for a product. I throw together a line drawn mockup of it, then look for the following things while developing the technical side of things:

Someone selling it already
Someone is developing it already
The business models it would be compatible with
Estimates of the capital it would require
Other businesses in the past that tried and failed (and why)
What stimulus in my environment generated the idea

Someone selling it already

Yup. It happens. For instance, product #1, a hydroponic herb grower for your kitchen (have you priced the herbs that the supermarket sells?). As one of the only people I've met who has never smoked weed (a fact my parents teased me about when they found out when I was 22), the most prolific users of hydroponics didn't even cross my mind.

The idea was to work off the razor blade model, sell the hydroponics at cost, sell software and fertilizer packs to keep the kits going.

First of all, market research turned up who *REALLY* would buy this system. I don't have a moral problem with that, just I didn't really want legal problems with that. However I think the number of people who'd go to a Sharper Image or William Sonoma and was high enough that I'd be okay on that angle.

What really killed this product was the fact I saw it already being sold to the exact market I wanted to sell it in. It was in the "Buy all this stuff" magazine they put in the back of airplane seats on a flight back from Miami.

Someone developing it already

While many people say competition is an indication of the existence of a market, I say that the easiest markets are one where you're not fighting off someone 100 times your size all the time. I am an engineer, so I have a better chance of cheaply entering a new market with a novel product (especially a software product) than someone who'd have to pay for that. Then again, if someone is developing something that is functionally equivalent, however doesn't want to or can't focus on your particular implementation style of the idea, then I say go for it, especially if you can cheaply, and all the other stars align.

Just because Showaholic already does find all the local shows of your favorite bands, doesn't mean I can't do it too if I can do it cheaply enough, do it with a different angle (like finding nearby chow or finding cool people with common interests who'd also like to go to it), and do it at all (by myself or with a partner). And yes, this was another idea that got put off (but not originally for this reason).

The business models it would be compatible with

How can this idea make money? The first web boom suffered horribly from 2 things: Venture Capitol being invested stupidly and no business models. Really, these companies had no idea how to make money with their inventions and companies.

So the idea is to figure out how you get money from the idea, and why that's going to work. For instance:

Design Hydroponic Herb Grower
Manufacture Hydroponic Herb Grower
Create Web Site Selling Hydroponic Herb Grower and Herb Fertilizer
Promote through adwords, advertisements in in-flight magazines, high-end interior designer magazines, and through grocery store displays
Profit from the markup on the Fertilizer and a small markup on the grower itself.

-or-

Provide way for people to see their saved wishlist on their cell phone and even buy items off it.
People do some comparison shopping/real world examination of the object in the store.
People buy the object through their cell phone web page while out in the store and are shocked by the higher prices.
Revenue comes from Amazon associates
commissions.

-or-

Start technical blog on how to do different types of embedded programming (that means programming that goes inside devices that aren't desktop or laptop computers).
Write blog about that
Sell in-depth ebooks on the topic

See all the above have something in common: They have a point where you get paid.

I'm almost to the point where I am going to publish for stealing what I've previously put out as "The Big Idea" for other people to implement, as I can't see the profit anymore after a recent trend in banking fee changes (although I think it would make the US in particular a much better place). It might be repairable though, so I'm going to sit on it for a bit.

Estimates of the capital it would require

Some ideas take money. Some don't. I like the ones that don't, as I think venture funded companies often sacrifice a lot to achieve scary growth. Innovations of late is what really makes web 2.0 companies do well. Innovations making this number smaller all the time include: Easy to use programming libraries, commodity priced server space hosted and backed up for you, and as I read today, Amazon will even warehouse and fulfill orders for you. Today is the day to run a company, as the price of business is lower than ever before.

Other businesses of the past that have tried this (and failed)

Who says an idea has to be original? Many online pharmacies died in the 90's, many today are alive and well. Blogging platforms have failed and failed. Some have succeeded. The key here is to find out these reasons were accidental or related to actual fundamental business or technology features of the businesses. Today is not yesterday, many things are fundamentally easier (or even possible today) where they were out of reach in 1998.

What stimulus in my environment caused the idea

Contrary to some people's illusions of their own grandeur, ideas are combinations of previously existent ideas. Sometimes these are very off the wall ideas, so the combination is extremely novel, but at heart, our brains are combination machines. (This isn't my idea, this is Arthur Koestler's)

The reason why this is important because I don't want to be either a> inadvertently stealing an idea from the web that I can't do better, or b> doing something that has been exposed to so many people I'm going to have 1000 instant competitors. Also, if it comes from another person who'll talk to me, they also could be a very fruitful partner it the pursuit.

--Michael

Product Number One: Amazon Wishlist Browser

2007-04-21T12:34:00.000-04:00

This is my amazon wishlist

This is my cell phone

This is my wishlist as viewable on my cell phone

Thanks to the new tool I finished yesterday, you can too.

Would you like a link to your wishlist that your cellphone can easily view? Email me your wishlist at michael.langford@rowdylabs.com and I'll generate you a link to your wishlist while I get a form up and running to automate the process.

In the future I hope to support automatically adding of items to your amazon cart (after you find out how high priced items are in the store).

Enjoy!!!

--Michael

Going Dark to Get Something Out the Door

2007-03-28T00:13:00.000-04:00

Why aren't I posting? For awhile I was suffering from something that Ken Brittain talked about on his blog:

“Originally I had planned to use the blog to tell the story of my MicroISV development. It turns out that writing about creating software doesn’t actually create any software.”

So on or before May 1st 2007, you will see the uberdorky thing I am doing right now instead of writing on this blog. I'm going to throw it up and put a google checkout interface on it, and let it sink or swim, but it will demonstrate what I have been doing and will be a good practice business (aka a MicroISV).

What has been going on:

I'm learning modern web development (Div/CSS based development)
I'm tying what I already know (The programming language python) into a platform for web applications (django)
I'm learning basic businessey things like corporate taxes, breakeven points, bookeeping with Quickbooks, etc.

1 and 2 are geeky and off topic
I'm communicating as much of #3 stuff as I come across, however there is only so much a sane human being wants to know about ledger entries in Quickbooks.

Tomorrow I meet with someone who's got some contacts in an under served industry, and I'm going to see if we can find an arrangement and model that would make sense to serve them. I'm afraid of a tough talk about risk and pie slicing may have to go at that meeting, but if it goes well and I meet with the actual underserved folk themselves, I may have something that has legs.

Lastly, I'd like to apologize about being as vague as I am on this blog. I wanted to do a tell all blog that was real time published as I went along. It would be one thing if I was the only person involved, but I'm not, and I wouldn't be doing the other people justice by shining this 3000W bulb into our dealings at this early stage.

--Michael

PS: I do understand the irony of using a stock blog template after purporting to have learned CSS/Div development. You'll obviously notice when I decide to shave the yak that is tweaking this blog's template.

Switching to feedburner

2007-03-13T10:02:00.000-04:00

My old rss feeds (which many of you are using now) will no longer function.

Now you'll need to resubscribe using this link: Subscribe!

Email subscriptions are now available as well on the right side of the page.

--Michael

Metathinking Business

2007-02-06T11:53:00.000-05:00

"Ready, Fire, Aim" --Heard on Startup Nation Radio

You've got to start, get in there, start doing the work. You are going to make mistakes. It is okay to screw up, sometimes royally. The business might not survive, but you can if you keep yourself setup and your personal finances at least partially working, a business of yours will work sometime in the future.

It's more important you know what you know than knowing it. You can almost always go learn what the thing is you're lost about unless you're in the middle of the meeting of your life and you know you'll not have another. That's why it's important to take to heart how little you know about certain parts of your business, and plan for total meltdown in those parts.

Concretely, this can mean going for "chicken entrepreneurship" (starting a business while having income some other way). Keep that day job, learn some things, then jump on in after you've demonstrated you've got a hint which is the hole in the ground and which is the part you sit on. If your business is service based (or will have a service component for a while), you *can* more reasonably jump on in with both feet. It is going to be easier to stick a toe in to check the market, catching a couple side gigs, while having both feet in the traditional job, then jumping in after your toe is well versed it what's happening there.

So this is why I'm going for a product, but not the huge, full time only product I want to develop eventually: I need to learn that which I don't know, but will need to know, to pull off the big project. I'm not really enamored with the idea of a serivce-based company: That's a lot like a job with a hundred bosses.

So time for some work developing the brochures for the first product to sell....

--Michael

My books 75% Done, and Back to Business

2007-01-30T11:12:00.000-05:00

I have my big product a couple of you have heard about. Its purpose is to make it easier for a person to document and control their personal spending, while making it easy to budget and follow the budget.

While I work on the big project, I've became more enamored with small projects to get growth, some cashflow, and to "practice business".

You must be thinking: "Practice business? This guy is a joke!"

People who study expertise say that the #1 predictor of expertise and talent is deliberate practice of the skill towards the end of improving one's performance. "Common sense" has long dictated that some people have talent for things, and that others don't. Modern research has shown this to be bunk.

I'm not saying a 5 year old can be a CEO of a 10,000 person corporation. There are tons of skills that must be mastered via years of diligent practice before you can be a leader of that stature. As I'm probably closer to the 5 year old than a superstar CEO right now, it's time to start the deliberate practice.

Girl scouts sell cookies and child fundraisers sell candles. This method is called charitable direct sales. The basic model is a charitable organization, usually involving parents and children, agrees to use your sales brochures to sell a product. You take all the orders from the organization, after they've solicited from a large number of friends and family, then you supply the product to the organization, and you take a cut of the difference.

One of the nice attributes about it is that you don't have to buy the product until after you have all the orders. And it is something I can get going now, then work on the big project while waiting for the sales to roll in. It will also give me an education in marketing, which will be helpful for marketing the big thing.

I'll post a brochure when they're finished. My first foray will be something I know a lot about, although it is probably not the most profitable one, I think its one some parents will think is good for their kids and teens, and kids and teens will enjoy.

--Michael

A blog is like a dog.

2007-01-16T12:19:00.000-05:00

You feel horrible if you neglect it.

I do keep much better care of Muffin (my Boston Terrier) than this blog.

I'm suffering from bookkeeping procrastination. I've told myself I can't do the interesting parts of the business until I get the books done, as that's needed for the taxes at year end. This bullet is going to be bitten this week. As books aren't that exciting (even thought the cartoon diagrams of Quickbooks are appreciated for someone visual like myself), you don't want to hear about this part.

--Michael

Writing the Business Plans

2006-12-16T16:15:00.000-05:00

I'm currently building out my business plans out to something that can at least make them worth evaluation by the steak dinner crew I mentioned before. I've got 2 down (mostly) and I'm about to break into the 3rd and last that I'm going to evaluate this month.

While doing this process, I've noticed there is a screaming need for a business plan book that allows you to make a very small plan. This isn't something you should be running a big concern with, but it's something everyone could do (down to ebay auctioneers and non-profit animal rescues). I know the small format I've been looking for is not covered any place or in any of the several books I've looked though.

Again, the reason I'm going small format on the business plan is not laziness, or lack of thought, its that I'm not sure which of the three ideas I will be perusing come February. Getting the ideas down on paper will allows souls more objective than myself to reject or cheer on the plan.

I'm going to publish the format (and perhaps the bplan itself) when I'm done writing the actual plans.

Meanwhile, I came across these links which would be useful to this audience:

--Michael

Adsense and Amazon Associates

2006-12-05T08:00:00.000-05:00

Some people have called the new set of web services that have sprung up since the dot-com crash "Web 2.0".

Still other people have said, that we'll know when web 2.0 crashes when Google's stock price crashes: Many web 2.0 services and sites survive on Adsense revenue.

Adsense is the blue box of ads in the upper left hand corner. This also is how A-list bloggers make their living, and google justifies the costs of services such as Gmail. There is a simple bit of text I paste into my blog. I get the set of text from google. The code that I pasted in will start showing ads there after a couple days from the time you paste it in (I put the code there on Friday, the ads showed up on Monday afternoon).

I signed up for Adsense not because I expect the normal readers of this blog to particularly be interested in the services of the ads served to them, but because if I ever get "slashdotted" (hit with thousands of viewers from a link on a popular website), the Adsense revenue from that is something worth talking about, and will pay to rebuild my (virtual) server which would most certainly (virtually) melt.

Some of my ideas involve Adsense revenue as part of their business model; getting the account and learning how to use it now on a blog will knock down that obstacle for the future. (And taught me interesting things, like the time delay between setup and first show).

What's Amazon Associates? It is an affiliate program by amazon.com that makes it so third parties, such as myself can build links to their site, then get a portion of the revenue on the sale of the item linked to. I personally was an affiliate because I posted a lot about books on message boards (I'm a big reader, over 100 books a year). Other people asked for links rather than just titles. Links to amazon are a lot of work mind you (you can't always just copy the url from your browser), so this way I'd have a small incentive to go through the link rigmarole. This program has been around since 1996, and will direct deposit into your bank account every time you hit some milestone ($100?) or at the end of every quarter.

Again, one of the ideas I'm throwing around involves Amazon Associate referrals, so I figured it is time to get a Rowdy Labs LLC account in order to facilitate future action by removing impediments

--Michael

Links:
Amazon Associates
Adsense

How to read this site

2006-12-04T22:27:00.000-05:00

RSS

Why should you do RSS? RSS is a system for reading as many sites as you'd like in a format that is quick to get to. RSS also allows you to see what sites have updated since you last read them, making it so you don't have to click through to get to the site. You subscribe to them (it's free to do so) by clicking on a link like I have down on the right, or by clicking the little orange icon in the URL bar that looks like concentric moons(). The sites will all show up in an application you've called a reader. Most users of RSS feeds seem to use online readers, such as Google Reader and My Yahoo.

If you're not using RSS, you're missing out. Google Reader is my reader of choice, but there are several other readers out there, which aren't at all affiliated with google.

Most sites have feeds now, from blogs, to the New York Times, to Stock tickers and web comics. It is the way to do all your browsing in a quickly digestible form. You can blow through an additional 10-25% of sites when you don't have to really navigate them.

If you make an account with any of the sites listed down on the right, that will get you going quickly. I recommend you click the "+ Add to my Google" button and join the new way to read the web. Then you don't even have to check back to see if I've updated: You'll see it in your feed reader.

--Michael

Bank Account + 1099 Land

2006-12-04T22:05:00.000-05:00

Today I opened a business bank account.

Wachovia has annoyed me in the past with a crappy fee or two stemming from their recent changes to online check writing. It changed an online check writing model that was simple to one that was overly complex. A $100 fee later, I understand the system.

Anger alone made me wish to change, but it doesn't make good business sense. The local options for banking don't seem to exceed Wachovia's integration with yodlee, the company that ties all financial accounts together for consumers. So I'm stuck with Wachovia. The fact I have been with them (or a bank they bought) since 1992, could help getting a line of credit for the business (not holding my breath, mind you).

It took approximately 40 minutes to open the account, choose checks, choose which business account I wished to sign up for, and to get a cashier's check to pay my accountant (I don't have printed checks yet, they'll come sometime next week).

Remember, bank accounts should always be free: The bank is loaning out your money. Wachovia is waiving all minimum balance fees, upgrading my personal accounts to "crown" (their premiere service) and is paying for the first couple orders of business checks.

To get the business checking account, I needed the following:

EIN of the business
Articles of Organization
My drivers license

They took a copy of two pages of the articles, and had me fill out two forms where I merely stated my position, my company's tax status, filled out signature cards, and filled in my EIN. Remember, I got my EIN online from http://georgia.gov when I filed for it from the IRS. It's technically a provisional EIN, but as long as I've filled out all the forms and answered all questions in good faith, I'm not worried (many of the forms state something to the effect that good faith==good enough).

After I got the bank account finished, I called the staffing company who's been paying my paychecks. He agreed to different terms for hiring my company in lieu of myself, including the increase freedom he has to allow me. He's done this several times before evidently. All I had to do to seal the deal was download and fill out a W-9 form from the IRS (it's a lot like the W-4 you fill out when you get a normal job, except much shorter) and fax it to him.

Under our former arrangement, he would have direct deposited money into my personal accounts. Now, he'll write a check to my business (weekly, he's great like that), and I'll deposit them into the business accounts. Once a month, I'll pay my self my salary (and perhaps take an owner draw on profits). If once a month seems harsh to you, I'll say its how my first job out of school paid, so I'm used to it. I really recommend the system for young people: It enforces the maintenance of a monthly budget.

I do need to still find out what forms I need to fill out on myself as an owner/employee. I may be filing a W-4 for myself with my company. I'll keep you posted.

--Michael

Paying my debts to those who've helped so far

2006-12-01T18:59:00.000-05:00

Books I've used so far in this quest towards running a business (with ratings) in this deal:

The One Page Proposal Wow. It shows how to put down the financial aspects of a deal along with the salient points that can by digested by anyone.
Anatomy of a Business Plan Goes through each and every part of a business plan (Operational, Financial and Marketing). Has sample plans as well.
Getting Things Done is a book by David Allen that lays out a method for tracking your commitments and getting the granularity of your to-do lists down to a level you can easily knock out like widgets through a factory.
Thinking Strategically is the book on how to make correct decisions in situations where people who's interests are even partially at odds. Good at showing the value of Regan's "Trust but Verify" adage.

Blogs I've used so far:

I Will Teach You How To Be Rich by the young creator of PBWiki on entrepreneurship and personal finance
Guy Kawasaki's How to Change the World shows the perspectives of a person who succeeded at what we're trying to do
Get Rich Slowly is a blog about sound personal finance. Essential to get a business off on the right foot.
43 Folders by Merlin Mann holds troves of ways to manage email, to-dos and other personal productivity needs.

A site and podcast I've listened a lot to in all this is:

StartupNation Radio

Nutritious and Delicious: CPA Tax Conversation

2006-11-28T01:54:00.000-05:00

Thank you for the recommendations as to your CPAs. I called and googled several, and decided to go see Ahmed Zaki, the father of a friend of mine from college.

He is the CFO of several small companies, and was very easy to understand on the phone. He's also a certified financial planner, which will come in handy in all of this.

Don't take any of the following as his advice (or mine); it's my imperfect recollections of the things that were most salient to me. I could even have things below absolutely backwards.

We had an hour and a half conversation today encompassing several things:

-The tax treatment/behavior I needed to get be a 1099 contractor for my current client. A C or S corp tax status along with several other behaviors of mine will guarentee I can be a 1099 employee under the IRS 20 questions about W-2/1099 employees. Ironically, the creation of the corporation would probably make me change the last few behaviors that made the 20 questions iffy as a sole-proprietorship

-The way mileage deductions work (to go to the site of my current major client, I have a 39 mi round trip, so this is important).

-How taxes are treated in S-Corps/C-Corps/Disregarded LLC

-How you introduce assets into the company (a fair value, so a used laptop is not going to be valued at the price you bought it at, even if the company still sells it at that price)

-What my hourly costs would be if I didn't ever produce a product but just paid for labor for contracting clients.

-What's a good business expense, and what's a shady, asking-for-an-audit expense. [I was continually amused how "non-aggressive" I was in things I was interested in expensing]

So the public service portion of this post will be a re-explanation by me of the 3 choices you have for your LLC tax treatment.

First off, when its time to do real business (ie, open a bank account), you need to file a SS-4 (with the IRS). The IRS will then give you a EIN, the company version of a social security number. Beware, this starts a clock. Until you do this, the company you form lies dormant. Filing SS-4 puts a timetable on the 8832 and 2553 elections explained below.

1. You can do nothing, and it will be treated as a sole proprietorship/partnership (depending on number of members) for the sake of taxation.

Profits flow through on the 1040 C of the owner's return
All profits that flow through are taken as pay, so you pay Social Security and Medicare and Unemployment on them.

2. You can elect to be treated as a corporation (a c-corp) on form 8832.

Your profits will be taxed at a corporate tax rate by the federal and state gov't. If you release profits to the owners (which you do *not* have to do), they are taxed at the owner's rate.

There are incredible loss retention capabilities in this type of tax treatment. If you lose money in a given year, and you made money in the one or both of the prior two years, you can amend the last two years to get the tax paid on those profits back. You can also retain losses in a C-Corp for up to 15 years.

I didn't note the exact timetable here, but I think I read this was "Before you file a 2553, and before/when you file your first year's taxes".

You can also set your fiscal year to be something other than the calendar year if you're a C-Corp. This is key for government contractors (the US Gov't fiscal year runs from 1 October - 30 September) who have reporting requirements along the government's fiscal year.

3. After electing for a C-Corp with form 8832 (option 2a), you can file a 2553 within 75-days of the SS-4 filing to become an S-Corp.

With an S-Corp, active members need to take a salary. This will be taxed with Social Security and withholding and Medicare and unemployment. However, all profits/losses left in the S-Corp at the end of the year are added to the owner's adjusted gross income. This means as an owner, you're going to get the profits and losses of the S-Corp against your own income. This portion is *not* taxed by social security and its ilk. (See the tax advantage over the disregarded LCC?)

With an S-Corp, you have a couple strictures. Major ones include, you can't have non-US investors, you can't have more than 100 members, you can't have C-Corps as members and you can't have more than 1 type of stock. There are surely more.

You can revoke a S-Corp election with a simple letter to the IRS. Beware though, you can't re-elect to be an S-Corp again for 5 years. There used to be a lot of "perq" restrictions on S-Corp owners. These may or may not have eased recently, especially medical exceptions. The common consensus seems to be that perqs alone aren't enough to offset the double taxation.

Now, what's the thing for me?

Well, 82% of businesses run by first time entrepreneurs (that's me) fail, I should possibly look at the C-Corp long and hard. Also, I'm thinking about making this a lifetime investment vehicle for my job of the moment. In that case, the wealth retention aspect of the C-Corp might be better.

As I can get out of S-Corp status relatively easy (write a letter to the IRS), I should very possibly just go that route until I am sure I at least have the possibility of a big loss.

I'll let you know which of the two options I chose. I'm glad to get the tax questions out of the way so I can cost out rates and figure out other basic financial issues confronting me so I can get back over to the actual business of the business rather than the sideshow of taxes and costs.

--Michael

SCORE: Mini-Business Plans & Startup Cashflow

2006-11-21T09:13:00.000-05:00

SCORE is the Service Corps of Retired Executives. I went to their free seminar at the Cobb Chamber of Commerce on Mini-Business Plans and Startup Cashflow Analysis.

In SCORE, retired company executives and former entrepreneurs in retirement mentor those who are just starting business or looking to expand. I've heard their name over and over, and I had been thinking full-blown business plans were overwrought for presentation to a small group over dinner (as I've mentioned before). I was going to learn a format that was only a couple pages.

Turns out the mini-business plan format they were proposing was sufficient, running about 3-5 pages and addressing organization, marketing, legal, financial and other basic needs of a business plans in a couple pages.

The second part of the seminar, which I didn't even really remember was happening until I got there, was more interesting. It was "Startup Cashflow Requirements". This is basically getting that room full of people to correctly model the following variables:

Startup cash
Fixed costs
Profit per unit
Cost per unit
Receivables payment terms
Payables payment terms
Monthly Growth

They did this by showing the cash flow calculator on this page then walked through 4 people's business plans who were in the room.

A revelation to me was the cashflow squeeze put onto the small businessperson by the fact when you're new, you have to pay every supplier immediately, but (for many industries) your customers will demand that they have 30-60 days to pay you (Net-30 and Net-60 in the lingo). That causes many profitable businesses to go under, simply because they must offer credit, but can't get it themselves.

This is the mechanism that allows growth to bankrupt many business: They don't have the cash required to handle all the orders/clients/widgets so run out of it before getting the payoff that will save them. As many costs are merely forecasts, a small error when you're growing quickly can incite bankruptcy quite quickly if your operating cash is low enough (as it is for many small businesspeople).

Other additional tidbits: Business loans right now (for small companies) are going to require about 30% collateral if above 25K. The interest rate will be ~13% if you personally have good credit.

Community loans are available to many people, especially women and racial minorities for amounts up to 50K.

In addition to the seminar itself, I talked to the businesswomen on either side of me. They came to the seminar for the cashflow half. Merissa, is the founder of Cornerstone Tutoring. They serve Henry and Clayton counties, providing tutoring to children after school. Of interest to current tech students: Tutoring in math pays surprisingly well. The second person was Terri Robinson. She has a diverse range of offerings (including a credit card payment system), but the thing that made me talk to her was that she sold one of her products (greeting cards) in supermarkets. This was a trick I wanted to learn, even though the product I wanted to sell in that position has already been made.

(While the lesson can be learned, why not learn it for the future?)

As she explained, there is an office of buying agents at the corporate headquarters that you contact with your product. You send a product and arrange an in-person meeting if at all possible. You provide racks (usually) for the store, and you keep in contact with the stores so when the racks are getting empty, you provide more product to them. This question was on my mind because the Startup Nation's radio show (which is podcasted on their website) has an episode I'm now listening to talks about the selling of product on QVC (Children's Items Don't Sell; Ability to Demonstrate Product is King).

As everyone in the room knew I was a deep tech guy, people asked me questions too. I am amazed how much more fundamentally sound tech businesses are when thought up/started by non-tech people. Most of the people in that room would need a sound technical partner to look out they weren't being snowed at first, but some of those ideas were clearly great business ideas that used technology in a way that would clearly relieve pain yet make money. (I don't know what level of discretion these people expected, so I'll err on the side of caution as far as mentioning their ideas). Some of those ideas will go quite far indeed if they seize them.

--Michael

Atlanta Chapter of SCORE

Why such a weird company to start with?

2006-11-17T08:56:00.000-05:00

I'm currently contracting through a recruitment service. I only had an obligation to do this for 6 months, and there are few advantages to me to continue doing so. They're primarily a company that works for other companies to find talent, not to serve talent.

Rowdy Labs is a place where I can:
1. Do consulting/contracting in my field (Embedded Firmware/Systems Programming)
2. Start smaller ventures with liability protection without having all the paperwork in the way as an impediment.
3. Keep money I intend to reinvest in business in the business. Taking the money out as salary/draws then putting it back in has both financial planning and tax issues.
4. Easily spin off ventures "getting too big to share the playhouse" or that need to allow other people to have equity in the company.
5. Deduct real business costs (I buy 600-$1k worth of technical books some years, the laptop I use solely for work is about to fall apart, etc).

--Michael

Deciding the Tax Treatment

2006-11-15T10:06:00.000-05:00

I'm calculating my overhead right now (to be able to price out rates).

The chief decision this forces is whether my LLC is going to be treated as a C-Corp or a Sole Proprietor by the IRS. If I elect the first, I file a form 1132 just like every C-corporation does. If I elect the later (which is the default), I will get treated like a Sole Proprietor and fill out a Schedule C on my personal 1040C.

Neither of these should ring out to you right away for this venture. For a services company, the default behavior where I just file 1040C would make sense. There is a very good chance I'll be doing services work right away with one company, but my real goal is more product-oriented. Corporate treatment allows some tax deductions and also changes the way income is disbursed to owners. This can be negative or positive depending on your costs, and what business you actually do (as well as your personal finances).

The form mentions a 60 month freeze period between changing tax treatment, so I'll be stuck with this choice for a good number of years.

The expensive answer is: See a CPA
The cheap now but expensive later answer is: Use the internet
The possibly expensive later answer but probably the one I'm going to do first: Read a couple books on the topic written by a CPA.

If nothing else, the third option will educate me for the meeting with the CPA so I can use that time most effectively.

--Michael

Anyone know a Small Business CPA in Atlanta they like? Right now, I'm about to draw from the BBB and Atlanta Chamber of Commerce to find a good one.

Why'd you pick that name?

2006-10-30T21:18:00.000-05:00

Justin Crowell, a friend of mine who lives in Austin, Texas, asked about why I chose Rowdy Labs as a name.

It's memorable.

It's polarizing. Using ameliorate in my resume gets me rejected from the type of company that would hire a HR person who'd reject a resume because it contained a word he didn't understand. Similarly, if the name "Rowdy Labs" scares you enough to avoid my business you probably should avoid my business. If the connotations of the word Rowdy make you think I'll going to fight the world if necessary to make the idea work, you'll know I'm your man. Polarization is bad in some spheres. When you can use it to generate good fits with like minded people, it's a great thing.

"Rowdy Labs" also connotes that this is an incubator that will spin off businesses as they take on a life of their own. The business of this business will be founding businesses. I'm most interested in ideas that aren't just another job. Ideas that gain a lot from a lot of effort building them. I'm a builder at heart.

My Grandfather and Grandmother ran a 7-Eleven franchise from before I was born until I was 12 (Grandma sold it to move to Georgia with us). Grandpa was a maintainer, a shopkeeper at heart. I learned a lot about that from the years I worked there. By the time I was twelve, I was running the register, and stocking the shelves and much of the other work that goes into keeping those running. It's a great thing if you're the type of person who likes a steady income, customers who know your name and you theirs. I think I might think about it for retirement. Until then, building will be for me.

Some businesses, such as consulting, work out for great people. However you're fundamentally limited by the amount of *you* there is. This is fundamentally shopkeeping. This appeals to some people. Speaking with a member of that company, it really appeals to them. Good for them, and their many happy customers. It is a tried and true method, and it is bringing them prosperity.

Other businesses, such as product creation/selling, wholesaling, fixed product websites and distribution have a much greater potential for scaling. Growth is much easier to scale (you're not fundamentally limited by the amount of you) and they're very up for outsourcing. They allow you to concentrate on a core competency, and building relationships. As I have the skill of keeping a lot of plates in the air, I can do this sort of business.

Something I am good at is a research, research, research, work, work, work, work, work, work, work, work, then concentrate on marketing and growth. This fits working an idea hard until it works, then backing off to let more long term people the day to day.

Focus is key in businesses. I'm not trying to sign up for a life of leisure. Just hard work with the possibility of a big payoff.

--Michael

The first step of founding a business

2006-10-28T17:56:00.000-04:00

You pitch to the gods and people just happen to be there.

  --Guy Kawasaki

I've had the dream of Rowdy Labs for quite awhile. Now I've taken the first concrete step towards a business to capture the creativity and deep research I put into what I do. Last night I registered my LLC with the State of Georgia. You can do so here.

How could I do that without weeks of backbreaking research on how my company should be structured? You define how to change an LLC's operating agreement when you set it up. "Unanimous written consent of the members" is what I chose (as many LLC's do) for as the amendment criteria. I'm the only member. I can agree (on paper) with myself about how I'd like to change the agreement when the company needs to change in the future.

If I decide later a C or S corp are beneficial to the business, I can form either kind and sell the LLC to it. The purchasing corporation would then be the sole member of the LLC, and could do what it will with the company.

What does Rowdy Labs LLC do?

That is still to be determined. I have several half done business plans. I'm going to finish the most promising of those, and bribe some of my business minded friends with a steak dinner in the hopes they'll acid test those plans.

Of the plans that survive, I'll choose the one with the highest expected value that also can self-fund.

I have a couple small projects that don't merit their own company or collaborators. These will also be showcased here as they go live. These are going to be on the side, and are a "Do it and it's done" type of business (Like writing a textbook, building a building, etc).

I will try to post a business plan that we've decided will not be for me, so others can see how it's done without doing all the research themselves. As of now, the main company website is not up. I will post when it is and will link to it from the sidebar.

      --Michael Langford, Founder of Rowdy Labs LLC

PS: Oh yeah, day job people: I'm not planning on going anywhere until that becomes necessary or I get rich. You've got awhile for either :o). I want to have my cake and eat it too.

Definitions:
Self-Fund- A business that does not require outside investment to start or continue.
Operating Agreement: Document that controls how the LLC works, states the indemdification, specifies how members take profit, specifies who runs the business and specifies it's own modification criteria.
Member: Person with an ownership stake in an LLC