Starting a Business? Five Things to Put Your Start-Up Funds in First

Let’s face it, when you start a business, money is tight. So where do you put your limited amount of funds to get the ball rolling?

Here are my top five places to invest whatever money you have at the beginning, because without them your business may never fly.

1. Name Search and Incorporation

What’s in a name?

Plenty if you’re running a business. Names are more than a way of branding your business, they are legally required for tax purposes. Incorporating your business is a small price to pay at the beginning, rather than personally be wiped out financially by a law suit which holds you personally accountable for your business, instead of your incorporated business.

On the flip side of this, I actually find it hard to start a company without a name. I suppose it’s just my logical brain in action.

Take time to brainstorm several possible names for your new business, and then conduct a corporate names search to ensure no one else has a similar name. In most North American jurisdictions, it’s illegal for you to operate a business under a name which is currently in use within the same business sector or industry. Though it’s usually best to make sure no one currently uses that name in any business or industry sector – I often make up words for my company names.

Once you establish a name for your business – that isn’t already in use – register it so no one else can use it. Then get a good business lawyer that specializes in start-ups, and incorporate that business.

This way, you have your name, and the legal paperwork to back everything up.

2. Logo and Slogan

Starting a business really can be a fun and creative process – first you have to brainstorm a name – now you get to go all artsy and design a logo and even a slogan.

Many people don’t think they need a logo for their new venture right away. Who’s going to see it, as I’m still developing the business plan?

However, a good logo separates you from your competition, gives you a professional image, and both are extremely important elements in the ultimate goal for our first five places to spend money on your new venture – networking. If you don’t have a logo, a catchy one-line slogan that summarizes what you do, and the rest of my top five list here, you’ll be constantly struggling to tell people who you are, and what you do at networking events. And when you start out, networking is really important, because real entrepreneurs help each other.

3. Website and Email

You don’t need a fancy website with all the bells and whistles when you’re starting out. But you do need one that at least has some basic info – like your logo, slogan, and how to contact you.

Getting a website forces you to register your company’s name for a domain name – which is really important. Some people I know run their chosen company names through the WHOIS database to ensure they can secure the matching domain name. If the domain name is already taken, they won’t name their company that.

I’m old fashioned, and love the dot-com domain extension. To me, that’s the one most people are going to try first on Google and the other search engines if they don’t have it in front of them. 

However, if you have the money, it doesn’t hurt to register the most popular domains for your company – the “dot” org, net, biz, info, and co. If you’re in Canada, you might also add .ca to that list, or .us for American-based companies.

This protects your business from copycats, or worse, others using your company’s names, or even ones really close to it, and just creating a different dot-something or other using your company’s good name.

Once you have your web domain setup, and a basic website, you can also get a professional email address. Although Google’s gmail is a fantastic program, when I see john@gmail.com I just know I’m dealing with an amateur. There’s no harm in looking like a big impressive company, so use firstname.lastname@companyname.com as your email address – or whatever your professional domain is.

Remember, an email address and domain name aren’t just for communications – but for PROFESSIONAL COMMUNICATIONS.

4. Office Phone and PO BOX

Unless you want your customers and everyone you do business with to call you at home, I’d get a separate phone number and a PO Box for the mailing address. This way, you protect your family and yourself from anyone that happens on your business contact info. A separate phone line is important, even if you’re running your start-up from your home, because the last thing anyone that is going to do business with you wants to hear, is your kid answer the phone, and yell: “Dad, phone!”

5. Business Cards

Once you have your registered legally incorporated business name, a logo and a slogan, a website, email address, phone number and a PO. Box, you’ve got all the basics to put it on a slick business card, so you can hand it out to potential customers, business partners, or anyone that you want to take you seriously as a professional.

Even in start-up mode, business cards with all the correct professional information are very important – what else are you going to give someone at a networking function that might be able to help you get your business off the ground?

Beware Anyone Doing Business Completely Sans Paper

Live and learn. Or so the saying goes, but sometimes we never just learn, despite our inner voice warning us away.

Recently, I had that experience, as I had stumbled on what I thought would be a fruitful business relationship. We both had something mutually of interest to offer the other professionally, and had initially agreed upon the terms of service over the phone.

Then came time to do the deal – or so I thought. Turns out, our brief phone call was the deal, at least in the mind of the other party to this “business” relationship.

I’ve always been weary of those that won’t put things down in writing. We hear time and again how flimsy verbal agreements are, how they don’t really hold up in court because they depend on a judges’ interpretations of what each person claims the other said.

Even in our modern era of emails, instant messages and SMS text messages, I get cold feet when someone sends me the terms of a deal only via one of these digital forms of communications.

Not that I expect the worst, but anytime someone tells you "let’s just shake on it" – walk away.

I should have run away prior to latching onto one of these “business” people. Any legitimate business person wouldn’t even THINK of doing any business deal on the basis of nothing more than a smile.

That smile sure didn’t last long with this “business” person.

I got suckered in by the passion for what I do, and the opportunity to share that passion with the world. The business looked legit – they had a website.

"Hey Jordan, my five-year-old kid can create a website."

Now you tell me . . .

At first everything was great, I did my part of the deal, they did theirs. 

Then, a couple of months in, they started to change. They weren’t living up to the terms of our verbal “agreement.” Sometimes they were early, most of the time they were late.

Then for a while there was a string of early deliverables, which was followed by requests for additional ones on my part.

This wasn’t part of our original verbal “agreement” but they quickly amended our non-existent arrangement via email.

I didn’t mind, so I went along with it, for another few months. Then they asked me to do even more but at a fraction of the price.

I thought about negotiating. But how do you negotiate when you have nothing in writing to back you up? As it was, I wasn’t happy with myself for signing a non-existent agreement.

That little voice in my head kept nagging me, calling me a fool. Telling me "you'll be sorry."

I’ve been burned in the past by verbal agreements when I was young and naive. And part of me was questioning my own intelligence and business savvy, having fallen into another verbal agreement so many years later.

I declined their additional requests, but said I was happy to continue with our current “agreement.”

They obviously took great offense to this, as the pattern of their lateness began again – even increasing to the point where I started wondering how I was ever going to exit this situation gracefully and without harm to my interests.

Then they decided to give me “notice” via email to amend our non-existent agreement cutting both their and my deliverables down by half.

"How can you give me notice for a contract that doesn’t exist?" I scoffed.

Then it dawned on me, you can’t. There’s nothing binding between us. They have nothing to give “notice” on, for or with, according to my legal team. In fact, if you don’t have anything in writing, there is no binding agreement. The word "notice" has to refer to something already defined in writing, usually (but not exclusively -- my lawyers point out) another word: "term."

A verbal contract is no more binding than the air it is “written” on.

“You might as well have signed it with invisible ink,” said one legal expert.

So you’re free to leave it at anytime, and without any notice he tells me.

And that’s what I did.

Though I did let them know via email.

I wanted to send a letter. 

You know, one of those old fashioned documents printed on paper. 

I like things in writing. I’m funny that way.