Small Business Entrepreneur Blog

I did some guest-posting on the Bootstrapme blog about small business finances and why Bootstrappers should keep finances separate. It was my way of not agreeing with one of Dane Carson’s articles about 20 Things Not to Do Before Starting A Business and especially with “Don’t get a bank account. Your personal banking account will work just fine if someone wants to write you a check, or if you need to pay for something.“

While you can find plenty details I wrote on the Bootrapme blog about separating personal and business finances, below it’s a complete overview and comments on Dane Carlson’s article:

1.Don’t quit your day job.
=> agreed

2.Don’t incorporate. Seventy five percent of all businesses are sole proprietorships, and they already make money.
=> in Romania you are not allowed to do business without proper commercial registration. This includes registration for taxes, employment, Registry of commerce, etc. The lightest thing would be to become an authorized person which is more or less the same as a company.

3.Don’t get a bank account. Your personal banking account will work just fine if someone wants to write you a check, or if you need to pay for something.

=> bank account is mandatory together with point 2. My opinion is fully explained here

4.Don’t rent an office. Work from home. It won’t require a first, last and security deposit. Plus, it’s tax deductible.
=> agreed, but even if you work from home, you are requested to declare it as your business office.

5.Don’t hire an attorney. What’s an attorney going to tell that you didn’t already know, or couldn’t figure out on Nolo or in a good bookstore? There are only two times to call an attorney: if you’re in jail, or if someone else’s attorney contacts you.

=> correct, while for the incorporation is always cheaper and better to get one and save weeks of bureaucracy.

6.Don’t hire an accountant. Quickbooks Simple Start will get you going.
=> because of changing legislation (from month to month) its impossible to remain “legal” without an accountant Even if you are not doing sales, you have to make a lot of papers each month or at least each 3 months.

7.Don’t get a loan. To get a loan from anyone, even your family, will require that you do too many items on this list. And besides, if you get a loan, you know work for the bank — not for yourself.

=> agreed

8.Don’t hire anyone. Don’t hire someone if you can do it yourself. For everything else, use contractors and give them 1099.
=> agreed from the business point of view. However, the Romanian legislation requires every Micro (very small company) to have at least one employee.

9.Don’t get a business license. I’m not advocating that anyone cheat the government. Once you can sell your product/service, go out immediately and get all of the necessary business licenses and permits in your jurisdiction.
=> Impossible, you can’t make invoices, etc, etc

10.Don’t try to patent anything. It takes 1.5 to 2.5 years to get a patent. Who knows what the market will look like then.
=> agreed, actually the sad story is that even most of well established companies here don’t patent.

11.Don’t design a logo. You are your own brand, you don’t need a logo.

=> agreed. But you need a commercial name

12.Don’t waste time picking a business name. As a sole proprietor, you already have a business name: your own!

=> if you are an authorized person (see point 2), correct. Otherwise you need a business name, because you need to incorporate

13.Don’t advertise. Advertising costs money, and takes time to perfect. Selling takes only you.
=> agreed

14.Don’t buy office supplies. If you need a pencil, get one out of the kitchen or your son’s backpack. You are working from home, aren’t you?
=> agreed

15.Don’t buy any equipment. Outsource everything. Fedex Kinkos can handle all of your printing, and instead of splurging on a postal meter head down the post office. Need something big? Rent it! If it’s not something you can rent by the day, maybe there’s another local business with one. Can you rent it during their off hours in the middle of the night?
=> we don’t have a lot of these services here. So most of the things should be done in house => you need to buy stuff

16.Don’t try to find a partner. What do you need a parter for? Capital? Don’t take loans. Need someone with some sales experience? If you the inventor of your product/service can’t sell it — no one will be able to.
=> not sure, finding partners with different skills was the only way for us to be able to provide a solution.

17.Don’t join the Chamber of Commerce. Chambers of Commerce have great mixers where you can meet and network with other local business people. Right now, you don’t need to network, you need to sell! Plus, you can always go as a visitor.
=> agreed

18.Don’t tell all of your friends about the business that you’re going to start someday soon. Every minute that you spend telling someone you love about your future business is one less minute you have to either try to find someone to buy your product/service or to refine it. Plus, everyone knows an “entrepreneur” that is all talk and no action: don’t be one yourself.

=> I have mixed feelings about this. If you are not a “kiss and tell”, then who is going to do it for you?

19.Don’t write a business plan. Sure you need to know what you’re going to do and how you’re going to make money, but don’t waste time formatting it into a structured plan.
=> completely disagree. For example, we have started another side of the business this year www.inprogress.ro which is a media agency for the Romanian market. We didn’t make a real business plan, and we’ve suddenly got to the point where we needed to hire an employee, quit job (2 of our partners), get an office and stuff like that without being prepared. Because of that, this was “really bad for our personal savings account”. The new business is going excellent now, but we have used resources that might not be available to a “regular small business entrepreneur”

20.Don’t get a business telephone number or mailing address. You have a cellphone, use it. If someone needs to mail you something, have them send it to your house. You’re working there, remember.
=> agreed

The comments that I wrote might be specific to Romania and can be slightly different under “special conditions” For example if you are a dentist, there is a special form of “incorporation” that cuts some corners, but I would say that 90% of the business here goes on the pattern I’ve described.

NOTE: the “20 Things Not to Do Before Starting A Business” credits should go to Dane Carlson, I just copied them here to be able to give “intelligible answers”

Ok, now if you came here to find ways to finance your small business, here are the 7 great ways to finance a startup from CNN money.