Of the Day of Enlightenment

Well I've spent the last hour and a half in conversation with my former roommate Jake Barreth, for some tips on the processes and needs for getting a business off the ground from scratch, from advertising to attracting venture capital investors to licensing to planning.

When it comes to getting licensed, our two best bets seem to be the LLC (preferred) or an S corporation.  Both have limited liability for us, and both are only taxed once, instead of in two waves like a C corporation (once for the business income and again for salary income).  The difference between an LLC (and we'll need to double check on some of this on government websites) and an S corporation is in accounting, as in we can take more deductions on taxes with an LLC.  So although I already knew somewhat that we'd want to be an LLC, now I have a better idea as to why.  Another important factor I'll look into is getting the name trademarked and our work copyrighted.

As soon as we can, we are going to need to get whatever equipment we need to start (mainly me, with video equipment...Taylor be thinking of what else you might need for website design), so that we can start making money as soon as we're licensed.  We may not even need to be licensed, as Jake seemed to think that occupational licenses may only be necessary if you're working out of a place that is designated only for work, whereas we would be working out of home.  Then we need to start doing as many small projects as possible to start building our name and reputation.  Jake recommended, as a smart future P.R. move, that we do some pro-bono work so that we can have our name out there in a good light and the word will spread.  An example would be making a free video for a children's hospital that needs to raise money, and distributing it wherever we can so they can raise enough.  It would need to be strategic, however, at the same time, without taking away from what they do...as in, we would need to find somewhere that we can gain a good bit of exposure, involving an issue a lot of people are concerned with.  One possibility which would be absolutely incredible, and could be comparable to the Invisible Children documentary would be going with the pilots of Mission Aviation Fellowship on their trips and filming the reality of the destruction AIDS is causing in Lesotho (where I was this past summer).  That might be something we could raise money for ourselves, and then bring back a documentary to spread the word about their ministry and how they need much more support.  We want to push a word-of-mouth expansion as early as possible, due to the time it takes for word to spread.

All during this time, we need to either have a finished draft of a business plan or at least be close to finishing one.  And we need to have a functioning website up at this point.  So, after we've gotten some exposure and have built up at least a small reputation (with evident potential), we can pursue serious funding opportunities.  Options:  1) Loans (NOOOO);  2) A personal line of credit from a bank, which would not be under the name of the business but one of us individually;  3) Federal grants (research needed)....Jake compares it to applying for scholarships--you just got to apply for as many as possible and you might get one or two;  and 4) venture capital investors.  Of course, we don't have to get all our money from one person or one place.  We might be able to secure a grant and have a venture investor, who knows.  We can ask for small commitments from people we know, for 6 months at a time, something like that.  But in order to do so, the business plan is priority one, with some previous work to back it up.

So, let's say we are going to pursue venture capital investment.  As a start-up company we want to pursue individual investors, not groups.  We can search for them on the internet, but there are as many scam artists as there are legitimate investors, so we have to know where to look.  Once we find someone, we want to make sure they are only interested in the return on their investment and not in having a controlling stake in the company.  This would all be handled through a corporate attorney, who would draw up the contract between us and the investor.  We would establish a set yearly rate of their investment that we would pay them back, and determine an end amount if possible.  Dealing with a corporate attorney will be expensive--probably between $500 and $2000 at the least.  But if all goes to plan, we'll already be on our way at that point and will make that back 10 times over quickly.  To attract these venture capital investors, the business plan is everything.  And it all will rely on certainties (as in real numbers, statistics).  We will need to know why churches and organizations will want to buy videos or hire us for web design, and have research on the amount of such organizations that want new media but can only afford a certain amount, which we will accommodate.  So we'll need a lot of information, but it will need to be concise in presentation, and we will have to be able to back it up with market research (ex. demographics).  In addition, a timeframe for the return on investment will be required, so that they are assured that we're serious.  A breakdown of what we're asking monetarily is also a must:  we'll need money for miscellaneous business/office costs, advertising costs, website hosting costs, living expenses (so they know we're pouring all that we have into this), and reserves in case things don't move as quickly as we would have liked at the beginning.  The business plan is so important not just for the investors, but for us as well.  Once we decide on our goals and our strategy to reach them, they must be put on paper in the business plan for ourselves.  Having it written out will be helpful in a psychological sense, and we should keep copies of it all over the place as a constant reminder and as motivation.

Once we can afford to start basic advertising, we need to design a cool postcard as a mail-out, which we can send to all of our potential clients.  Jake referenced a national company that can give us all the addresses we'll need, and even sends the mail-outs at discounted postage prices, and he will get me the name of that company when he finds it.  If we can, we'll need to address them to the worship arts/media person at each place.  The reality is that only about 2% of these mailouts will even be read, but if we follow up with phone calls to each one, that number of effectiveness jumps up to about 15%.  This 15% is the group we want to schedule meetings with, and we'll take them a little media kit and demo reel of what we can do, along with some additional information about who we are.  Again, once we make some deals, we want to push word-of-mouth at every opportunity, because everyone has some connections somewhere.

So with all that said...

We need to start doing work under the name of Breakwater as soon as possible, which means we might need to start thinking business cards.  And we also need to streamline our business, probably just to web design and small video projects (once the equipment is acquired).  Then we can start thinking about more involved projects, like videos for the International Missions Board and the Southern Baptist Convention in other languages, so they can be used over and over again in a lot of different places.  Just a thought, one which would be very effective for both spreading the Gospel and for our business.

One miscellaneous note:  Jake recommended a great book on advertising by one of the nation's top advertising exec's:  "Hey Whipple, Squeeze This".  It might be a good idea for all of us to check it out.  Libraries will probably have it.

Let me close by encouraging you with a challenge.  I know that in the back of your minds, somewhere, you're probably thinking that this will not actually ever happen, but it's just fun to think about.  If this is really something you want to do, you've got to fight that thought.  I have decided for myself that this is what I will be doing, in some form or another, so I'm not going to let it slip away.  As difficult as it sounds right now, if we just stay together on it and keep from being distracted as best as we can, we'll be at step 2 or 3 before we know it.  We're not going to be insanely rich for a while.  If you want to be financially safe now, that's what accounting and law and pharmaceuticals are for.  But if you want to do something out of the ordinary, and enjoy what you do no matter what it takes to get there, all it takes is deciding for yourself.    No matter what it takes, I will not be working an 8-5 desk job in 10 years.  I am going to be a founder of a company that is creative and a fun place to work, but is serious about its business and quality, most importantly for the value of reaching people for Christ.  Just imagine how in 25 years people will come up to us asking how we did it, starting from nothing after college and building into such a meaningful organization.  If we are decisive, great things will happen.  To reference a Biblical example, look at Elijah.  He stood alone on a mountain, surrounded by prophets of Baal.  He made a decision not to let the pressure influence him, not knowing what the result would be.  In standing up for God, in making a decision, a whole nation ended up following him.  If we can obtain that same inspired focus and decisiveness, we will be unstoppable.  So think about it and don't let me talk you into doing something you don't want to do.  But if you want to go for it...