Brain Storm print by Grayhood
Last week I attended the DC Week conference (and recommend it to you for next year!). While many of the sessions were geared toward developers and non-profits and didn’t apply to my business exactly, topics like social media, search engine optimization, tax and legal tips, and managing companies drew me in. So this week I thought I’d share a little bit about what I learned, starting with one by Clarity Law Group titled “Top Ten Tips for Staring a New Business.”
The Washington Post interviewed presenters Sue Wang and Leah Goodman for this article, which is a great summary of the session. I thought I’d also share my own notes… a combination of things I learned last week and things I learned while incorporating my business this summer. This is by no means an extensive list, and y’all know I’m not a lawyer. So get one and talk to him/her to get the facts. Lawyers are expensive but necessary, and can help prevent big problems.
You might not own a business where people are likely to trip and fall, and in my case a paper cut is probably the worst that could happen to my clients. But as designers, it’s important to protect ourselves against the complicated world of intellectual property law (see this recent Design*Sponge post), and for that reason (and other really important reasons, like protecting your property and assets), incorporating might be a really good idea. I mentioned you should talk to your lawyer, right?
GET A CORPORATE BANK ACCOUNT
It’s important to respect the difference between the company’s money and your money, especially in the event that you have to prove that in court to uphold your “corporate veil” (basically, to protect your assets regardless of your corporate status). This will also prevent total meltdowns come tax time. Trust me.
Another way to respect the difference between the company and yourself, and respect your role in the company, is to hold annual meetings where you elect officers, have official annual reports, and document big changes like shareholders or a change in your business location (not an extensive list, I’m sure). All of this should be held in a notebook, preferably the fancy leather embossed ones your lawyer can order that make you feel legit. This applies even if the company simply consists of you.
I’ll be the first to admit I know nothing about this one, but I learned a few helpful tips at last week’s conference. If you’re accepting investors, including family and friends, remember that you don’t want to be stuck with bad business partners for life. Shares in your company should be closely held… if you think a 1% share is a nice and small thing to give a dedicated employee, for example, think twice! You’ll have responsibilities to your shareholders regardless of what percentage of the company they own, and getting rid of them is easier said than done. If you do want to give someone equity in your company, talk to your lawyer about investment schedules.
GET IT IN WRITING
Always! Whether you just hired a friend to do a few hours of work, your first full time employee, or started a project with a client… make sure you’ve got it all in writing. You’ll want to sign contracts with the company name, not your name, and your official title.
CONTRACTS & GETTING PAID
One thing I’ve learned from experience: don’t sign a contract without having a lawyer look it over. I’ve made this mistake once, and won’t be making it again! You know what they say about assumptions.
As far as payments, be sure to split them into deposits or advancements, so if things go south you won’t be out the full contracted amount. Have an invoice policy in your contracts, listing due dates and what happens if they are missed. Explain late fees and interest policies, and if a collection agency is required, your client should have to pay the collection costs.
ASK FOR HELP
Think lawyers, accountants, business people, and mentors. Help is good! And not everything you read online is true.
A big thanks to Sue and Leah, not to mention my own lawyer, who allowed me to feel super proud last week when I realized I already knew the “top ten business tips,” and more.
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Howdy Do It came from “how do you do It,” the question Ellie & Margot found themselves asking about their freelance lifestyles, and so Howdy Do It was born, a column about the things we do to keep ourselves organized, inspired and on track.