Manage your IP well

One afternoon I was talking to a friend of mine about our Business Processes, Training Processes, and some of the technology that we had developed to help us in our business.

Suddenly he piped up ” I hope you are putting a value to all this. This is your intellectual property”.

That got me thinking. As a startup you dont think about these things. Yet you are unconsiously building up knowledge as you go along. Its this knowledge that helps you do things better the next time, give your customer a better service, or help you do your work faster. That if you think about it, is your Intellectual Property.

Some tips:

1. Document the things that you do however trivial it might seem. These could be quality processes, sample work, customer feedbacks.

2. Keep all the documentation in an easily accessable place. More importantly use it.

3. Listen to your co-workers and employees. Sometimes the best ideas come from them.

Your business is special, so is your knowledge.

The End Game

Though things NEVER happen as planned in business, it is good to at least have an “end game” in mind.

The question to ask yourself is “Why am I doing this?”. Your answer will give you the end game you are looking for and allows you to plan better.

Typical “End Games” can be:

1. I want to build a company, sell it and retire.

2. I want to build a company that will succeed like Infosys and linger for generations.

3. I want to build a business that will give me enough money to lead a comfortable life.

It can be anything… but you need one.

Without this you will be like a rudderless ship.

Partners and Partnerships

Too often businesses are started and partnerships are established verbally. “We’ll work out details later” is the common phrase used. Bad idea !!

While no one might want to cheat you, its a well known fact that shares in a company become more valuable as time passes especially if the business is successful. Suddenly issues like “What’s his value?”, “My contribution is greater” start to come up. I have seen so many companies that start out in right earnest and then get into these issues to such an extent that the business goes for a toss. Fortunately I have been lucky in this regard.

So here are some guidelines:

1. Establish shareholding at the very beginning. Holding patterns, Divestment, Exit etc.
2. Clear guidelines on roles and responsibilities.
3. Get an auditor that everyone is comfortable with.
4. Make sure that you have a comfortable working relationship with your fellow founders especially the ones who are involved on a day to day basis with the company.
5. Be professional. Don’t let personal likes and dislikes affect your decisions. Call a spade a spade.
6. Be clear on who handles finances. This issue will cause a LOT of heartburn if its not handled properly.
7. Teamwork is crucial in the initial stages. Don’t take major decisions unilaterally (if you are the only founder, then consult an advisor)
8. Be open to bring in new blood even if it means giving up some equity. Remember 100% of zero is still zero. I’d rather have a smaller piece of a bigger pie.

Of Business and Businessmen

They come in many forms and I have seen them all. Wanting to give you business, wanting to partner with you, wanting to help you scale new heights.

The main thing to remember here is to remember that THERE IS NO FREE MEAL. If something is too good to be true, then IT IS too good to be true.

As a small business you are always looking for business opportunities. However you need to stop and analyze carefully before you jump in. Even if it means delaying your decision. The fist instinct is trust every opportunity that comes your way. Don’t do it. Qualify any lead that comes in and do a credit check. You cannot afford long payment cycles as a startup.

Here is how to identify fraudsters:

1. If someone is looking for any advance payment to give you business. Then there is NO business. If there was business, they would not be asking for an advance. This is a common scam thats employed.

2. If people talk big numbers without proof (you’ll make a million bucks in 3 months), then they are frauds.

3. Anyone looking for minimum amount of paperwork is generally not completely above board. Normally all legit operators have good solid paperwork.

4. If they give you an Non-Discolsure that looks like its been cut and pasted (and its easy to see that), show them the door. Don’t sign any agreement that has verbiage that will prevent you from continuing your business. Have a lawyer whet each one. I know it costs money but its worthwhile in the long run.

Look at any opportunity with a long term view. No shortcuts.