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previous: Mark Hammer ...you started up your business?... -- 4/17/2003 8:48 PM

Re: What's the one thing you wish you had known before...

4/19/2003 3:20 AM
LFOscalator	Re: What's the one thing you wish you had known before... I have not been involved in any music related businesses but have been involved in several non-music related small business startups. First thing I learned is that learning never stops. You will always be researching an answer to something. Another thing is that you need to have a business plan that indicates exactly when you expect to become profitable. Steward your progress against the plan. Be sure to have clearly defined profit, revenue, and production goals before the business starts. If you have partners, make sure everybody agrees on the milestones and objectives. Have a clear contingency plan on liquidating the business early on if things immediately don't turn out and if it becomes apparant they won't turn out any time soon. It's not a crime to bail if things are not working. Ninety percent of all businesses fail. Be realistic about this fact so that you can move on and start another business that works. Don't fall into the mistake of throwing good money after bad. Cut your losses early and move on. Personally I always want to be profitable at startup. If this is not possible, then being profitable within six months is my worst case tolerance. This assumes that it's my money financing things. If it's someone else's money then it's their call and I don't care unless a significant amount of my time is required. I was involved in one small startup where everybody had a different idea of what defined success to the business. Needless to say, goals for the business were meaningless. Eventually lack of planning ruined the company. Some people lost significant money in the process. Fortunately for me, I got bad vibes early on in the process and contributed "intellectual property" rather than money. I came out OK. If your partners are not serious about planning, then structure the deal in a way to minimize your own personal financial loss. Finally, make sure all your partners are on the same page regarding proactively pursuing protection early on against potential legal liabilities. LFO

4/19/2003 3:20 AM

LFOscalator

Re: What's the one thing you wish you had known before...

I have not been involved in any music related businesses but have been involved in several non-music related small business startups.

First thing I learned is that learning never stops. You will always be researching an answer to something. Another thing is that you need to have a business plan that indicates exactly when you expect to become profitable. Steward your progress against the plan. Be sure to have clearly defined profit, revenue, and production goals before the business starts. If you have partners, make sure everybody agrees on the milestones and objectives.

Have a clear contingency plan on liquidating the business early on if things immediately don't turn out and if it becomes apparant they won't turn out any time soon. It's not a crime to bail if things are not working. Ninety percent of all businesses fail. Be realistic about this fact so that you can move on and start another business that works. Don't fall into the mistake of throwing good money after bad. Cut your losses early and move on.

Personally I always want to be profitable at startup. If this is not possible, then being profitable within six months is my worst case tolerance. This assumes that it's my money financing things. If it's someone else's money then it's their call and I don't care unless a significant amount of my time is required.

I was involved in one small startup where everybody had a different idea of what defined success to the business. Needless to say, goals for the business were meaningless. Eventually lack of planning ruined the company. Some people lost significant money in the process. Fortunately for me, I got bad vibes early on in the process and contributed "intellectual property" rather than money. I came out OK. If your partners are not serious about planning, then structure the deal in a way to minimize your own personal financial loss.

Finally, make sure all your partners are on the same page regarding proactively pursuing protection early on against potential legal liabilities.

LFO