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Vintage threads from the first ten years

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

4/17/2003 8:48 PM
Mark Hammer	What's the one thing you wish you had known before... ...you started up your business?

4/18/2003 5:57 AM
Regan	I'm not in the pedal or amp business, but here's a piece of wisdom gained from a disaster a few years ago. DO NOT GO INTO BUSINESS WITH A FRIEND!!!!! not if you want to stay friends anyway. Regan

4/19/2003 2:28 AM
LFOscalator	I agree with you. Another way of looking at it is that it is OK to go into business with a friend as long as you realize you may need to redefine the friendship fairly quickly in the process. Keep in mind that many business partnerships work extremely well. The partnering of Bill Gates and Steve Balmer is a classic example. Gates was quoted in a magazine as saying that Balmer to this day is his best friend, despite going through many trials and tribulations. I find that good people tend to have strong personalities and larger than average egos. Not necessarily a bad thing. You just want to make sure you both have thick enough skins not to hold onto things that should quickly be forgotten. In other words, stay focused on business rather than personality. LFO

4/19/2003 2:28 AM

LFOscalator

I agree with you.

Another way of looking at it is that it is OK to go into business with a friend as long as you realize you may need to redefine the friendship fairly quickly in the process.

Keep in mind that many business partnerships work extremely well. The partnering of Bill Gates and Steve Balmer is a classic example. Gates was quoted in a magazine as saying that Balmer to this day is his best friend, despite going through many trials and tribulations.

I find that good people tend to have strong personalities and larger than average egos. Not necessarily a bad thing. You just want to make sure you both have thick enough skins not to hold onto things that should quickly be forgotten. In other words, stay focused on business rather than personality.

LFO

4/19/2003 3:20 AM
LFOscalator	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

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

4/20/2003 4:49 PM
Carl/Zwengel Amps	Whatever amount of startup capital you think you'll need, no matter how much calculating you've done, quadruple it! I'm serious. If I had to do it all over again, I'd have tried to secure a cool 1/2 million! As it is, when I went into the mfg end, I borrowed 100k, 100% collateralized with personal and business assets, and I've been scrambling for extra cash ever since. Being cash soft is absolutely crippling. There are so many unforseen expenses that will creep up and bite you in the ass it's amazing. Carl Zwengel Amplifiers http://www.zwengelamps.com

4/20/2003 4:49 PM

Carl/Zwengel Amps

Whatever amount of startup capital you think you'll need, no matter how much calculating you've done, quadruple it!

I'm serious. If I had to do it all over again, I'd have tried to secure a cool 1/2 million! As it is, when I went into the mfg end, I borrowed 100k, 100% collateralized with personal and business assets, and I've been scrambling for extra cash ever since. Being cash soft is absolutely crippling. There are so many unforseen expenses that will creep up and bite you in the ass it's amazing.

Carl
Zwengel Amplifiers
http://www.zwengelamps.com

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