Entrepreneur 101 – Nathan Lustig

I decided to create this page because I had to learn this stuff when I started my first two businesses and wanted to share what I learned. I haven’t found anything else that had a comprehensive list like this, so hopefully, this will be helpful to others. Updated 4/30/10.

Entrepreneur 101 Required Reading/Viewing List

Blog Posts

13 Sentences – Paul Graham
How to Start a Startup – Paul Graham
What Startups are Really Like – Paul Graham
18 Mistakes that Kill Startups – Paul Graham
The Top Ten Lies of Venture Capitalists – Guy Kawasaki
The Top Ten Lies of Entrepreneurs – Guy Kawasaki
9 Business Selection Criteria – Fabrice Grinda
Top 10 Geek Business Myths – Ron Garret
My Rules for Startups – Mark Cuban (I agree with everything except the PR firm)
The 3 Advantages of a Startup – Mark McGuire
Compilation of Best Startup Advice

My Posts

Videos

These videos are not specifically entrepreneur how to videos like the articles above, but they help you think like an entrepreneur.

Malcolm Gladwell on Spaghetti Sauce – Malcolm Gladwell
How to Live Before You Die – Steve Jobs
Once Upon a School – Dave Eggers

Books

Freakonomics– Stephen Dubner and Steven Levitt
SuperFreakonomics – Stephen Dubner and Steven Levitt
The Tipping Point – Malcolm Gladwell
Outliers – Malcolm Gladwell
The World is Flat – Thomas Friedman
The PayPal Wars – Eric Jackson
Made to Stick – Chip Heath

Entrepreneur Resources

This is my list of resources that I have used in my businesses that I have found useful. Full disclosure: Although some of the providers have affiliate programs and I earn a commission on some of these if you decide sign up, I would not have included these companies on my site if I didn’t use them myself and think they were the best choice.

File an LLC

LLCs are the easiest way to get started and can be done online in Wisconsin. Some people (mainly VCs) will say that they prefer S-Corps or other business structures, but LLCs are the easiest and usually the best of new businesses. It takes about 10 minutes and costs $130. Each year, you have to pay $25 to keep the registration current. You can have a legal business without ever leaving your desk and you can switch to a new structure fairly easily.

Get your Tax Id (FEIN)

You will need to get a Federal Employer Identification Number to go with your LLC and you can apply online on the IRS website. It usually takes about 10-15 minutres. A FEIN is just like a social security number, but for your business. You will need your FEIN to set up your business bank account, credit card processing a ton of others.

Free Business Bank Account

You will need to get business bank account to keep all revenue and expenses separate from your individual accounts. You legally need to do this for accounting and tax purposes, but it also just makes good business sense. When you go to the bank, you will need a driver’s license, a copy of your LLC papers from the government (print these out from their website) your FEIN from the IRS and an initial deposit.

You should look for a bank within walking distance of your house or office so that you can stop in easily. You should also look for free accounts. Most banks will give you a free business account with good online banking access. I have used Chase, US Bank and UW Credit Union. UW Credit Union is the easiest to set up, but does not offer all of the services that a larger bank may offer. If your business is simple or you don’t envision much complexity to start, I suggest check out your local credit union. They should have a totally free business bank account.

I liked US Bank’s business bank account, as it is free, but their online banking website is not the greatest. Chase has great online banking, but seems to be a bigger company and tries to charge fees if it can. Chase refunded all of my fees that I incurred, so I can recommend them in good conscience, but be wary about any bank that tries to charge you fees for a business account. Especially in today’s economy, banks should be competing for your business (account).

Credit Card Processing

Getting signed up for credit card processing can be confusing. Here’s how it works. In order to accept credit cards online, you need to have two accounts. First, you need access to a payment gateway, which acts just like the point of sale card machines you see in the grocery store or restaurants. Your payment gateway is the virtual version of the traditional point of sale machine. I’ve always used Authorize.net. Your payment gateway will charge monthly fees, usually between $10-$30 per month. Some places will try to charge you an activation fee of $99 or more.

Second, you’ll need a merchant account, which is a special type of bank account that allows you to accept credit card deposits. You can get one through most major banks or through any of Authorize.net’s resellers. Merchant accounts charge processing fees: a flat fee of between $.10-$.30 per transaction and a percentage fee, usually between 1.5%-3%. Additionally, American Express charges a higher rate, usually between 3.5%-4.5%. This higher rate is why many businesses do not accept American Express.

You can sign up for these accounts many different ways, but it is the exact same service no matter where you sign up. I’ve found that companies with name recognition (Chase, US Bank, Authorize.net etc) charge higher fees. You can go to any company on this list of resellers, but I’ve had good success with Bank Card USA, as they have waived many of the fees and given me a low transaction fee rate.

You can use Paypal or Google Checkout for simplicities sake, but these usually have higher fees and require you to take users outside of the payment process.

Register Your Domain

I’ve always used GoDaddy for registering my domains. If you use GoDaddy, I’d suggest signing up for a 1 year registration period. Never pay full price. Follow this link to get $7.49 GoDaddy domains instead of paying $10 or do a google search for godaddy promo codes.

Web Hosting

There are tons of web hosting options out there for your needs. You can set up your website using a free WordPress account that you host on your own server or with a cheap shopping cart website from my favorite online shopping cart company, Shopify. Shopify allows you to set up your own online retailing website without having to know any programming. If you have a product to sell, Shopify is a great choice.

If you want to program your own website or host the site on your own server, your main options are shared hosting, Virtual Private Server (VPS), or a dedicated server. Shared hosting is the cheapest, followed by VPS and a dedicated server. I’ve used Dreamhost, Rimuhosting, and Slicehost. This blog, along with a few other sites I own, is hosted on a virtual private server at Dreamhost for $9.95 per month.

Get Email @yourdomain

One of the biggest credibility builders you can have is an email address from your own domain. I’ve used Google’s Apps for Domain for a bunch of my sites and recommend it highly. It’s free and easy to set up. You use gmail’s interface, but instead of being @gmail.com you can create as many accounts as you’d like @yourdomain.com.

You should create multiple email addresses to make yourself look like a larger company. For example, you can have [email protected], [email protected], [email protected], [email protected], etc.

If you already have a gmail account that you use for non-business purposes, you can forward all of your new google apps for domain email to your old gmail account. Use gmail labs multiple inboxes and go to the settings menu so that you can send email from multiple accounts from your gmail account. You will be able to increase your productivity and email response rates this way.

Automated Hard Drive Backup

An automated hard drive backup system is a lifesaver if your computer crashes or is stolen. You put a program on your computer and it runs in the background, automatically backing up any file on your computer. It is great for getting new computers, too. I recommend using Mozy. You can also get started with a free plan that gives you 2GB free.

Lawyers

It is extremely important to get good legal advice when you are starting your business. You should try to find a lawyer who will either give you a discounted hourly rate, or be willing to defer payment until later. You might also try to trade equity for services, but you shouldn’t give a huge amount of equity for these services. In Madison, I’ve used Neider & Boucher and would recommend the firm to anyone in the area. If you are from out of state, I would look for experienced, small to medium sized firms who are willing to give discounts for new businesses and startups.

Mentors

Finding mentors was one of the keys to both of my businesses. If you are in the Madison area, look into MERLIN Mentors, a Madison based program based on MIT’s Venture Mentoring Service. If not, I’ve heard good things about TiE and the Kaufman Foundation’s list of mentors.

Google Docs, Google Calendar

I’ve used Google Docs to manage all of my business documents. I can access them from anywhere, share them with people and edit anytime. Google Calendar is worth using as well. You can share multiple calendars, get email reminders and notices to your phone.

Get Business Cards

You never know who you will run into, so carry a few business cards with you at all times. Try to make your card stand out from the bunch if you can. I’ve always bought business cards from my local print shop, but there are a ton of places where you can get free or cheap business cards online.

Join Networking Groups

Try not to join places that force you to pay, but make an effort to meet people in your area. If you are in Madison, check out Capital Entrepreneurs. If not, look for similar entrepreneurship networking events in your area or consider starting your own.

Logos and Graphic Design

Depending on your business, graphic design might really matter or not matter at all. If you are a web startup, I think you should spend money/time finding a good designer, but if you are smaller or are just looking for a logo, check out Crowdspring. You post your project and how much you are willing to pay and anyone can submit a logo. I’ve used it for package design, logo design and a few other things and I’ve been happy with the results.

Accounting

First, get a copy of Quickbooks. Next, find a local accountant and pay for an hour of his/her time. Ask for a a free consultation, but be ready to pay a discounted rate. Get familiar with basic accounting and basic tax forms.

Enter Business Plan Competitions

Entering a business plan competition was a huge help to both of my startups. You have to think about all sorts of issues and present to a group of strangers. Many times the judges are the first neutral people who hear your in depth pitch. Business plan competitions are a great proving ground to hear what people think about your business and force you to think through more issues that you would otherwise. The Burrill Business Plan Competition at the University of Wisconsin is the best one I have been a part of. The Governor’s Business Plan is good and my partner Jesse Davis was involved in Northwestern’s Entrepreneur Idol and thought it was a good experience. Don’t be afraid of the competion: check out business plan competitions in your area and enter.

Social Media

Sign up for a Linkedin account and fill out your profile. Make it as professional as possible. Add people as you meet them and use Linkedin to connect with people outside of your network. Here’s my profile. Create a Twitter account and Facebook page for your business, but only if you intend to update it regularly. Make sure your Twitter, Facebook and company blog all have the same messaging.

Blogging Software

If you want to create a blog, I recommend WordPress. It is a versatile, easy to use platform that can be used for things other than just blogs. This blog runs on WordPress, but so does my informational site for Entrustet. You can create a solid website using WordPress without much technical skill. Here’s a list of the plugins I use on this blog:

Simple FB Share Button – Includes Facebook Share Button
Topsy – Includes the retweet button
Similar Posts – Displays similar posts automatically
PostRank – Rates my posts according to internet popularity
Easy Contact – Automatic contact form
Subscribe to Comments – So users can be notified about new comments
Akismet – For automatic deletion of spam comments
WP Follow Me – The follow me on Twitter on the right hand side

Analytics

Google Analytics is a free program that allows you to track all sorts of information about your content and the visitors who come to your site. You can see where your users come from (website and physical location), how long they spent on each page and all sorts of other interesting information. Make sure you install it on all of your sites.

SSL Certificate

If you are handling any sort of sensitive information, you will need a Secure Socket Layer (SSL) to encrypt the data. There are two main providers: Verisign and Thawte and both are owned by Verisign. Thawte was acquired by Verisign in 2000 and provide basically the same services, yet Thawte is significantly less expensive. The big difference is marketing. Customers recognize Verisign’s logo more often than Thawte, so unless your complete focus is security, I suggest going with a Thawte SSL and save the money to start.

Online Advertising

There are two types of online advertising, CPM and CPC. CPM is how much you make (or pay) per thousand impressions (ad views). CPC is how much it costs for each click. Generally, if you are buying ads, you want CPC if you are trying to sell ads, you’ll want CPM. When you are just starting out, Google Adwords is the best CPC bet. I had good results with Adify for CPM based ads. I always include a mix of both CPM and CPC ads.

Conference Calls

An easy way to do conference calls is Free Conference Call. You can invite people to a call at a specific time and send out email invites. The service works really well and lets you seem larger than you really are.

Email Marketing

I’ve used Constant Contact for email blasts, but felt it was a bit expensive. I am currently using Ratepoint, but got it for free. I really like the service, but am not sure how much I would pay for it. It is great for sending out emails, surveys and getting great feedback on customer interaction and interest.

Office Space

It’s always tough to figure out when to make the jump from working from home and in coffee shops to moving to a real office. I recommend starting off from home and moving to an office after waiting as long as possible to keep costs down. When it is time to look for an office, search for places within walking distance of where you live. You should start by talking to any startups in your area that might have extra space that they would like to rent out at a discount rate. Next, check with service providers. If you end up with an office in a startup or a service provider, you’ll have the added benefit of being able to ask questions and brainstorm together from time to time. Check out To Office or Not to Office for the full explanation.

Help A Reporter Out – HARO

HARO is a free way for you to get PR about your area of expertise. You sign up for the HARO emails and receive 3 per day. Each HARO email has about 50ish requests for experts and sources from journalists who need information for stories they want to write. I’ve seen reqeuests for sources from national publications, magazines, tv shows and other high influence publications, as well as smaller blogs looking for good stories. If you see a request for info where you have expertise, you create a pitch in your HARO account and it gets sent to the journalist. If the journalist thinks you’re a good fit, she will get back to you either by phone or by email.

You should subscribe to HARO just for the entertainment that comes from reading about all of the different stories that people are looking to write in the near future and from the intros to each email. If you sign up, make sure to check out the founder Peter Shankman’s blog post about how to use HARO correctly.

HighRise – 37 Signals

37 Signals is a good company to know, even if you only read their great corporate blog. They create really simple productivity tools that help you get things done. We use HighRise to manage all of our contacts for Entrustet and it’s really inexpensive, about $15 per month. You should start using a spreadsheet for your contact and task management, but once you get over about 50-75 contacts that you need to manage, check out HighRise. 37 Signals also puts out a great checklist management program as well as Basecamp, Backpack and Campfire, which are other great tools to check out.

Get Satisfaction

Get Satisfaction lets your users tell you what they like, don’t like and would like to see improved on your website. It is also a community based customer service program. For example, if someone has a question about how to use your service, they can ask it on your Get Satisfaction community and anyone of your users, or you, can answer the question to provide the answer. I’m not using it now, but have used it with clients in the past. At $15 per month, it is a great solution as soon as your startup or company starts to grow and gain users.

Wufoo

Wufoo makes creating forms easy and makes the forms themselves interesting and fun. We’ve only experiemented with their free version, so I can’t comment on the paid versions, but check them out if you are creating forms.

Networking

I know I talked about networking in the original post, but I can’t stress enough how important it is to talk to others in your community. Social media is a good starting point, but real relationships are made with face to face meetings and phone calls, not 140 character tweets or even emails. You can use social media to augment your relationships, but there is no substitute for getting out there and talking with people.