6-10 (Accountants to Patents)
Link: 20 startup tips
CONTINUED FROM PREVIOUS POST
6. thou Shalt Not Hire An Accountant
Dane recommends Quickbooks Simple Start. (An accountant actually recommended I buy this while I was trying to start a business a few years ago.)
7. Thou Shalt Not Get A Loan
Or pursue any other external funding. That's spending money not making it. For a refresher, read this.
8. Thou Shalt Not Hire Anyone
Again, check out my post on home business tips (See number 3). Then read this article by Blanche Evans, editor of Realty Times.
9. Thou Shalt Not Get A Business License
My philosophy on this? You need a business license when somebody knocks on your door, calls you on the phone or sends you an official letter saying you'd better get one. Not before. This doesn't involve cheating the government. You'll be paying your taxes just like you pay them for your day job if you're a sole proprietor. But don't borrow trouble. See the above home business link with special attention to point number one.
10. Thou Shalt Not Patent Anything
…Or trademark anything or copyright anything. Hell, I even have a domain name I haven't used yet! Worry about it once you have a viable business. Many intellectual property rights can be established now with limited paperwork or fees.
CONTINUED NEXT POST
April 29th, 2007 at 7:48 pm
These are all interesting tips, I disagree with two right off the bat. A good accountant can pay for themselves while teaching you about other deductions, tax breaks, etc. that a computer program can’t. Second, don’t patent anything? I can see not paying for unnecessary things, but a patent measn you’ve created something that someone else can steal. A trademark or copyright…those things can be replaced with a substitute logo if someone beats you to it, but a patent? How many unique ideas does one ever create in their lifetime? Please, if you have an idea, no matter how stupid, patent it.
April 30th, 2007 at 9:26 am
Harry. You’re not by any chance a patent attorney are you? Ha, ha. But seriously, some of Dane’s tips may go a bit overboard. The point, I think, is that when you are starting with nothing you should not let the lack of money even to file for a patent stop you. It isn’t so much a question of whether a patent–or incorporating for that matter–is desireable. But many people use these arguments to explain why they don’t have enough money to get started. Also, every expenditure raises the cost of getting that bootstrapped operation off the ground. On the subject of accounting, by the way, I disagree with you wholeheartedly. In fact, the accountant I referred to who suggested I buy the program did so because he handled so many other accounts that he did not want to have to bother with mine. Of course, he wanted me to pay him a fee anyway. I’d suggest that if you take the money you save using a computer program and pay for a family member’s training in accounting, even send a son or daughter to school for it with the money you make from your new business, you will probably get a better return on your investment and a more dedicated future employee for your business venture in the bargain.
April 30th, 2007 at 10:24 am
This is really bad business advice, rising to the level of being criminal! As a successful business owner who often lectures on the subject of start-ups, this level of misinformation is a real disservice to potential entrepreneurs. Why would you advise people not to seek advice from accountants? These people provide a valuable service for folks who understand what they want to do with a business but lack the business background. When starting any business there are plently of legal issues that must be addressed and most people need someone who understands how to navigate these waters.
You also advise people not to open a bank account? Are you aware of GAP accounting laws that do not allow mixing of personal and business accounts? A world of legal troubles await anyone foolish enough to follow this piece of advice.
You mention not incorporting because of the high taxes in PA, but you don’t mention LLCs. This type of business ownership is ideal for small owners because it allows the benefits of sole proprietorship taxes with the limited liability of corporations. People who follow your advice can be on the hook for expenses in excess of their business if it fails. When someone’s forced to sell their house in court, what is their defense? I listened to advice from a website?
The previous poster already addressed the patent issue, but it really sums up the problems with this list. You’re actually telling people not to apply for seventeen years of protection to get a company grounded! Foolishness!
When it comes to starting any business there are plenty of concerns, but this site seems to focus only on doing things as cheaply as possible. That may be practical if you’re only starting webpage projects, but in the real world business expenses exist it sometimes success actually requires you to buy pens and pencils!
May 1st, 2007 at 5:17 am
In fact Dave, LLC’s are explained under point 2 at the link “another alternative” and also on the Pa post linked to earlier on. More response on some of this other stuff in a future post.
May 1st, 2007 at 10:30 am
I agree with the comments above. This is pretty terrible business advice. All these rules can be boiled down to one main point it seems: “Don’t spend money on anything”
Not having a lawyer or accountant is pretty foolish. You need both because they have expertise that you don’t (unless you’re an accountant or lawyer). While Quickbooks is great for ongoing book-keeping and the like, every small business start-up needs an accountant to aid in tax preparation. Like Dave said, accountants can be very helpful and provide great advice and education. Bottom line for me is that you need most of the things that Dane says you don’t. If you follow Dane’s advice, your business is doomed. The idea is to spend wisely on “must-haves” to help grow your business, and as far as I’m concerned, most of Dane’s points are must-haves. I’m glad I’m not listening to Dane’s advice…
May 1st, 2007 at 11:45 am
Actually Shawn, the link under 2 just points the reader to an entry at Wikipedia on LLCs. That hardly explains anything, and furthermore the comment above it still reads “don’t incorporate”. Leaving aside the questionalbe practice of using Wikipedia as a source for business advice, doesn’t using an LLC also violate another commandment? You also argue against using an attorney. Another great piece of business advice! I wonder perhaps if this whole article isn’t really an April fools joke that’s just a month late.