The Rules for Entrepreneurs

Venture Files founder and former curator, Steven Fisher, wrote a series last year that remains one of the best of its time. Even though he has moved on and is working with Network Solutions, I think it’s as important now (if not more so) than it was last year at this time. This is a consolidated (and updated) version of that series.

Pay Yourself First

Over the last 9 years and two startups I have learned many things and screwed up royally in some cases. This series is about providing you best practices of lessons learned and avoiding the mistakes I have already made.

In the past, I have had good years and bad years. When you have employees, they expect to be paid and when you mess with payroll (and payroll taxes, but that is a post for another time) you create such a negative culture that nothing will get done.

With that said, when you are starting your business regardless if it is a service or product company, you will have startup costs and probably forgo paying yourself for 6-12 months to keep growing the business. That is fine and to be expected. What you should not do (and what I did) is keep adding staff and sacrifice your own salary in the name of growth. If you keep going like that and have a bad quarter you will have nothing saved for a rainy day and if the business fails you will probably be in immense debt and got nothing out of the business.

Granted, the balance between growth and cash flow is a tenuous one but it is one thing you should never defer to someone else in beginning. Plus, there is a difference between creating a lifestyle business and an enterprise. A lifestyle business is really making enough money for yourself and having some contractors or 1-2 people that gives you a good salary but is more about freedom. An enterprise is a business that scales and gets big over time but you will be working intense amounts in the beginning but will need to hire those smarter than you with the intention that you are looking for an exit and will have time for freedom when you cash out.

So when you are growing the business you should work the first 6-12 months paying off the initial capital expenses and getting about 6 months of cashflow for yourself before you hire anyone else. Once you have that done, start paying yourself something, even if it is small and will ramp up over six months, pay yourself first. This will get you in the habit of being committed to making the business pay for itself and you so you are not worrying about living month to month and let you find some resources to help you deliver while you continue to sell and grow the business.

Once you are looking at hiring someone use these two rules as a starting basis:

– Have six months of payroll for that person in the bank on top of your salary

– Have 90 days of projects or sales committed for that person to deliver so they not only have something to do but are earning their keep.

You may have to be conservative at first in your growth but in the end you will scale better and create a business that is focused on delivery and customer service without putting you and your employees on a cash flow roller coaster.

The Best (Accessible) Photography on the Web

It’s no secret that I have been getting very active with photography. In fact, it’s been nearly an obsession as I’ve begun maintaining a photoblog of all my best work. I’ve even written about going and getting your first Digital SLR camera, mainly because SLR photography is becoming very accessible and web geeks love sharing their photos.

Obviously, when learning about your camera and the various techniques, you’ll find people who shoot in such a way that grabs your attention and tugs your emotions. For me, I’ve had several photographic geniuses who have influenced my own style. I try to learn as much as I can from these people and have been known to ask questions.

Thomas Hawk

Thomas Hawk is one of my favorite photographers ever. His goal is to publish one million photos online before he dies. He published his 20,000th the other day. Thomas has a wide diversity of “types” of photos, however most of his stuff tends to experiment richly with color, motion, low light and patterns. And mostly in San Francisco, where he lives. For more of Thomas’ photography, check out his Flickr and Zooomr.

Danny Hammontree

Danny is a relatively new photographer to me. His style is distinct. Mainly he shoots black and white photography and his niche is protest/social injustice. Therefore, he likes to capture rallies and protests, as well as tell stories of societal failings. Check Dannys Flickr stream for more of his work.

Brian Solis

Brian is one of my good friends and has taken some of my favorite photos of me. That is mainly because Brian excels at capturing people. Typically, people who are socializing and having fun. He tends to shoot a lot of photography at web networking events. For more of Brian’s work, check out his Flickr stream.

Working the Room

I love Gary Vaynerchuk. He is possibly my favorite person in social media. It could be his New York style, or his common sense, practical content.

Gary gets it. He gets it in a way that very few other people, even in social media get it. I believe this stems from a lack of pretentiousness that drives him. He is who he is, and he’s focused solely on “the hustle” – the drive to build his brand and make money.

When Gary puts out a video, people listen. Because he knows what he is talking about.

We’ve talked a lot about brands and marketing here. I’ve talked about the trust and transparency factor. How if your customers can relate to you, because you’re transparent, they are going to do more business with you. How if your customers don’t trust you, your brand is worthless because you don’t control the value of your brand – they do!

Gary points out in one of his recent videos that brands of the past succeeded on “presentations” – that is ads, and marketing. They went where the eyeballs were. No one ever got to engage with the brand other than to buy the product. But, he argues, brands of tomorrow will succeed by “working the room” and talking to their customers because social media has changed the game.

Enjoy some Garyvee!