In 2015, I took the leap and started an e-commerce apparel company called Rockridge. Our brand was conceived with the desire to create affordably priced menswear essentials manufactured in America. After receiving positive feedback from friends that we had a good idea, we were ready to go off and start sourcing fabrics and manufacturers. However, after speaking with a supplier and being asked if we had a resale certificate, which we didn’t, we realized that we missed a couple of important steps. This is about those first critical steps.
Establish Your Name
If you Google search “first steps to start a business” your search results will include writing business plans, step-by-step guides, and how to start a business with as little money as $100.00 dollars. Please disregard these search results. The first thing you should do is write down a list of 10 possible names you would like to name your business and then check to see if the URL and social media handles are available.
As a fashion brand, the most important asset is your company’s name. There are free sites like namechecklist.com or knowem.com that can help you accomplish this task quickly. From the very beginning, we were committed to the name Rockridge, as it has a special meaning for us. We correctly assumed that the name would not be available so we added “sf” to the end signifying that we’re based in the San Francisco Bay Area. We were able to secure rockridgesf.com as our domain name and for our social media accounts.
Secure Your Attorney and Accountant
If you are committed to building an enduring business then your next step should be to hire an experienced attorney and accountant. There are a number of reasons you should have an attorney and an accountant. Above all, the most important is to minimize any risk that could jeopardize your business. An attorney is someone who can review, draft, summarize and file your legal documents. These documents can be anything from trademark application filings, articles of incorporation, non-disclosure and/or freelancer agreements. Lawtrades.com is a great website to find attorneys by specialization, and you have the flexibility to pay by the project or hourly.
Every business owner lives by this maxim: Cash is King! Cash is the lifeblood of any business. Manage your finances correctly and you can purchase supplies and attend tradeshows. Manage them incorrectly and before you know it your business will fail. Studies have shown that 80% of small businesses fail because of mismanaging their cash flow. A good accountant will keep you out of trouble, help you control expenses, and keep down costs. Accountants help navigate state and city regulations, compliance requirements, and prepare and file your company’s taxes.
When you are starting out, you are very busy and are stretching yourself thin by wearing many hats. You’re already your own secretary, marketer, designer, sourcing specialist, and customer service department. This issue compounds itself when you are also managing important tasks that require greater focus and might be outside of your core competency. The right attorney and accountant will not only save you time but also help make your growth easier.
Set Up Your Corporate Entity
Most people will recommend that this next step be your first, but for the reasons outlined above it should be your last. Setting up your corporate entity is a process that should only be completed with the consultation of your attorney. Though there are online options like LegalZoom.com and Bizfilings.com, deciding the type of legal structure that’s best for your business shouldn’t be completed with a simple online questionnaire. The reason for this is because filing as a LLC, S-Corp, C-Corp, sole proprietorship, partnership or corporation has an impact on how much you’ll pay in taxes. IT will also determine how you can raise capital through investment and the amount of paperwork your business is required to file throughout the year.
There are many benefits to incorporating. The most obvious ones are that you protect your personal assets, have easier access to capital and investment, and tax benefits. You can also open a business checking account and apply for credit apart from your personal accounts. You can apply for a resale certificate and purchase your raw materials without paying local sales tax. When you are buying large quantities of fabrics, zippers or other kinds of materials this is a huge cost savings. We’ve used our resale certificate to purchase fabrics, hangtags, labels, and buttons. Incorporating your business and setting up a corporate bank account is a huge step toward building a long lasting company.
Never Settle
Richard Branson once said, “You don’t learn to walk by following rules. You learn by doing, and by falling over.” Starting a business is no different. My experience building Rockridge has taught me a few lessons that I’d like to pass on to you. The path to success is by not skipping any steps. Build your team with people who are passionate, smart and have strengths that compliment your skills. Know the difference between being frugal and cheap: packing your own products for shipping is frugal, being unwilling to pay the expense for an attorney or accountant is cheap. And lastly, don’t be embarrassed or afraid to ask for help. That’s what friends and mentors are for. I hope this provides some helpful information for those who are beginning or who are already on their journey of entrepreneurship. Never settle.
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