Wow, it’s been a year since I founded Twinkle Toes Software. I thought this would be a good time for me to stop and reflect a bit on how its going and what I’ve learned.
The Zero Entry Pool Approach
Am I a “zero-entry” entrepreneur? I’m sure there are countless ways to approach starting a business. For me, I decided against diving head first into it and instead opted for what I’m calling a “zero-entry” approach.
Have you been in a zero-entry pool?
This has a gradually declining entrance that allows you to enter the pool at your own pace. Compare this to a diving board, where you have very little control over the speed at which you enter – and there’s no turning back. I’ve taken the former approach to launching Twinkle Toes Software. At this point I’m about waist-deep 🙂 And this is what I’ve learned.
So… How’s It Going?
Thanks for asking! It’s going well. Interest in Booked Hosting is strong, as is the interest in custom development. Surprisingly, there hasn’t been much interest in our enterprise support services. Our community support is incredible, so I guess I shouldn’t be all that bewildered.
What I’ve Learned – Get Your Ducks In a Row
If you’re going to start a business, whether it’s a sole proprietorship (like Twinkle Toes), an LLC, S Corp, whatever, get those ducks in a row.
The Legal Stuff
First of all, I’m not a lawyer and this isn’t legal advice, so consult an attorney for all legal matters. Every state and business type has their own set of rules. Find out what yours are and follow them. Better yet, hire an attorney to help you or use a site like LegalZoom (I don’t use LegalZoom and have no affiliation with them). There are different advantages and rules that go into different business registration types. Find the one that makes sense for you.
The Small Business Association here in the US has a lot of great advice and tools for launching your business. Definitely check that out.
Get your company registered with your state, city and county municipalities. Get an EIN and keep your social security number out of all records. Keep your personal and professional identities separate – your business is one thing and your personal life is another. The more you keep these isolated from one another, the better.
Make sure you have the right insurance and make sure you have enough of it. If you keep your business legally separate it can be difficult to jeopardize your personal finances in the event that legal action is taken against you. That said, you want to ensure you have insurance that offers the right amount of protection for your situation.
Set Up a Professional Web Presence
If you have a website that looks like it was built by a kid you will miss out on business. Really, would you give your money to a business that does not present themselves in a professional way?
Unless you’re a web designer, don’t waste your time building your own web site. Joomla and WordPress are readily available and there are thousands of themes available, most at a nominal cost. Set it up and spend your time focusing on content and marketing rather than design.
Keep Track of Every Dollar Coming In and Going Out
Keep business expenses and income separate from your personal accounts. Set up a separate bank account if you want to be safe. Taxes are not fun. Taxes are even less fun when you’re reporting for your business, too. Hire an accountant if you are pulling in enough money to make it worth the cost. Otherwise, use an accounting package. I’ve heard good things about QuickBooks, but I’ve never used the software.
I do use Wave and would highly recommend them. The software is web-based, so it is available anywhere. This is great when you’re not in front of your primary computer or need to capture transactions on the go. They provide quoting, invoicing, accounting, credit card payment processing and more. Amazingly, it’s also free (aside from the credit card processing, which runs at a reasonable 3%).
Different business types have different accounting rules. Know what those rules are and follow them. If you’re going all in and will be self-employed make sure you know when and how to pay your taxes. Actually, just hire an accountant. My guess is that you’re not a tax or finance expert so find someone that is.
Analyze Your Web Traffic
The more you understand your website’s audience, the more effectively you can tune your website. Google Analytics makes it trivial to capture and analyze your web traffic. See where people are coming from, their navigation path, how long they stick around, etc. This is crucial information to help keep an eye on the effectiveness of any marketing campaigns or call to action sections of your website.
It’s Hard Work
Take That Estimate and Double It
I don’t know anyone who started their own business thinking it would be easy. I believed it would be a lot of work, but I was wrong. I underestimated how much work it is. Be prepared to be working long days. Set these expectations with your family. You absolutely need their support if you’re going to be successful.
Also, set realistic timeline expectations with clients. Don’t promise to turn something around in a few days when you know you need weeks with your current workload. You can attract a lot of clients by promising quick turnarounds, but you’re going to lose them and your reputation will be tarnished if you can’t keep your promises. In my experience most clients want things delivered immediately, but understand and accept longer estimates. Be honest and deliver and you’ll build a loyal client base.
You Will Probably Lose Money
There are very few business that launch and immediately turn a profit. Be prepared to lose money for months, maybe even years. You may never make money. Something like half of all new businesses fail in the first few years.
What does this mean?
If you’re quitting your full-time gig for this then have enough in your savings to live off of for at least a year. If you’re doing this part-time then be ready to invest a lot of your free time and money. Find investors if necessary.
Booked was in the marketplace for 10 years and had a reputation as a successful open source product. Even with that history, I’m barely turning a profit. I lost money during the first 6-7 months after the Twinkle Toes launch.
But It’s Fun
I’m having a fantastic time running Twinkle Toes. Yes, it’s a lot of work but it’s work that I am passionate about. Booked Scheduler is very close to my heart and being able to dedicate time to it while making a little bit of money feels great.
What Did I Miss?
Anyone have any other tips? Let’s hear about your experiences launching a business or product!