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Episode 48: 7 Steps to Launching a Business with Phillip Ramsey and Bryan Dewhurst
143 Plays6 years ago
When it comes to launching a business, we wish we knew then what we know now! We are like many, many business owners in that respect. So we wanted to share some steps, a checklist if you will, for launching a business the right way.
Because thankfully we’ve learned a few things in the past 7 years in business together. In our latest episode, we’ll take you through the ins and outs of launching a business, from deciding on a name to finding the right accounting software and support people.
There are huge rewards in owning a business. It is the most powerful source of residual income because there are so many ways to leverage the wealth that you build as you grow a business.
But too often businesses fail because planning takes a back seat to jumping in and moving everything along as fast as you can. We get it. Businesses are usually born out of a passion, a drumbeat inside that doesn’t go away. Take that passion and build your business on a firm foundation with these 7 steps.
what you will learn in this episode:- Why business is such a powerful source of residual income
- How to pay attention to the drumbeat inside of you
- What the heck a “value ladder” is
- How to lay the groundwork that leads people to your high-level, high-revenue products or services
- How to find “blue ocean” in a marketplace crowded with sharks
- The importance of a cohesive brand and all the legal and creative work that goes into it
- Building client education into your business strategy
- Why corporate structure is such an important business decision
Recommended
Transcript
Introduction to Extraordinary Lives
00:00:02
Speaker
Everyone dreams about living an uncommon life, but how we define that dream is very different for each of us. And for most, it's a lifelong pursuit. Welcome to the Uncommon Life Project podcast. We're going to introduce you to people who are living that life or enjoying the journey to get there. We're going to also give you some tools, tricks, and tips for starting or accelerating your own efforts to live an uncommon life.
00:00:27
Speaker
A life worth celebrating and savoring.
Meet the Hosts: Philip Ramsey and Brian Dewhurst
00:00:30
Speaker
Please welcome your hosts, Brian Dewhurst and Philip Ramsey.
00:00:34
Speaker
Hello and welcome to another episode of The Uncommon Life Project. I am your host, Philip Ramsey. And I am Brian Dewhurst. Thanks for tuning in for another episode. We are so thankful you're here. This episode is going to be really fun for Brian and I because we're talking about starting a business and the seven steps you can actually follow to do so. And I wish Brian and I would have listened to this podcast before we started business.
00:01:00
Speaker
So
Seven Steps to Start a Business
00:01:01
Speaker
let's get into it because I think there's just a lot of people that want to go down this path and they just want some structure to be able to follow and outline to follow. We hope to give you this. Brian, what are your first thoughts when we start talking about this? Well, I think, you know, one of, I want to take it back. So it's synergistic with everything that we're doing. But I think one of the things we're talking about is seven source residual income, the most powerful one in, uh,
00:01:27
Speaker
you know, our opinion, I would say is business just because it's what we've built. And, you know, you look at like a Facebook or a Microsoft, you know, real estate is powerful, but, you know, building a business is a lot bigger. And so anyways, yeah, I think that it's one of the seven sources of residual income. And I think it's where we're having a lot of interesting conversations with people.
00:01:56
Speaker
This is where they get stuck. Yeah. Products and services. Good point. I would say that they really, I mean, just thinking about somebody's passion, you kind of want to start a business.
00:02:08
Speaker
You don't normally do something like this and start going down this direction if you're not going to start a business. And so just to give you some legs on that, that's why we really like businesses. So let's get into it. This is also going to be an ebook that is available at our website, www.uncommonwealth.com backslash gifts. So there's going to be a lot more meat in this bone if you want the ebook.
00:02:36
Speaker
you will find it there. And that's for podcast listeners only. So without further ado, the seven steps or seven step checklist to launching your own business. First, we kind of had what is the main product or service? And so like, what have you specialized in? What are you tinkering with? I think of one of our last podcasts with Christina Moffat, you know, she was just cooking cupcakes and
00:03:01
Speaker
and baked goods for people at work because the economy is crashing and she was trying to just put smiles on faces. And they were laying people off. So it's that thing. And, you know, again, most of the time that we're meeting with people, they already have this thing, right? It's not something we're telling you to do. It's something that is inside of you that you can't stop thinking about. You keep messing around with.
Understanding the Value Ladder in Business
00:03:25
Speaker
You keep coming back to whatever that is. That's what we're talking about.
00:03:30
Speaker
But I would say the drumbeat inside of you, the Jumanji drum. What is that? Yeah. And so for this, though, it's then it's then I think, you know, we just recently had a conversation with a couple who has that they're like, we want to go forward. What do we do first? And it's really galvanizing what is the main product or service or value that you want to provide. And I think the thing that we talk about
00:03:56
Speaker
And in this PDF or this ebook that we're creating, we have a value ladder. I really wish we would have spent a lot more time thinking through that and valuing that. In our first seven years, then we're trying to essentially go backwards and fill that in.
00:04:15
Speaker
Yeah. So let's talk about the value ladder because I have a feeling some of our listeners are like, excuse me, what? And so let's talk through that because I said the same thing. I wish somebody would have told us this. And basically the value adders, you want to start with your minimum viable product, meaning something that isn't giving you your clients or your, um,
00:04:34
Speaker
I don't know, participants, full access to you because they have to go buy something. And it's a small price, but at least it gives you some kind of cashflow. And Brian and I, I feel like when we set up on Commonwealth Partners, we did it basically opposite. We were the solution. You wanted to come in and be a client. You want an awesome plan.
00:04:55
Speaker
Come on in. We wouldn't even charge you anything at that point. And so it was just a lot of labor, a lot of intellectual property that we were just giving away for free. And that's what we wish we would have done something a little bit different and started with a minimum viable product and then started layering it in of maybe more events or you get some of us but not complete access to us. And so that's kind of what we're talking about when we're talking about value ladder.
00:05:22
Speaker
Yeah. And when you look at the ebook and you look at the value ladder, just think of like a staircase. And essentially what we're saying is we put in the top stair first, which, you know, in hindsight, when you, you know, you quit your job and just go all in, there's really not any other choice to do this. We're talking more so like you have a nine to five job, you have income, and you're trying to launch something on the side without quitting your job.
00:05:51
Speaker
this is kind of the path we're talking about is like you want to go up the staircase and not down the staircase. Here's the one stair that they have, like this ebook we keep talking about. So it's like free shipping book offer. If you have a book, you'll send it to them for free. Then maybe they have the audio book that you can buy. And then you have a home study course that they can purchase online and kind of go through it themselves. Then you have like a six week,
00:06:19
Speaker
some type of like online event. And then you might have a three day, yep. Or a certification course or like a three day live event. And then the last one is like, if you want me to personally help you, that's a value ladder. So we beat that to death, but I think it's important. Super important. And so in that a lot of times we get people, like it's so daunting because
00:06:44
Speaker
they're viewing it as their only thing or the only way to monetize the idea or the product is to go to the top of the ladder first. And what we're saying to people is like, don't do that. Put in some of these smaller steps first, lay the groundwork for you to go full time and get a following and build up a base and build up content and give people a pathway to follow you in terms of your content and expertise.
00:07:12
Speaker
And if you can figure
Research and Niche Market Importance
00:07:13
Speaker
out that small parts of the step of the stairs, you are going to have an exponentially amazing business. Yeah. So, so hang on. So that's that. Let's go to two trademark patents. So I'd say two at a high level is really just research. Um, and so it's a matter of looking at who else is out there doing this? Um, who else out there have you seen that you're drawing inspiration from? Like,
00:07:42
Speaker
Uh, you know, one of the other books that we've read and kind of talked about is like the, the, there's a red ocean, you know, like everybody's doing it kind of like a nutrition and supplements, a red ocean. It's kind of like, basically there's sharks in the water is the point of the book. And you want to find a blue ocean, you know, freshwater where, uh, you have a niche that are a sub niche that no one else is operating in. And so.
00:08:05
Speaker
This is the research phase. You want to check for people. Like if you, if you've got your name, you know, that you want to call this, like, is it trademarked? Does somebody else have a trademark? Does it spelled the same? What's the URL that you want? You know, is it a perfect match? Like if you're, um, you know, you want to start a coffee business, you know, can you get, uh, your coffee.com or whatever you want to call it specifically.com or does somebody else already own that?
00:08:32
Speaker
Those are all the things that you need to kind of check out Google search. Now you need to do a social media search. And then another one of the important ones is just the Secretary of State, you know, and that's actually setting up your legal entity. You know, does somebody in your state have that legal name, actually a previous name that Philip and I operated under for a very short period of time?
00:08:54
Speaker
was taken by some other guy. He was not in our business, but different industry, but it was taken at the Secretary of State level. And so we got out of that rather quickly. And so anyways, those are the types of things that we want you to kind of investigate to see what overlap or competitors are out there, or if you're going to be stepping on somebody's toes, because if you do that, the bigger you get, the faster you go, the more likely they are to send you
00:09:24
Speaker
like a cease and desist and to tell you to stop, we own that intellectual property or we own that patent, that type of thing. And we know specific examples of good friends of ours that have been absolutely killing it and getting complete, I would say, synergies in their business and started to get motivation and started to get enthusiasm and then they got a cease and desist letter.
00:09:47
Speaker
Yeah. So it's real. Yeah. Just like a punch in the face. So I would really don't minimize this.
00:09:56
Speaker
Great ideas. And then you can, you can work around this, uh, research and try to figure out secretary of state's, a good one for Iowa to go look and just kind of see. And so, um,
Building a Cohesive Brand
00:10:08
Speaker
yeah. All right. So let's go to three, which is Brian's favorite. I'll let him talk. I don't know what it is, but I love naming things, uh, URLs, uh, logos and kind of like a branding kit. So go ahead, buddy.
00:10:25
Speaker
Yeah, so this is where you finally walk in. You're like, I've done the research. I've got it all. I'm not infringing on anybody. I'm, you know, kind of like when you watch the old Western movies and they're blazing West on their horses and they each got a flag and they got to go like state or whatever. This is that in the 21st century.
00:10:48
Speaker
It is. And I'll say just like back in the day, the wild, wild West things and real estate are getting a little harder to get. Like let's, for example, uncommon wealth was taken and we had to buy that from somebody. Yeah. Couple grand. Yep. Yeah. So
Educating Clients as a Strategy
00:11:03
Speaker
it's harder to find this stuff. And so anyways, this is the part where you're actually going to go buy, um, you know, you're going to buy the URL. You're going to pay someone to do your logo. You're going to,
00:11:13
Speaker
get that stuff designed, you're going to get the stuff that you need packaging, you know, I have it on there as a branding kit, business cards, that type of stuff, your social media profile stuff, all that you want to get all that stuff nailed down, and your Secretary of State, you know, incorporating your business and getting everything dialed in. So it's like you own it, it's all synergistic, it all complements each other and is the same. And so very important.
00:11:43
Speaker
Yeah. So that's basically naming it. We, we do have another, uh, I would say step here of corporate structure, your tax ID. So we'll talk through that too. So, all right, let's go to, um, number four, we say client education strategy. Yeah. And this, this dovetails back to the value ladder. And normally people would put in here marketing. And I would say this is not marketing. Well, and that's my point is you need to think about it differently.
00:12:12
Speaker
And this is something I think Phillip and I have really changed over the last two to three years is, you know, obviously we sell stuff, we're a business, but we want to educate people. And we feel like the more that we educate people, you know, I think one of the things you say, Phillip, that I always just love when you say it, it's just like so refreshing. Yeah. People can make good decisions when they're presented with the right information. And, you know, people inherently know what they want and they know what is going to suit them.
00:12:42
Speaker
one when they're presented with multiple options and they're educated. And so we really just feel our job is to educate people and all the different things that you can do with your money and all the different ways you can build wealth. And that's one of the big reasons we started the podcast is to show people how many different ways there are to build wealth and people that are having fun doing it. And so this client education strategy is really that value ladder and
00:13:07
Speaker
really coming up with how are you going to get your information out there and how are you going to present it in a way that, you know, asserts your expertise and passion and
00:13:18
Speaker
and discipline that you've put forth to acquire all this knowledge and understanding. For sure. And I would say that I get on my pedestal on this because I don't know if you've ever heard of the A, B, and C of sales always be closing. I think that is the dumbest thing I've ever heard. And I don't know if you like to go into a used car salesman, but no one else does.
00:13:39
Speaker
And so when people try to close you or try to slide over the pen and then push over the piece of paper and just wait for you to sign there, it just seems like the biggest Ponzi... It just leaves a bad taste in my mouth. And so that's one thing that we have never done in our practice is close somebody. In fact, our biggest closing question is like, hey, what do you want our next steps to be? And if it's like, I never want to talk to you too, yay, who's again, it's like, hey, great, no problem.
00:14:06
Speaker
And, you know, it's okay. And so to me, it's really educating people with their different options for our business. And I'm hopeful that this uncommon strategy will be something that you'll kind of take into account of how are you going to be different in the marketplace because you just can't be the same.
00:14:25
Speaker
There's too many people out there who probably tried to do the same. So kind of employing you to try something different. All right. Number five,
Setting Up Corporate Structure and Tax ID
00:14:32
Speaker
corporate structure and getting your tax ID, which is kind of cool, but also kind of sucks. Yeah. Yeah. So this is another one where I think Philip and I both wish we would have found our corporate structure that we're currently in faster than we did. And basically we were LLC.
00:14:52
Speaker
uh, before filing as an S corp. And so I wish, you know, we would have done that sooner, but we're here. And that was probably from our tax guy that helps us. So we're not tax advisors. We don't give tax advice, but from our perspective and from our, I guess, personal case, it made sense to do that from a different perspective. So both Brian and I do feel like getting a lawyer involved here is probably worth it.
00:15:17
Speaker
I'm kind of the guy who likes to do things right from the beginning. And so yeah, it costs a little bit more money for you to get a lawyer, but way worth it at the end and getting everything kind of dialed in. So then you can get that tax ID number.
00:15:32
Speaker
It does cost a little bit, but then also talking to like a tax professional to be like, Hey, should I be self-employed? Should I be a sole proprietor? Should I be an LLC, LLP, S Corp, C Corp? There's just a lot of different things and people can help you. And if you kind of give them a cast division to them, they can help you kind of work through which one might be the best one for you. Yeah. And just asking a ton of questions of like, how can I do this? Not so much like, can I do it? It's like, how can I do it? Yep. Um,
00:16:01
Speaker
And so I think pushing your accountant and your attorney is helpful because, you know, they don't want to go. And I'm not saying do anything illegal or shitty. It's just like, there are so many different, you know, I don't see loopholes because I feel like that makes it dirty. Just what I'll say to try to edify your point without going into the whole thing, taxed people, they just want you to make no money. So you don't pay any taxes.
00:16:27
Speaker
And not helpful. Actually, let's try to pay a million dollars worth of tax. Switch the mindset on them a little bit. Taxes are okay, but help me make a lot of money too. And then lawyers, I think, are just always going to tell you the pitfalls of every decision you make, at least in our experience.
00:16:48
Speaker
And they're not really helpful. They'll be like, hey, if I were sitting where you were, this is what I would do. I've never really heard of a lot of lawyers do that. I've just heard of like, hey, I think I might go down this route. Yeah, well, you could, but that would be bad. And this would be horrible. And then you're like, well, I'll try this one. And oh, that would be bad. This would be horrible. And so anyway, yeah. And then here's my favorite part about lawyers. I love you guys. So hear me.
00:17:14
Speaker
But you say like, I'm gonna go this way. And they're like, Oh, yeah, that's a really good idea. Like, well, why weren't you there an hour ago? Why didn't you help
Separate Business and Personal Finances
00:17:21
Speaker
me? Anyway, so that's that. And that's what we'll say about that. But I do think they're valuable. And I think we have one down here that I won't I won't spoil the deal. But all right, let's go to six bank accounts. Yeah, so you obviously, if you're gonna start a business, you need to have business accounts, checking, savings, credit cards, that type of stuff.
00:17:43
Speaker
And you're going to want that in the business name and tax ID. So you can't do this step until you do the previous step. Once an attorney and CPA gets you set up, then you can open bank accounts, credit cards, et cetera, the things that you're going to need to do business. And so, yeah, I mean, it's just the tax ID is like your social security number, but the business is going to have a different one.
00:18:07
Speaker
And you need to get that and use it. And then kind of the other thing that I think is helpful is just we kind of talk about it in the terms of a Chinese wall. You really got to isolate your business expenses and business transactions into your business accounts and don't commingle them into your personal accounts, credit cards, that type of stuff. Because if you're not keeping good books and records, it gets really muddy water at the end of the year.
00:18:37
Speaker
And as you grow, it's just a mess. This is like, we need to yell this from the rooftops.
00:18:45
Speaker
It is a mess. Try to keep that iron wall up and don't commingle the accounts. Have a business account, have a personal account. So
Importance of Bookkeeping and Accounting
00:18:57
Speaker
our industry is really weird because we have a securities license and so we have to get paid through our personal social security number, which I have like a specific swing account, I call it. So I get paid personally and it goes straight over
00:19:12
Speaker
to the corporation so they're just pretty easy from the accountant standpoint but i'm telling you you guys mess that up once or twice and it just gets ugly quick so try to keep that iron wall up man from experience do that and then the last one is books and accounting yeah this is a little different it sounds the same but it's actually different
00:19:36
Speaker
It really is. So first of all, let's just talk about, there's kind of two types of accounting. Um, and Brian, you do a really good job of walking through this. So go ahead. Well, there's, I call it the gray. Yep. So the first like 0.6 is like the, just the cash, like the cashflow of the deal. Then there's another side of it. That's the actual accounting of it. And you got to kind of think of it in two different wedgers. Um,
00:20:04
Speaker
And so in this and why I put books in accounting is a lot of times people are like, Oh, I'm going to set up a business or we're going to start doing this and this. And it's like, well, how are you going to attract that? Because you're going to have thousands of transactions. And so it's like, how are you going to on a monthly basis, um, balance everything, account for everything and then pay people, you know, like payroll, that type of stuff. And,
00:20:30
Speaker
And so people just don't appreciate that. I think as much, um, you know, we had a gentleman evaluating a franchise and it's like, you know, is the franchise going to provide the accounting software or the point of sale software to, you know, people to sign up for your, for your business and buy stuff from you, you know, or is that something that you have to figure out? Cause it's a huge deal. I mean, you know, the business is projected to be netting, you know, three quarters of a million dollars, you know, and by your two or three, well, you don't want to switch.
00:21:00
Speaker
systems. If you have that type of growth in front of you, you want to be on that system from day one, and know how to do reporting and how to handle everything the proper way. So there's no mistakes. Yep. And so this is the actual bookkeeping, the accounting, the payroll, more of the back end, as opposed to just someone paid me and it went into my bank account.
00:21:27
Speaker
Yep. And then I think there's another side to this accounting and it's more of like business evaluation or like, how am I going to audit my own business for myself? Knowing like how much is the average client worth? What is the biggest profit for me and my business? Like that's kind of a different kind of accounting. I think it's important, but this one is like having an audited financial
00:21:49
Speaker
a CPA or an accountant doing your, I would say, books and records, I think that's so valuable. And here's why. Because when you start this uncommon path and you start a business, every bank looks at you like you're a crook. Like, they're like, you're not using my money because they feel like you're not
00:22:10
Speaker
legit, blah, blah, blah. You need to be in business for two years so I can truly see that you're not going to go under because the statistics are pretty high that business fail. And so to have audited financials, I think really gives you credibility right away. And so personal experience, we have audited financials from day one of our personal corporation, my wife and I, and then from our uncommon wealth.
00:22:33
Speaker
And then I work on that every month as I go line by line and then I send over my accountant. Then Brian does more of the, I would say, profit of our book and kind of do some evaluation on that kind of stuff, which is super helpful for us when we're talking about our business. But when I get this report back from our accountant, I really don't look at it, but I put it in the binder.
00:22:56
Speaker
And then personally, when we were going to go and buy a house, we weren't in business for 2 years yet. But we had audited financials. And so they could figure out all the dollars in and out. And we got the loan. So that was a huge thing that I was so grateful we had. And it made us look way more credible to the bank. So I would say having audited financials, although it's an investment for sure, it does make you more credible in the banks.
00:23:25
Speaker
Yeah. And I think too, the last point on that is if, you know, the, the tough part about owning a business, especially in the first, I would say seven to 10 years, you know, depending on your trajectory and all that, but is, you know, there's not that nice little quarterly statement, like your 401k that tells you how much it's worth. And so the more you track your numbers and the more, you know, accountable you are to what's actually happening in your business, the more confident not only you're going to be,
00:23:51
Speaker
you know, and what the value potentially is, but what the, you know, other people, when they start to look mortgage lenders, you know, commercial lenders, if you were to get into a merger situation or something happens and you don't have to sell your business, you know, operating with that end in mind, you know, Phil and I have no intention of selling our business, but things come up and it's good to know what that number is. And then just psychologically of like, man, we don't have as much in our 401k as other people, but we have this other asset over here. Yeah.
00:24:20
Speaker
we're pouring our blood, so it tears into, it's helpful to know ballpark wise of like, Oh, there might actually be a value to that. Great point. And so just psychologically, it's, it's really important to know your numbers. And I think some of the things we've talked about, you know, in articles, I think we did an episode on just financial guilt and shame. You know, one of the first things that starts when you're in that is not knowing your numbers and not wanting to look each month at what's actually happening in your business. And if you're there,
00:24:49
Speaker
Please ask for help. We're here to help like any boots get help. Like don't go down that path very long because it's dangerous. Yeah. And yeah, you just want you to know you're not alone and so.
00:25:01
Speaker
Yeah,
Conclusion and Additional Resources
00:25:02
Speaker
I would say too, it's just so valuable to just be around like-minded people that are going down this path of starting their own business. Asking for mentors and help is always, I think, so needed. And I think that's probably my pride is probably not doing that as much, but we're definitely right here. So, the seven-step checklist to launching your business, we'll just kind of go through them quick. What is the main product or service?
00:25:27
Speaker
get your trademark, do your research, patent, name, do some research on security of state. Number three, name, URL, logo, some type of kit that you could put together, maybe business cards, that kind of stuff, websites. And then number four is client education strategy. Not marketing, but just how are you going to conduct yourself in front of clients?
00:25:50
Speaker
creating the value ladder we talked about. Number five is corporate structure, tax ID. Number six is bank accounts, credit cards, etc. Number seven is books and accounting for your business. So hopefully that gives you a little roadmap to starting your own business. We do think it's very exciting. It's almost like naming a child or doing something amazing. There is some kind of satisfaction you get from
00:26:18
Speaker
from doing something like this, and at the end of the rainbow, yeah, it's hard work, but man, I wouldn't have it in their way. Like if somebody said, hey, I'll give you $500,000 and a 401k, or you can have uncommon wealth, I'd be like, over and over, give me uncommon wealth. Thank you very much.
00:26:33
Speaker
So yeah, thank you for listening. That is our 25 minutes for today. Man, we really value having you as a guest. Again, if you'd like this ebook or any other other ebooks that we have, please go to uncommonwealth.com forward slash gift. That'll be for you. Just have to put your email in and you can have access to that. So thank you for listening. You've been listening to the Uncommon Life Project. I've been your host, Philip Ramsey.
00:27:01
Speaker
And I'm Brian Dewhurst. Thank you so much for listening. Goodbye. That's all for this episode of the Uncommon Life Project brought to you by Uncommon Wealth Partners. Be sure to visit uncommonwealth.com to learn more about our services. Don't miss an episode as we introduce you to inspiring people who are actively pursuing an uncommon life.