Category: Startups

When you’re running a startup, it’s easy to get caught up in actually doing the work. Running the business. Meeting your goals. But it’s just as important to make sure you have a solid system in place for organizing the reams of paperwork that go along with opening any business — and to ensure that the system is being used regularly, and correctly.

In the digital age, saving original, physical documents are rarely necessary. The few paper documents I have, take up half of a single file cabinet. Everything else is scanned and uploaded immediately.

In order to sleep soundly at night, I use a multi-tiered backup strategy, similar to the one I use to protect my family’s computers. My solution combines Time Machine (for local backup), Dropbox (for cross-device backup — you could easily use another service, such as Box or Evernote, too), and Crashplan (for offsite backups).

I also rely on USB drives for occasional snapshots of critical files.  Yes I actually backup my dropbox each quarter with an alternating USB drive.  One lives at my house and the other with a family member 150mi away.  With this system, I know that our critical paperwork — our articles of incorporation, bank records, and other financial and legal documents are safe and secure, yet easily accessible from anywhere in the world.

Why Organization Matters

Here’s the thing: This isn’t just you and an idea, anymore. It’s a business. It makes money. You may have employees, who depend on you for their livelihood. So you have to act responsibly and get your house in order.

When investors come calling, you need to be able to pull together documents at a moment’s notice. You need to be able to put your hands on everything instantly. If you create and use a simple filing system that lives in the cloud, you can count on your documents to be available and up-to-date when you need them, wherever you need them.

No one wants to be audited. But if you do get audited, it’s a massive relief to know that it’s going to be an inconvenience — but nothing more. If your paperwork is organized and filed properly, you’ll be able to produce the documents you need quickly and efficiently. You’ll be able to get back to the business of, well, business with very little hassle.

What to Keep

My general rule of thumb is to keep a copy of anything I sign. Beyond that, I make a point of keeping:

• all paperwork related to company formation
• stock and financing papers
• anything that could be considered tax-related (the IRS has put together a helpful guide)
• employee files (resumes, signed IP agreements, offer letters, and other related documents)
• NDAs with contractors, signed contracts

Do you plan to ask investors for money? They — or their lawyers — will want to see most of this documentation. If you’re working with venture capitalists, you can expect to have to produce paperwork at each funding round, and banks and business partners may also request information as they conduct due diligence. Be prepared. One of my favorite “cheats and hacks” for startups is Echosign, which lets you sign documents digitally — and provides a way to track and store them securely as well. Tools like this help you get into the digital filing mindset, streamline your processes, and keep things automatically organized.

How to Manage the Paperwork

Your system for organization only works if you use it all the time. Not some of the time, not most of the time. All. The. Time. That means you have to put some thought into parts of your system like file naming conventions. Two important tips:

Do NOT name your files things like, “AOI_rev_draft4joe” and think you’re going to remember that in two weeks, let alone in two years. Don’t be afraid of long file names. “Articles_of_incorp” will serve you better in the long run.
If you want to append dates to your file names, choose one format and stick with it to make your searches easier and more efficient.

Schedule a recurring 15 minute meeting on your calendar (Friday mornings are a good time) to quickly review your digital filing cabinet. If you make a point of doing this weekly, you’ll have the time to scan anything new that’s come in, update files when necessary, and so on. This is a critical appointment, so don’t skip it — ever.

Put your trust in search

One thing I wouldn’t bother wasting time on is creating a complicated folder hierarchy. Modern search functions are awesome. If you name your files well, you’ll have no trouble finding exactly what you need in seconds. Drilling down into 7 levels of folders is a colossal waste of time.

An organized filing system is worth the time it takes to set up — which should really be minimal. And for that small investment, you get a setup that will help you clear the mess out of your head and concentrate on getting your real work done.

When you’re starting up a business on a budget, your office space can be the biggest expense — especially in the San Francisco area. But, as with all things, you have options. The big three options are finding and renting your own space, subletting a space or participating in a shared space, or taking space in an incubator. Each of these has advantages and disadvantages, so let’s take a look.

Renting Your Own Space

Renting your own space means that you set the tone — but you also foot all the bills on your own. You don’t want to rent an office the size of a closet, especially if you anticipate hiring staff in the near term, but you also don’t want to pay for a lot of space you don’t need and aren’t using, so finding the right space is critical. If you do find the right space, however, it’s nice to be able to make the rules, have super-secret strategy discussions without fear, and never worry about what might be happening in the office on the day you bring investors by.

It’s true that ultimately, your business will need its own space, but consider carefully whether you really need to be on your own just now. Even if your budget has plenty of room to spare, you can’t predict the future, and you might really need that cash down the line.

Sublets and Shared Spaces

Sublets and shared spaces can be significantly cheaper than renting your own space, but you will have to learn to get along with your neighbors. On the other hand, you may gain access to facilities you wouldn’t otherwise have, and working around people who share your general goals and mindset can be exciting and inspiring.

My company is currently sharing space in a fantastic facility designed specifically for entrepreneurs. For us, the rent-a-desk model currently makes the most sense. And even though this particular space is a little pricier than some others, the price includes catered lunches and lots of coffee (and other business-oriented amenities like conference rooms, but really, the coffee is critical), and we’re around lots of other really smart start-up people. As we grow, we’ll move on to our own office or sublet, but only when we’re ready to make that move.

Incubators

If you have the opportunity to take space in a startup incubator, you should probably take it. The idea behind incubators is that they give you a chance to grow your business in a nurturing environment, working alongside other like-minded folks, and with the support of business assistance services, and often one-on-one mentoring with successful entrepreneurs. (The space we’re sharing is actually something between a shared space and an incubator.)

Incubators don’t take every company that applies, though, so you can’t bank on this as an option. And not every incubator is one that you’d want to join — doing your research is critical. Start with this comprehensive overview of the incubator model, and then take a look at some of the programs that have recently been highlighted in the tech and financial press. Do research on specific incubators you’re interested in joining. Talk to people who have spent time there. Ask what was most and least valuable. Make sure the incubator will provide the kind of support you need to succeed.

The Final, Non-Final Word

Ultimately, only you can determine what the right space is for your startup. But it shouldn’t be a decision you rush into — and what’s right for you right now might not be right for you a year — or even 6 months — from now. So don’t be afraid to reassess your needs and change your situation when necessary.

Startups, from bootstrapped to well-funded, should be budget-conscious as a rule. You’ve got to make that runway as long as possible until you can jump to your next round or achieve profitability.

Therefore it’s pretty common for founders to be big on DIY “do it yourself”. It’s part of the startup culture to eschew the niceties of corporate enterprise such as secretaries or window offices. To be seen as “not afraid to get his/her hands dirty” is supposed to be a sign of a real entrepreneur.

But at the same time, I find that DIY can sometimes cost us in the long-run.

Think of it this way: the smaller your team, the more valuable is each member’s time. So whenever your lead developer spends an hour trying to find a plumber, or your CEO is preoccupied trying to book an offsite event, that all represents precious time away from the real work that only you and your team can do.

When trying to do everything yourself to save a few dollars ends up costing you opportunities, it’s time to tap into services that not only put you on a level playing field with established companies, but give you a leg up on your startup competitors who are busy DIYing it. 

Here’s a list of the most helpful services that I use regularly as “cheats and hacks” in my startup. They are probably more affordable than you’d think. Ironically, many of these services are startups themselves.

Fancy Hands: Personal assistants who let you focus on your real work

A startup can wreak havoc on the rest of your life. I spend long hours away from my family — but that doesn’t mean that I can put off my family or household responsibilities. Enter Fancy Hands. For one monthly fee, I have a team of assistants that are an email or phone call away.

This is currently my favorite service to use. My 3-year-old needs to see the pediatrician? I let Fancy Hands figure out when my wife and I are both available. Then Fancy Hands sits on hold to make the appointment, not me. I need to beat down my cable provider and get a better deal? Fancy Hands takes care of it. But it’s not just for domestic tasks. Oops, forgot to book a decent local restaurant to host the next team outing: I let Fancy Hands do it while I keep my head down on real work.

Fancy Hands says they can handle anything that takes approximately 15 minutes or less. Note that some of my tasks have ended up taking much longer than that, but so far it’s all been handled with a (virtual) smile and no complaints.

You may need to break larger tasks into component parts. This is actually a good exercise for you as an entrepreneur, because it teaches you how to parse your tasks, give clear instructions and most importantly, it teachers you how to be a better delegator, which is often a tough skill to acquire.

Fancy Hands cost: Starts at $25/month for 5 tasks

oDesk: on-demand freelance talent

Startups on shoestring budgets often have to fake it till they make it. You might not bother ordering letterhead until you need it, for example, but at that moment, you might realize that you’d like to have a logo that is better than the one you hacked together in PowerPoint a few months ago. But contracting an expensive design agency is out of the question.

oDesk is a virtual marketplace I discovered about 8 years ago. I can see oDesk contractors’ performance ratings and payment history, I can cap hours and even see what they’ve been up to while “on the clock” via oDesk’s desktop screenshots. I’ve hired oDeskers for short projects and I have others that I’ve been using for years.

oDesk cost: Here’s just a few examples of what I’ve had done:

• Logo design- $12/hour
• Bookkeeping – $18/hour
• WordPress dev – $8/hour
• Virtual assistant – $8/hour
• Put together a list of the most recommended gardening services near my house – $4/hour

Uber and UberX: On-demand town cars and taxis

Hailing a cab on the street? Please. Once I went Uber, I never went back. I love it because via their app I can hail a car from just about anywhere, at any time. I can see where my car is en route and know exactly when my car is pulling up.

Uber originally made a splash with black town cars and recently added UberX to their offerings. UberX lets riders hail hybrids and sedans for less than a town car.

There is no fumbling with cash or credit cards, or figuring out how much to tip. Payment and gratuity is handled automatically, so when I get to my destination, I just say goodbye and bounce. It’s a time saver that gets me to meetings or to my daughter’s music class performance.

Uber cost: Varies

EchoSign: Send, sign, and file documents

I hate paperwork. We have NDAs for interviewees, contracts for salespeople. We receive paper forms that need to be filled out, then scanned, then emailed. Enter EchoSign. It makes the form completion and signature process faster and more efficient, for both the sender and the receiver. And yes, it’s all legit and legally binding.

I send W-9s with a couple of clicks, and they come back just as fast. I really get my money’s worth when there’s multiple signatures required. EchoSign tracks progress, sends reminders, and once executed the doc is instantly linked and filed properly. I can even copy our lawyer and he gets a fully executed copy as soon as the contract ink is “dry”.

Echosign cost: Starts at free for one user and 5 contracts/month. We pay $40 for the team plan.

Starting up a business takes precious time and money. These sites and apps have helped me get my business off the ground quickly, while allowing me to focus on the important tasks that my team is relying upon me to get done. What are the cheats and hacks you’ve found helpful in your journey?