Know-How Exchange : Other

Dear Max,

Ideas about setting up and running the company? This is a great question and one you are wise to ask BEFORE you get going—lots of companies get started with their founders not asking any questions, which gets them into a world of pain.

NOTE: I am NOT a lawyer and what follows does NOT and should not be seen as legal advice or counsel.

The first thing you need to consider RIGHT NOW is this: STOP! Sorry to put it so brusquely but slow the hell down and do NOT go any further down this road until you've figured out solid answers to the following questions:

How you and your "friend" will manage your day to day business decisions and agreements. Ya'll need to clearly spell out who will do what and who is responsible for what. As joint owners of the business, if one of you runs off with the cash box, legally, the other person could just cop for all the resulting expenses, fees, costs, bills, and crap. If you work WITHOUT a clearly written and signed contract and everything goes south your friendship will dissolve into a war of words, finger pointing, and personal and financial hell. You need a written contract. You need solid legal advice, and you need solid accounting advice from a trusted, licensed, bonded professional in your town. Trust me on this. Work without one and you'll regret it.

什么your liabilities will be.

什么your experience and knowledge of the business is.

什么your expenses will be for the first 90 days, and then quarterly for the first two years.

How you will pay for goods, services, and expenses.

How you will handle taxes.

How you will handle your business structure (LLC?)

Who you are competing against.

Who you will serve.

How you will serve them.

什么your business plan will be.

How you will market your business.

Why on earth anyone would buy from you.

什么's your primary benefit to your customers.

什么your cash reserves are like.

什么your borrowing needs will be.

什么your cash flow will be.

什么your revenues will be.

And a good many other questions.

Fail to address any of these questions and you'll wind up in the financial and business crap soup saucepan on a high heat. Trust me, you DO NOT want to be in that pan, EVER.

To enter a niche like events management is risky at the best of times, but going into events management almost blind? You need to do a good amount of planning BEFORE you set up shop and anyone that tells you otherwise is a half wit and a dangerous half wit at that.

Go and see your local small business advisory people (look them up on Google by city and state).

Make friends with the people at your local SCOREhttps://www.score.org/. Get a plan together of at least one year's worth of projected cash flow and income and go and see your bank manager to ask about borrowing money. Or go to Kickstarter.comhttps://www.kickstarter.com/and seek help there.

It's an old chestnut but it's oh so true: fail to plan and you plan to fail.

Hope this helps. Good luck to you.

NOTE: Again, I am NOT a lawyer and what you have just read does NOT and should not be seen as legal advice or counsel.

—Gary Bloomer
Princeton, NJ, USA

Wow, you are asking a lot and you don't even explain what type of event management company. Is it consumer or business? What are you managing?

It worries me that you are starting this company without any experience. If this is the case what do you offer your clients? You are looking for a lot of heartache and loss of money. Hopefully, your friend has a lot of experience.

Cons:
You do a bad job and people dislike you.
You lose money.
You create a rift between you and your friend.

Pros
It is nice to be independent