When I’m bored strange things can happen. Today I tried to draw up a mind map. It’s a tool to think about how things react and interact. This is what I came up with for the HalOtis company. This gives me a list of things that I either have to do, or learn more about. It’s pretty vague about what I should do next but it should serve as a good check list to quickly assess where I am in this project.
I’ll go through all the bubbles and explain what they mean to me and why I think they’re important in building a business.
Book keeper – Having a book keeper/Accountant adds legitimacy to the finances. There are at least 2 great reasons why it’s important to hire a 3rd party to do this work. First they are a good business contact, someone that knows about money, and deals with it on a full-time basis. Their specialty should help with the success of the business, by letting me see potholes before the come up. Second, it gives the business more leverage when it comes time to get a loan from the bank, because the bank will see HalOtis as being a serious company that has it’s finances in order, they’re more likely to trust the numbers, and thus provide a bigger loan if a book keeper is on the team.
Tax Strategy – Having a tax strategy is something that interests me, mostly because it’s an interesting problem, where there is room for creative solutions. It’s important because paying 50% income tax rather than 20% is a huge difference in the amount of money that HalOtis will be able to use in the future on projects.
Corporate Entities – Knowing about how best to structure a business is important for both the tax reasons stated above and also to limit the liability of myself, or my other ventures. If my Web services business gets sued, I don’t want to loose my home, or any of the real-estate investments. Having things correctly structured avoids one failure from wiping out my other successes.
Real-estate – Real-estate is an investment vehicle that I’m interesting in getting into. It’s easy to see how real-estate can provide a nice passive income, through rental properties, and that appeals to me. The other thing about real-estate is that even a small profit margin equals a large amount of dollars. In my research it seems like every wealthy person realizes the importance of real-estate in their investment portfolio, so it’s definitely something that I want to explore.
Business Contacts – It’s who you know that’s important. Business is such a complex game that going it alone will almost never work. There are too many issues that come up that where having someone to bounce ideas off of, or connect you to someone interested in buying products. People at the top of other companies can wield so much power that landing one contract could make the company. It’s extremely difficult to get a meeting with these busy people without knowing someone to give me an in. The more business contacts the more advice I can get and the more potential I have of landing deals.
Building Assets – Assets are things that put money in the pocket of the company. The more assets the company controls the more money it has the potential to make. Assets include hard assets like real-estate, and softer ones like patents, and market presence.
- Blogging – Blogging for me is a way to not only document the process, but also to connect to people that have ideas, and similar visions. It’s also an experiment in how to generate traffic and money from a website. Lessons learned from blogging will help to develop other websites, and create a community of people interested in following what happens.
- Web Services – This is a business idea that leverages my knowledge of programming. This is an area that I understand how to develop, and should be able to physically accomplish. It therefore seems like a good place for me to start in developing my chops for business success. Where as starting a restaurant would make no sense for me because I know nothing about restaurants, doing something that I know gives me the least barrier to entry.