The document provides an overview of starting a business from Joshua D. Drake, including: 1. Drake discusses reasons people want to start their own business like freedom and being the boss, but cautions that freedom isn't absolute and being the boss means dealing with problems. 2. He emphasizes the importance of knowing your market and having a clear understanding of what your business does. Consumer and business focused markets require different strategies. 3. Drake outlines different legal structures for businesses like sole proprietorships, partnerships, corporations and LLCs, noting the pros and cons of each. He recommends starting with an S Corp in most cases. 4. Resources for learning about starting a business include books on business

1. Let’s talk business
Joshua D. Drake
Command Prompt, Inc.
PostgreSQL.US
PgConf.US

2. Bullet point resume
● Founded Command Prompt in 1997
● Founded PgUS in 2008, current
Director
● Director for SPI for 9 years
● Avid outdoorsman
● Open Source Advocate
● Public speaker
● Has been published hundreds of times

3. Contact
● Twitter: linuxhiker
● Instragram: linuxhiker
● Facebook:
– https://www.facebook.com/joshua.drake
● Email: linuxhiker@gmail.com
● Skype: jd.cmd
● IRC: linuxhiker

4. This presentation succeeds
Based on your participation
Successful businesses are lead by proactive leaders!

5. Let’s break it down
● Why do you want your own business?
● Know what you know
● Know exactly what your business
does.
● Don’t be a sell out
● Feast or Famine
● Legal Structure
● Resources

6. Why do you want your own business?
1.Get Rich!
2.Freedom
3.Be the Boss
Profit is the reward, not the goal.

7. Get rich
● Define rich
– I want to get in, get investment, go public and
be Mark Zuckerberg.
● Net Worth: ~ 54 Billion
● Notable work? Built a privacy invading, advertising
driven, fake news factory. Otherwise known as the
web version of AOL.
● Owns a 700 acre vacation home in Hawaii
– Built a 6 foot wall around it. (That’s a wall over a square
mile)

8. I am one of the richest people I know
● I have a wonderful family
● I have a modest (if large home)
● I can travel
● I generally set my own schedule
● I have money in retirement
● I can afford to fuel an F150
● I don’t answer to the media or
shareholders
● It only took 20 years

9. Freedom
● Freedom is a lie
– Want to take a vacation?
– Try working 20 hours a week?
● You can get there but it isn’t overnight
● Try instead for Flexibility
Be open minded !

10. Be the Boss
● The only good Boss is the one that
hates being the boss.
– Pay disputes
– Contract disputes
– Employees are like children (even the good ones)
– Taxes
– Licensing
● The buck stops with you.
– Shit doesn’t roll uphill

11. Know what you know
● Get a lawyer
– Unless you are one and even then get a lawyer
● Get an accountant
– Unless you are one
● Don’t do your taxes
– Business taxes are complex
● Don’t be afraid of subcontractors
– If you are a botanist, don’t try to be a biologist

12. Know exactly what your business does
● The most successful companies (small
and large) know exactly what their
business does.
– Consumer focused
– Business focused
– Know your market
Business is about relationships

13. Consumer Focused
● What type of consumer?
– Income type? (Yes it matters)
● I want to sell quality outdoor gear
– Your target market is generally not college students
● I want to sell best in class pricing outdoor gear
– Your target market is middle class and below
● Not a black and white definition
Never underestimate the value of social media.

14. Business Focused
● Similar things to know
– Revenue level
● By far, CMD’s customer base is in the < 10million a
year level.
● We do have several Fortune 500 firms
– Market
● Medical and Construction are different
● Markets can define themselves over time
– The nature of your products or services evolve

15. Know your market
● At the most basic of levels,
businesses exist to make money.
(Even non-profits)
● Your market defines how much you
can charge
– REI can charge full retail successfully for a tent
– Amazon can not.

16. Market focused continued….
● Generally speaking, keep within your core
market demographic
– You aren’t going to sell a 500.00 tent to the average Wal-
Mart shopper.
– The average Wal-Mart shopper is a white, 50-year-old
female with an annual household income of $53,125[1]
– The inverse is also true.
● Demographics are about more than income
– REI in BHAM has less selection than Seattle
– BHAMSTERS are willing to pay > 2.00 for black, drip coffee.
1.http://www.businessinsider.com/meet-the-average-wal-mart-shopper-2014-9

17. Don’t be a sell out
● One who betrays a cause for personal advancement.
– When things are tight, it is easy to sell out. Don’t.
– Compromise is not selling out
● Always consider the greater good
– If you reduce your rate 10.00/hr will you make 1000.00 more?
– If you take the “big job” will your other clients suffer?
– Gut thoughts matter
● If you can’t quite put your finger on it but you are nervous, take a
break before the yes/no.
– There is nothing wrong with “Sleeping on it”
– Talk to peers, get their perspective
– Every single time I have ignored my gut thoughts, I have
regretted it.

18. Feast or Famine
● Feast
– Invest in yourself
– Invest in your company
– Invest in your people/employees
● Famine
– Protect yourself
– Protect your company
– Protect your people/employees

19. Invest in yourself
● Take a bonus
– Put half in savings, put the rest toward you. (This calculation
will change the longer the feast is.)
– Even 100.00 is 100.00 you didn’t have before the bonus.
● Take a vacation
– Even if just a town away for a weekend.
● Turn off your cell phone for a day
– http://www.inc.com/minda-zetlin/9-surprisingly-good-reasons-to
-turn-off-your-smartphone.html
● Sleep better, More open minded, Better problem solving
● Have some sex
– Mortality rates for those who have sex frequently is less than
half of those who don’t. “British Medical Journal, 1979”

20. Invest in your company
● Push money to a rainy day fund
– Help during lean times
– Easier when it is a company fund, not a personal one
● Review sales/advertising/marketing budget
– Investing in this budget keeps money coming in during famine times
● Are you running a >3 year old laptop/phone?
– Tax deduction
– Keep up with the times
● A nice chair goes a long way
– So does a stand up desk
● Review internal projects
– Add people
– Start working that new idea
If it isn’t in writing, it didn’t happen!

21. Invest in your people/employees
● Give out a bonus
– A weekend away with the wife/husband can do
wonders
● Consider a few three day weekends on
the company
– Inspires loyalty
– Affirms the hard work of the team
● Review overall perks
– Retirement bonus, employee stock aware etc...
–

22. Protect yourself
● Watch the rainy day fund
● Reduce costs
– Stop drinking Starbucks, cancel your cable subscription, drive a used car
● Pay yourself first
– It is honorable to skip a paycheck in lean times
● It is also selfish. You are not taking care of yourself.
● Which means you are not taking care of the company or the team
● If it is a downturn, working harder/longer won’t
change that
● Don’t forget your family.

23. Protect the company
● Have a credit line
– Keep it small
– Use only for emergencies
● Review non-vital costs
– Employees
– Advertising
– Cell phone data plans
– Perks
● Make every decision with the greater good
in mind.

24. Protect your people/employees
● You have a responsibility
– Your team trusts you
● To clothe and feed their family
● To give them professional purpose
● Protecting yourself and the company allows
you to protect your team.
● You are the leader
– A good leader makes hard decisions.
– A good leader makes the necessary sacrifices.
● Sometimes that means firing someone for the greater good.

25. Legal Structures
● Sole Proprietorship
● Partnership
– LLP
● Corporation
– C
– S
– B: Not going to discuss, very specialized (B Corps are for-profit
companies certified by the nonprofit B Lab to meet rigorous
standards of social and environmental performance,
accountability, and transparency.)
– We will not discuss 501c(3) (or other 501c($) such as 6.). They
would be a presentation in themselves.
● LLC

26. Sole Proprietorship
● Pros
– Simple to setup
– Simple tax structure
● Cons
– No corporate shield
– High risk/liability
● Conclusion:
– Don’t, just don’t.

27. Partnership
● Pros
– Very flexible
– Easy to setup
– Less structure than others
– Sharing of profit and loss
● Cons
– Can get complicated as rules are not as
structured
– No corporate shield, partners are liable

28. LLP
● Pros
– Limited liability
– Better if seeking investors due to limited liability
– Profit pass through (tax incentive)
● Cons
– Limited liability, more limited than Corp
– General partner maintains 100% liability
● Conclusion:
– Widely used for white collar professions such as CPA
or Attorney

29. C Corporation
● Pros
– International shareholders
– Corporate shield
– Logical structure for authority
– (Right now: favorable taxation of dividends)
● Cons
– Double taxation
– 51% wins
● Conclusion
– Start with S corp, migrate to C once > 5million in sales

30. S Corp
● Pros
– Corporate Shield
– Favorable tax environment
● Profits/losses are taxes on the shareholder level based on ownership %
– Simple to manage
– “Distributions” (S corp dividends) not subject to self employment tax
● Cons
– No international shareholders
– Ceiling on revenue and # of shareholders before you must convert to
C Corp.
●
Conclusion:
– Unless you have a specific reason not to, use a S Corp.

31. LLC
● Pros
– Liability limited to % of ownership
– Corporations/Partnerships can be members
– No limited on # of members
– International members allowed
● Cons
– Can be complex depending on tax classification
● Conclusion
– Stick with S Corp unless you have a specific reason

32. Resources
● Read:
– “The Seven Habits of Highly Effective people”
● Know:
– The basics of economics
● Supply and demand
● Equilibrium price
● Learn:
– Take Business management 101
– Take Economics 101

33. Questions
Don’t be shy – I can not be offended.
Keep it real and honest.