Creating your own startup is easy. You don’t need an MBA. You don’t need an expensive law firm. You don’t need an ‘older more mature CEO’ to hold your hand. And if you can afford 6 months without an income and $5k to get started, you might not even need a VC or Angel investor.

You just need to be OK with researching to find the info you need and acting on it. I’ve written this as a very basic guide to getting started for under $5k – or $4985 to be exact.

Inc yourself – $415 + $50 for Nolo books

You need to create a corporation so that you have a degree of legal protection. You get to choose from a C Corp, an S Corp or an LLC. Forget about partnerships or Sole Trader. I’ve always used a C Corp because it’s the only structure that lets foreigners invest in your corporation, and that’s a requirement of mine.

I’ve always Inc’d myself and not used a law firm. I don’t think it’s necessary and I’ve sold C Corps that I’ve Inc’d myself without any admin issues. Visit NOLO.com and buy a book for your state and do it yourself.

We are incorporated in Delaware and Kerry just sent me the following data for your enjoyment:

Delaware startup costs: $90 filing fee, $50 for a registered agent ($140 total)
Delaware annual fees due end of year: $60 filing and franchise taxes (up to 3000 shares authorized), $50 registered agent ($110 total)

You also need to file as a foreign corporation where the corp does business or has a physical presence. Washington fees are as follows:

Washington startup fees: $205 filing/license fees, $70 registered agent ($275 total)
Washington annual fees due end of year: $90 filing/license fees, $70 registered agent ($160 total)

Trademark yourself – $2,200

Sure you’ve got an awesome domain name, but if it’s cocacola.com you’re in trouble. Use a lawyer to do a trademark search. It’s going to cost you $300 to $500 bucks and it’s worth every cent. You can do an initial search on the USPTO website for free, but get a law firm to do this for you because there are more databases than just the USPTO.

It might come back with some pizza joint out in Smallville USA that has a name vaguely similar to yours – just ignore that. You’re worried about companies that target the same market as you do.

Then use a lawyer to file your trademark with the USPTO. Once you have it on file and can start counting down to that magical 5 year date when your trademark becomes incontestable. This will cost about $1,700
I had the unfortunate experience of getting sued over trademark infringement a few years ago, so this is now one of the first things I take care of.

Provisionally Patent your technology – $2,000

If you’re wicked smart and invented something new, then file a provisional patent. This buys you 1 year during which you must file a full patent. The provisional patent can cost as little or as much as you like.

You can write and file your own provisional patent for as little as $200. That’s a bad idea because when your company is worth something and it’s time to sell, and you’re doing due diligence with your future acquiror, they’re going to ask which law firm did your provisional patent and you’re going to say proudly that you did it yourself and the conversation will move on as if your little patent doesn’t exist.

Use a law firm.

The full patent that you must file within a year may cost as much as $25,000, but by that time you’re hopefully making so much cash out of your wicked smarts that you can afford that.

Do your own accounts – $300 (quickbooks pro license + course material)

I put myself on an accounting course a while back.I also did a quickbooks course. Once complete, I had enough knowledge to manage my own corporate accounts and promptly turned our books over to my amazing wife who now handles all our accounts and legal stuff. (evil grin) She’s actually lying downstairs reading a book on intellectual property as I write this. Crazy woman!

If you’re going to do your own accounts, learn the fundamental double entry system and basic accounting equation. Then also learn how to use your accounting software – Quickbooks is awesome for corporate accounts. Quickbooks abstracts a lot of the internal stuff away from you, like the double entry system – and that’s ok for a while, but eventually you’re going to hit something a little complicated and you need to have that basic knowledge to bail you out. Or you can just buy a CPA for $50/hour and get them to help you out when you get stuck.

Alternatively…

Just outsource your accounts. Quite a few of my friends do and that works for them too. Just make sure you get a competent accountant and at least have enough knowledge to ask the right questions and double check some of their work.

Learn basic finance – $20.00

Read this book. Read the whole book. Do not pass go, do not think you can outsource understanding your balance sheet or understanding the time value of money. You need a basic knowledge of finance.

Now, drop everything and just do it

Once you’ve got all this basic but necessary stuff out of the way, build your business as fast as you can!!

If you think it’s going to take a month to create your prototype, give yourself 2 weeks and do it in 3. Your time is your most expensive commodity, so haul ass and make it happen!!

Just don’t forget to listen to your customers and let them shape your product because they are, after all, the only reason your business exists. More about that in a future entry.

Disclaimer: This is not legal advice and I am not a lawyer.