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dos and don'ts from those in the know

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As the entrepreneur who started the seminal X-ray Café, as well as the current owner of Voodoo Doughnuts, Tres and partner "Catdaddy" know a thing or four about throwing caution to the wind when it comes to building a business from scratch. If you're too scared to get started, heed the advice of Tres!

-- DO whatever it takes, but do it! Rule #1 is to "do it now, ask permission later." Obviously there are city codes, but it's generally easier to accept the consequences than to ask if it's okay to put a giant inflatable crab out on the sidewalk.

-- DO play good music. People hate coming into stores where it's all quiet. If you're worried about BMI and ASCAP... fuck them. See rule #1.

-- DO deliver press releases by hand. Who knows if the local papers are getting your emails? Put the information in the reporter's hand, and they remember you.

-- DO keep things interesting. At Voodoo we marry people, have rock shows, sponsor doughnut eating contests... give the press something to write about.

--DON'T not pay your rent. Or your bills. That's trouble.

-- DON'T be an asshole to customers or employees. Learn to roll with the punches.

-- DON'T worry about getting busted. If you're following Rule #1 and they call you on your infraction, smile politely and proceed to talk your way out of it. It helps to act dumber than you actually are.

-- DON'T take any classes or business seminars. It's a waste of money. Trust me, nobody knows what they're doing--the only way to learn how to do it is to do it.

-- DON'T hire your friends.

-- DON'T hire anyone who says they don't need training.

-- DON'T allow dating between employees (but it is inevitable).

-- DO hire young employees. They are more impressionable; you can mold them.

-- DO hire the less experienced ones. They don't know what to expect!

You don't need to have Lear jets, big expense accounts and bejeweled corporate boardrooms to be a corporate pig! No, lil' ole you can become a corporation. That's right, all you need are $100 or so in filing fees, and an hour or so to fill out paperwork. In fact, says attorney Diane Peters, it is a good idea to form a business entity separate from yourself--doing so protects you from liability, allows you to take out business loans from the bank and formalizes your ideas. Peters has a briefcase full of ideas to help you navigate the legal tangle of the corporate world.

-- DO talk with a lawyer before starting your business. "There are a lot of different forms of businesses and each accomplishes a different purpose."

-- DO make business partners and clients sign contracts, even if it's your mom and dad. "If you have it on a piece of paper, no one can argue about it later."

-- DO protect your intellectual property. "This is your idea. Protect it by non-disclosure agreements and by confidentiality agreements."

-- DO choose an attorney that you like and who knows your line of business. "You can find an attorney by word of mouth. This is a small town and reputations are known. You should interview a couple; never go with the first person you meet."

-- MAYBE use the off-the-rack forms that are available online. "Simple forms can be useful for some small companies. But those website-type forms are not built for something much bigger or expected to grow."

In this cutthroat economy, even the most successful businesses can be driven out of their comfy homes by price-gouging landlords. Look at the popular downtown Ozone Records store, which was forced to move when new property owners presented a lease demanding nearly double the old rent. Rather than despairing, however, owners Janel Jarosz and Bruce Greif simply adapted, setting up new stores in cheaper locations across the street and across the river. Bruce offers some dos and don'ts for when YOUR beloved business finds itself kicked to the curb.

-- DO keep a positive outlook. Bruce viewed Ozone's transition as a beginning of something new, not an ending. "It was hard having to leave that location, where we had been for 10 years and were very comfortable," he says, "but it was very refreshing to open a new store."

-- DON'T panic. The urge to go deeply into debt to get your business back to where it was before the transition will be strong. Resist. "Borrow as little money as possible," says Bruce. "Do it with what you have. For me, coming from the old store, I had this need to get right back to that level, so I kept pouring money into the store with loans and credit cards instead of letting time take care of the problem."

-- DO put that money you already have into what got you where you were in the first place: your awesome product. For instance, "If I could go back and do it again, I wouldn't have opened [Ozone's] coffee shop," says Bruce. "I built it and tried to operate it and that was a huge mistake. I should have just leased it out--which is what is happening now anyway--so I could put more money into what I love: the record store."

* And on that note, DO believe in what you're doing, and love it. Love is the best tool you can have for moving your business when times are tough. Bruce says, "Running your own business is all about passion. You don't do it unless you absolutely have to do it. I wouldn't give this up unless I absolutely had to. For anyone who's faced with that decision [to move or not to move]: It's not easy, so you gotta really, really want to do it."

-- DO enforce rules against harmful gossip: "One employee talking about another employee can cause a whirlwind of in-house drama. There's no reason to have that in a working environment."

-- DO listen to your staff: "They're on the front lines. Even if their suggestions are way out there, you still have to listen to it. And if you hear something over and over, you have to change something."

-- DO trust: "Allowing other people to make decisions is a valuable tool in the toolbox."

-- DO have focus: "There's nothing more honorable than doing just one thing the best you can do it."

-- DON'T be the scary boss: "Treat people with respect. It takes many ingredients and people to create something bigger than an individual."

-- DON'T let employees take advantage of you: "Don't let them give away free drinks; it's stealing. Businesses are hard to run! It's really expensive and more difficult than it appears."

-- DON'T think you know everything: "When in doubt, get someone who knows how to do it, like if you think you're a plumber and you're not. Think you can install an ice machine? Don't! When you install something, you have to not only employee-proof it, but drunk person-proof it."

-- DON'T be afraid to say no: "I've had artists say, 'Hey, I want my art in here,' and it's been possibly offensive, so I say no and they go, 'That's censorship!' and I'm like, 'It's my place and no means no!' Stick to your guns!"

-- DON'T mistake stagnation for stability: "It'll leave you with a false sense of security. If you do something for too long it will be outdated. You have to stay on top of things."

-- DO a business plan.

-- DO have experience. "Are you opening a restaurant because a friend said you are a good cook but you have no experience working in a restaurant? The hair on the back of my neck may raise up a little on that one!"

-- DO your homework. "Know your needs."

-- DO attend seminars at the Small Business Development Center (2025 Lloyd Center, 978-5080). "There's nothing better than learning from people with experience."

-- MAYBE use your credit cards. "It's nothing that we would encourage, but it is the path of least resistance. It's a quick fix to get started."

Michele Reeves is a commercial real estate broker with Windermere /CCGRI, with a focus on in-city properties, particularly on the eastside. If she can't help you find the perfect spot for your mom 'n' pop shop, no one can. However, before plunking your name down on the lease, take note of Michelle's "do its" and "don't its."

-- DO have someone review your lease before signing. "By someone, I mean a lawyer with real estate experience, not your brother, or your aunt, or your dog. This is an important, often lengthy (20-30 pages) legal document with serious financial implications."

-- DO write a business plan. "Remember, a landlord is staking his business on your business, so unless you are a verifiable trustfunder, you need a plan."

-- DO remember that everything is negotiable: "Length of lease, lease rate, NNN fees, tenant improvements, options to renew, subleasing, etc. However, as a startup, you don't have as much leverage in a lease negotiation as, say, Starbucks."

-- DO look for opportunities to buy an existing business or sublease space from a struggling business. "This can be a good way to bootstrap a startup because you can obtain finished space and a lease for a fraction of the cost of doing it all from scratch."

-- DO research your neighborhood (title companies can provide demographics). "Ask yourself if your business can be supported by local foot traffic. If not, you face being a 'destination business,' which requires very effective marketing."

-- DON'T pay rent while you are preparing the space prior to opening. "Ask for this 'buildout' period to be rent-free."

-- DON'T go it alone. "Unless you know the difference between a NNN lease ('triple-net lease'), a gross lease, and a full service lease, you need real estate representation."

-- DON'T start a restaurant unless you luuuuuuuuuv the business. "It can easily cost $200,000 to outfit a new restaurant, and you will work longer hours than you thought possible."

-- "DON'T expect to find a charming, vacant, in-city brick building with dramatic windows that you can fix up for $300/month. Sadly, those days are gone forever."

-- "DON'T worry about your options to renew and what to do when you need to expand in 10 years (these are good problems). Your primary concern should be protecting yourself from personal bankruptcy if your business does not succeed. Remember, almost all startups have to guarantee their leases with personal assets."

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