Does A Laptop, A Web Page, and a Business Card Make Me A Real Business? Why Not?

Yup, experienced Business Consultant here.

As a Franchise Owner who serves as Regional Director of Recruiting for a well-known insurance company (#quack) and who also owns his own LLC, I stumble across many individuals who give the impression they are small, but fully-functioning small businesses —  from friends, to job-seekers, to those that regularly attend networking functions.

As I mentioned in the past, I was, (and for the most part still am) a small, independent LLC. And I until I escalate my business to the level I am anticipating, will never stray from that mindset of the struggling, hustling LLC.

After I was laid off from a great job in 2009, the LLC I had created the year before was no longer a hobby — I had to make the most of it, while I looked for work.

As a business owner, recruiter, and still active in networking circles, I admire those that consult with various clients and put themselves in a position to obtain outsourced services from small, local businesses. There’s a trust factor there. A relationship is born. Somebody was given a chance.

But, are you a real business? Ask yourself: “Does A Laptop, A Web Page, and a Business Card Make Me A Real Business?”

Does A Laptop, A Web Page, and a Business Card Make Me A Real Business?

1) To A Recruiter — NO! It’s pretty common in the recruiting world to heavily discount large gaps in an applicant’s history with self-employment. Why? Because it just can’t be verified.

Not that recruiters and HR types are suspicious, but there is generally a “cat and mouse” game when it comes to substantiating a candidate’s credentials. There’s obviously a lot of embellishment.

One method I use is to verify their clients or to see signed invoices.

"This is my direct number."

2) To A Bank — No! Opening a checking account? You better have your Letter of Incorporation from the State (in active status) and your Federal Taxpayer Identification Number from the IRS.

Some banks go further and want you to construct a diagram of your management and employees, want your LLC Operating Agreement, and want to know your DUNS number.

For a loan? Not only do you have to provide your personal credit, personal income, and personal tax returns… they want your business tax returns too. Some will want your accounts receivable, by client. And of course, the Business Plan. How’s that for transparency and disclosure, right?

Not only that, banks are wanting to lend only if your venture has the immediate probability to be profitable. No trying to skirt the issue with your own income to cover losses.

"Wait, what is your business, again?"

3) To A Small Business Owner — NO! All businesses like low-cost alternatives to some of the things they outsource. Many businesses would love someone who could clean up their bookkeeping, help up with questions about employee benefits and insurance… even help with recruiting and sourcing of potential employees.

But, impersonating an “expert” in some of these areas is dangerous. Unless you have the background to competently handle some of the complex challenges they face with geography, or supply chain, or competition, or pricing, etc… please don’t waste their time.

You didn’t go to college for this stuff and you’ve never worked in the field. So, how can you claim to be able to help a business increase their profitability?

Just… stop.

In Closing

Preparing for a business is one thing, (Laptop, shirt & tie, business cards, flyers, web page w/ logo, etc.), but without:

1) Legal formation

2) Credentials

3) References

4) A CUSTOMER!

5) Revenue

You are not a business.

Of course, not every business is meant to be profitable right away, but at least have something vested.

Way more than the laptop, web page, and business cards.

What do you think?