Business documents needed for startup?

May 12, 2009 5:28 AM

Help me get my ducks in a row in terms of what business documents and billing method I'll need for launching my new lead generation business!

I've decided its time for me to break out of the corporate rat race where I do lead generation and start my own lead gen business.

In short, it works as follows (don't worry, not giving away the secret sauce here)...

1. I acquire customers who want to buy leads on a CPL (cost per lead) basis, meaning they only pay when I deliver the leads.
2. I obtain leads using my Secret Sauce(tm).
3. I provide weekly lead reports to my customers with the info for the leads. Ideally I would charge directly to their credit cards at this time but I'm not sure how refunds would impact me in terms of money if I have to refund a junk lead or two (which is a given).

So, that's it in a nutshell. From the lead-gen side of things, I've got things covered. What I'm still trying to figure out are some of the operational/business management things and I'm AskMeFi can help me figure out what sorts of documents, etc. I need to get created before I begin and anything else I'm forgetting.

Some documents I've already determined I need are:

-Contract for customer for a minimum number of leads that I will guarantee outlining payment terms

-Contracts for my various vendors who I work with to obtain the leads

-Financial books for tracking revenue and expenses (if anybody has any suggestions on software for tracking this based on the type of business this is I would appreciate it)

Any other big documents here that I'm missing? I'm also wondering about whether I need a DBA since I have an EIN registered to a generic business name I obtained for my consulting work (think: "FirstName LastName Consulting") but I'd obviously like to call this business something else. I figure since it will have its own website, that website would just be a product owned by my consulting business and I don't need any additional paperwork. Am I wrong on that? I'm in Chicago if that helps any.

Lastly, I'm wondering about charging direct to credit cards versus accepting 30 day net terms with a check. Ideally I'd like the first method as it puts money in my pocket sooner and means there is less I'll need to float from the actual lead-gen expenses. I figure I need a merchant account and a payment processor but I'm not sure how to actually get something setup whereby I can type in the customers info and charge them. Any resources on that would be appreciated. Also, I'm not sure if I'd be opening myself up to a ton of fees if I have to process a few refunds every month--are they expensive?

I realize there are several questions buried in this post, so any resources or guidance you guys can provide on anything therein (or all of it) would be much appreciated and I'm happy to clarify on anything I've written. Thanks MeFi!

posted by Elminster24 to work & money (2 comments total)

No idea on the legal documents, but I've heard good things about FreshBooks as a way to track and invoice work for freelancers.
posted by Happy Dave at 6:32 AM on May 12

You will still need a DBA anytime you are "doing business as" something other than yourself :-)

I think you should also seriously consider separating yourself from legal liabilities (e.g., with an LLC perhaps) if you plan on using contracts.

As for credit card processing, there are a number of ways around directly using a merchant account but you'll probably want a company checking account anyway, so if you're doing enough transactions, I'd just go for the merchant account, too. Reduce your charge-backs by having good terms of service. Obviously, make sure you have clearly presented terms on any business transaction.

Be prepared for slow payment. It can kill you in early business stages. Don't expect to receive payments for up to 90 days from the invoice. You might even consider offering some sort of discount for quick payment. This is especially true with business-to-business services.

A related tip: Always, always keep up with your numbers - get in the habit of working with your balance sheet from day 1. Any startup basically has a net operating cost and that will eventually eat away your seed capital. Whether you fail or succeed depends largely on whether you manage those numbers. Live by them. Seriously go right now and learn how to do it if you don't.
posted by jlstitt at 7:01 AM on May 12