Looking for advice starting a web development company?
October 6, 2010 10:43 AM   Subscribe

Looking for advice starting a web development company?

I am planning to start a web development company with two other people. We are still in the initial phases of actually forming the company, meaning we are writing the business plan and deciding how to structure the company and the actual registration process, etc.. We are based in Vermont, but none of us live in the same city.

I am looking for any recommendations/suggestions/tips from people who might have done something similar as far as what we should be thinking about, or things you would have liked to have known when you got started.

What we pretty much know how to do already is the actual work. We each do something different that is part of the process, i.e. one of us gets clients and does the web design stuff, one of us does graphic design stuff, and one of us does the backend coding stuff. But we are going to need to be doing a lot of work outside of that to actually make the company run. Stuff that isn't design/development work!

Additionally, since we are in different locations, we really need to get some sort of web-based software to assist us in the actual collaboration on projects, since we won't be able to have face-to-face meetings on a regular basis. I have experience in project management, but I have never worked with a team that wasn't immediately physically available, so we need some way to make up for that.

We have all been friends for some time, but have never really worked together professionally. We just realized that we each had a piece of the puzzle to web development and decided to combine forces. I figure that will be a factor in how we should choose to manage our projects, since we aren't simply moving to a web-based facilitation of an existing process, we actually need to learn how to collaborate together at the same time.
posted by doomtop to Work & Money (7 answers total) 12 users marked this as a favorite
The first thing you need to do is create a forecast of your revenues and costs.

Then decide what form you want your business to take. For example, an LLC with the three of you being co-equal shareowners.

Then set up an accounting system and stick to it. Consult a competent tax adviser and follow his advice explicitly.
posted by dfriedman at 11:22 AM on October 6, 2010

Atlassian's JIRA is excellent issue-tracking software, and a license for up to 10 users is only $10.
posted by nicwolff at 11:49 AM on October 6, 2010

Tons of excellent advice: Venture Hacks.

Excellent advice from VC's and Angel Investors: Foundry Group, particularly Brad Feld's blog

All these places address exactly the kinds of questions you are asking along with other strong, balanced advise.

(Hint: Nobody cares about your business plan. Yet.)

As far as communication goes, I use Basecamp and it's excellent. Not too much, not too little.
posted by nickjadlowe at 11:54 AM on October 6, 2010

www.37signals.com is a great site with web based tools for collaboration, project management, contact management, etc.
posted by soss at 1:27 PM on October 6, 2010

Don't do it with partners if you can avoid it. If you have the talent to sell and deliver the goods you can sub or hire for the rest. At the nascent stage you are at you will dilute your ownership for very little gain.

Think seriously about whether you can pull it off yourself. If you can you are much better off doing so. If you are working with partners because you really need the expertise of others, then that is something different.
posted by dgran at 1:37 PM on October 6, 2010

Response by poster: I don't have any of the actual design experience or the potential clients. I only do backend stuff, IT/networking, and project management. I will be handling much of the business management stuff, like legal document stuff and finance/accounting. Without the others, there is no business because I can't actually create the product we are selling (website designs). Also, one of the other members has already started doing some basic website work and will be bringing in the clients to start things out (he's already got a few projects lined up).
posted by doomtop at 2:03 PM on October 6, 2010

I'd suggest making sure all the partners are on board with the initial investment and initial compensation (if any). I started a company and didn't take a salary at all for the first 4 or so months.

It gets much easier after that first six months to a year, assuming you are successful. But even if you're instantly successful you'll have a ton of expenses and very little cash at first.
posted by letitrain at 3:47 PM on October 6, 2010

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