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Ask HN: What are good books for funding a small company/becoming self-employed?

3 points by jonathanstrange ↗ HN
I'm in my late 40s years and will likely "drop" out of Academia within the next 3-6 years. I'm also thoroughly fed up with it and have been thinking about funding a small software company for a long time. Essentially, I will be forced to do that anyway, so I better start planning for it now. I'm working on a "test" product now in my spare time to later check how this side project does on the market. It's currently in early alpha and still takes a long time, but it already has some unique features. (I've also sold shareware in the past, though not very successfully.)

The question is about books and resources to help with the business side. I've looked around and found metric tons of crap. I really don't want to waste my time on another self-help book or books on how to get an "entrepreneurial spirit." What I'm looking for is solid & concise information on numbers and indicators, business plans, etc. I'm not shy of math.

Some talks at Y-combinator are useful, e.g. I found [1] informative. However, these talks seem to be mostly geared towards startup funding - I'm more interested in small bootstrapping, starting a one-man business without initial funding.

[1] https://www.youtube.com/watch?v=LBC16jhiwak

2 comments

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klingonopera
It helps to already have a potential client or two, before even starting the company (or a financial cushion for one, two years or the ability to survive without financial support, i.e. parents, partners, farming community, etc.).

Since you want solid and concise information, your country would also play a big role, but I'm guessing omission of that information is an indication, that you're probably in the US? Every country has their own legal quagmire when it comes to concise information about founding a company. If you're in the EU, thanks to their open borders policies, you even have the choice of choosing a country and the corresponding legal framework.

Nonetheless, (me from Germany) I think this is valid in the US too, are you sure and have put some thought into whether you really want to create a one-man-show company and not be a freelancer? The latter choice is often easier, especially from a bureaucratic point-of-view.

rubidium
Not to be too trite, but the reason there’s not much is because there’s not much to say. If you’re using college math you’re making it too complicated.

Cash flow is king. P&L tells you if you can survive for the first 1-5 years. Balance sheet tells you if it’s worth surviving for the next 5.

For SAAS it’s the basic LTV, churn rate etc.... the guy who started salesforce has a nice pdf/book floating around that I’m trying to find.

For solo consulting it’s lower your costs to bare minimum and then charge an hourly rate you can live on that assumes you work 40%-50% of the year. If you can’t find work at that rate you don’t have a business. Patrick Mckensie’s blog has nice info on raising rates once you’re started.

But in general it’s all about cash flow when you’re bootstrapping.

The best small business book I know of is Traction.