Terrifying moments in my company’s growth

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Original photo by Joe Alonzo, used by CC license
Original photo by Joe Alonzo, used by CC license

Offbeat Bride launched on January 1st, 2007 and over the past 8+ years, the Offbeat Empire has grown from a thing I did first as a side hobby, then as a job for me, and eventually as a small business that supports a part-time staff of seven contractors. Looking back, I can see where there were a few terrifying milestones that forced my hand on growth. I’mma offer these up for y’all to consider… because growing pains can be horrific, but also kind of awesome. Forgive me if some of the details here are vague — when other people are involved, I’m going to opt toward keeping things general.

Unhappy advertiser refuses refund = I go S-Corp

An advertiser purchased an Offbeat Bride vendor listing, and then realized it wasn’t the product they had anticipated. I apologized for the misunderstanding, and offered an immediate full refund… which they refused to accept.

Wait, they refused the refund?! What else could I offer other than a refund? What could they do if they didn’t want a refund!? What if they like… wanted to sue me or something? OMG! Suddenly I realized that since my business was a Sole Proprietorship, my personal property (like my home) was at risk. This $300 miscommunication with an ad client could result in the liability of my $300k home. HOLY FUHHHHH. This was the terror I needed to get a lawyer to help me transition my Sole Proprietorship into an S-Corp business. Thankfully, I was able to work things out with the unhappy advertiser, but it was a great prompt to get my business/personal finances separated.

Copyright Trolling = I get Terms of Service and contractor paperwork clarified

A designer who I’d done a trade with in 2008 contacted me four years later saying they were unhappy with how their work was being used on my site. Although I immediately complied with their request to remove their work from my website, the designer’s lawyer then spent a year telling me (and companies I’d done work with) that they were about to file a lawsuit.

This was my introduction to the concept of copyright trolling, and it was the most terrifying thing ever. My small business friends were like “Aww, your first copyright troll! Welcome to the big leagues!” Apparently, this is just a thing that happens as your business gets successful, if you haven’t adequately protected yourself.

Ultimately I was at fault in this situation — not because I’d used the designer’s work incorrectly, but because I never made the designer sign a work-for-hire contract, nor did my sites have Terms of Service. These two oversights made my business an easy target for legal harassment. I spent a lot of money legally defending myself against the threats, and no lawsuits were ever filed… because there weren’t grounds for one. The whole idea with copyright trolling is to get cash settlements from business owners desperate to avoid lawsuits. I learned that every site needs a Terms of Service, and that no small business should EVER let someone do work without a contract. (Even if it feels like overkill, which it totally does.)

Flaky finances / I lock down my bookkeeping

I’d hired someone to help with my finances in 2010, but after a couple years it became clear that the person helping me didn’t have it handled. Quarterly taxes I thought were getting paid, had not been. Suddenly I went from thinking that my business was kicking ass to being like “Holy shit, I think I’m going to owe like $20k in taxes this year…”

In cleaning up the mess, it also became clear that my finances were big enough and complex enough that I needed to be balancing my books weekly, working with a bookkeeper monthly, and talking to a CPA quarterly. Now I log into Xero.com to reconcile my income and expenses almost daily. My bookkeeper and I review my financial reports and talk over revenue projections every month. I work with my CPA to obsessively file every city, state, and federal tax known to man, usually ahead of schedule.

This is the funny reality of running a small business: I may have started this whole thing as a writer, grown into an editor, and eventually graduated to publisher… but at this point I spend a lot of time on the exact same administrative crap that all small business folks have to manage. The financial stuff, the legal stuff, the administrative stuff. I have to make sure contractors invoice on time and track down checks that didn’t get delivered. I have to balance my books. I have to check in with my lawyer about trademark infringements. I consider it “doing things right” if I don’t have to deal with too many terrifying situations… but there’s no denying that those terrors help small businesses grow.

Comments on Terrifying moments in my company’s growth

  1. Thank you so much for this. At the end of each year I sit and contemplate not only 3 guiding words for my business, but also 3 goals. This year the goals are:
    1. Do finance reconciliation once a month rather than quarterly. I’m doing enough now that I really need to do this.
    2. Add an accountant. This one scares the jeebies out of me as I then have to supervise someone else handling my money in ways different from how I do it.
    3. Become an S-Corp. Same kinds of reasons. Most times things can be worked out, but what happens if someone just doesn’t want to work with me? scary stuff.
    I see now that I need to add a lawyer to this. Will do.

    • Yeah, having a good accountant and a good lawyer are both unfun & expensive tasks that are sooooo worth doing before you NEED to. Especially the lawyer. When the shit hits the fan, you want to have a lawyer on speed dial who already knows your business…

    • Just a little addendum for small British business. In the UK sole proprietor = sole trader & S-corp = Ltd or limited company. It’s not an exact comparison but it is a good one for Ariel’s scenario.

      A sole trader can have any of their assets seized to pay off debts (eg. house), a limited company can only have company assets seized (eg. That vat free laptop ‘for work’).

  2. At one point my family owned a small restaurant ( apparently this is some kind of rite-of-passage if you’re of Greek heritage ). Sometimes when people find this out, they tell me how much they’ve dreamed of owning a restaurant because they loooooove to cook. What I say is always this: “That’s great but be sure you love running a business too. Make sure you love dealing with the public and employees, make sure you love bookkeeping and negotiation, make sure you’re comfortable with advertisement. Because the person who cooks in a restaurant? Is the chef.”

    The reality of small restaurant life is that you can hire somebody to cook and you can hire somebody to be the manager but you can’t hire somebody to be the owner. So all those tasks have to be handled first… and then you can cook.

    • YES! My husband has this conversation a lot when people ask him when he’s going to open his own yoga studio. He’s like “Dude, never. I like teaching yoga. Studio owners do very little of that.”

  3. As a former journalist/future lawyer (graduating in less than two months! Ack!), this was absolutely fascinating to me. Thank you so much for sharing!

    It’s funny when I think about how long I’ve been reading the Offbeat Empire websites (like, seven flipping years at this point) and how much it’s changed my personality and helped me grow as a person.

    Offbeat Bride helped me learn to love and embrace people and viewpoints from all walks of life (this also became my way of justifying reading it daily even though I’ve never been engaged/married, lol).

    Offbeat Family helped me with my interactions with my nieces and taught me to nevereverever get involved in debates with parents about parenting.

    Offbeat Home taught me that I can make everywhere I live beautiful and fun, even if it’s temporary, tiny, run-down, or all of the above.

    And now – Offbeat Empire has taught me more about editing and the publishing business I was involved with throughout my undergrad years and has even helped me look at things through the legal viewpoint I’ve been crafting over the past three years.

    I mean, it sounds dramatic, but it’s actually the truth – I just do not think I would be the person I am today without my daily reading of your websites. Overall, I’m more tolerant, I take more risks, and I have a more positive view on life. Thank you so much! 🙂

    • Aww. I’m having all the warm fuzzies over here. As I said in this interview:

      Q. How have readers responded to your writing?

      A. Over the years, I’ve got some truly amazing feedback about how my publications have made real, tangible differences in readers’ lives. Offbeat Bride isn’t curing cancer, but the site’s commitment to inclusivity and tolerance is downright revolutionary in the wedding industry, and knowing that we’ve changed people’s minds about trans* issues, or marriage equality, or how they communicate with the people around them… it’s hugely motivating.

      I don’t consider my work especially brave or important, but it’s so gratifying to know that the Offbeat Empire contributes to people’s lives in a meaningful way. Thank you so much for your comment!!

  4. How do you recommend going about finding an appropriate lawyer/cpa? I don’t have anyone in my local social circle who has needed either in a small business capacity, and my internet colleagues are mostly far, far away. (I miss Biznik.)

    • Referral is your best bet — I found mine via colleagues and asking folks at my coworking space.

  5. I’m a new small business owner and have been going through some of these rights of passage too… Realizing I needed to become an LLC, hiring 2 part time contractors…. it’s scary stuff but I love being a business owner and the freedom it gives me to live my life how I want to.

    Congrats on building something out of what was probably just once a dream, it’s not easy and it says a lot about you that you have succeeded!

  6. Thanks for this! We started our own business three years ago and it’s amazing how steep the learning curve has been, and what obstacles and massive mistakes have led us to the next phases in our business’ growth.

    I can’t speak for everywhere in the world, but I feel like America talks a lot about entrepreneurship and small businesses but most of us (Americans, I mean) have NO IDEA what really goes into running a business. They don’t teach this stuff in school – I mean, unless you go to business school, which I most definitely did not.

    We are up to four full-time employees now, and a handful of freelancers and contractors, and I spend my days worried about taxes and working visas and payroll and medical insurance coverage and all kinds of stuff that I never even considered when we set out on this venture.

    The biggest mind-fuck for me – as well as motivator – is the knowledge that four people (and their families) depend on the salary and benefits from my company to survive. It’s like: WHOA. We are SERIOUSLY adulting now. Crazy.

    • I am not convinced that they teach anything about running a truly small or microbusiness (micro = less than 5 employees) in business school. Or about Entrepreneurship whose business model is not “come up with an idea, get funding from venture capitalists, exit strategy = get bought by someone big for a big paycheck.” The U.S. Small Business Administration has some useful workshops, but I’ve not found much else other than books.

      • Yes! This sounds spot on.

        And almost every time I read about a new program, building, group, incentive or initiative that is meant to foster entrepreneurs, it turns out to be only about tech businesses or about finding the next billion dollar invention.

  7. Thank you so much for sharing this. I am in the process of getting my small business started. It is in an entirely different sector (an industrial/steampunk coffee roastery and spice shop), but the same things apply. It’s scary to think I need these things and how to get it to all come together and work. And no go broke doing it!

    • Where are you doing this?? Sounds like a smash hit if you’re someplace like Seattle, Portland, or SF.

      I’m working on starting up a professional organizing business/blog duo. It’s scary seeing what even a home business takes to get moving.

  8. I am currently in the process of having to think about all of this and this type of thing is not at all my strong suit. #lesigh

    Thanks for an interesting and informative read…

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