Guide to business?
by Ali Scissons · in General Discussion · 03/09/2003 (12:26 pm) · 8 replies
Apparently, theres all these "how to make particles bouncy!" and "model a donut!" tutorials. . . but not really enough covering the fine lines of business.
I am pretty young developer at the moment, going towards 17, and I have both somewhat artistic and programming talents(got to work on sounds). But I have no damn clue about these NDA contracts, copyrights, and so on. Like many youngin's would be, these loop holes through our ignorance about these business-thing-monsters-etc make us vulnerable to grave mistakes and/or advantageous actions.
Simply put, is there anything that would gives us a low down on these such subjects? I found alot of the articles in Dexterity Software's site quite helpful.
Thanks.
I am pretty young developer at the moment, going towards 17, and I have both somewhat artistic and programming talents(got to work on sounds). But I have no damn clue about these NDA contracts, copyrights, and so on. Like many youngin's would be, these loop holes through our ignorance about these business-thing-monsters-etc make us vulnerable to grave mistakes and/or advantageous actions.
Simply put, is there anything that would gives us a low down on these such subjects? I found alot of the articles in Dexterity Software's site quite helpful.
Thanks.
#2
It's near the end of this thread:
http://www.garagegames.com/index.php?sec=mg&mod=forums&page=result.thread&qt=9683
03/09/2003 (11:33 pm)
If you're subject to United States business law, I wrote up a pretty complete post about how to do a lot of this. It's near the end of this thread:
http://www.garagegames.com/index.php?sec=mg&mod=forums&page=result.thread&qt=9683
#3
03/10/2003 (11:58 am)
I'll add something to ths list here - go down to Barnes & Nobles or favorite book store, and get yourself a copy of Owning an Operating a Business in (x) (where x is your state). I doubt you find a better resource for most of the information on the business, local law, etc. Frequently updated, so, you'll find all the info about your state's laws on the subject. Also included is information on the SBA, SCORE, etc. which can all be a huge help to ya. 
#4
As far as forming a corporation goes - you can do it yourself, but we used a lawyer. Cost around $1500 to set up an LLC with two partners.
03/10/2003 (12:14 pm)
The best book for getting started I've found as a complete newbie at it myself is "Small Business Kit for Dummies". It has a CD-ROM with sample contracts (NDA, contractor agreements, etc).As far as forming a corporation goes - you can do it yourself, but we used a lawyer. Cost around $1500 to set up an LLC with two partners.
#5
Another option is to register as a DBA("Doing Business As") in your state, which is much less complicated, and basically sets you up as a sole-proprietorship. Of course, they all have their upsides and downsides, so you really need to think about what you want out of your company. Either way, you really should talk to people and read up well before you make a decison on incorporating, and what kind of corporation you want.
03/10/2003 (12:56 pm)
I agree with reading up on businesses. If you are in the US, you can also go to your local Small Business Administration office and chat up the volunteers they have there, because they are usually retired executives with a lot of good experience to share. I registered my LLC for about $300 after reading a lot of material on different corporations, and did it in Delaware to avoid most taxes(there's a $400 flat tax yearly there). Lawyers are a good help too, especially if you still find yourself confused after you read up on the types of corp's you can make. Another option is to register as a DBA("Doing Business As") in your state, which is much less complicated, and basically sets you up as a sole-proprietorship. Of course, they all have their upsides and downsides, so you really need to think about what you want out of your company. Either way, you really should talk to people and read up well before you make a decison on incorporating, and what kind of corporation you want.
#6
Think small. Think fast. Think vicious. You're not the business equivalent of the U.S. Army, with endless resources and hordes of staff. Right now, think like the Viet Cong. Down and dirty, no excuses, thoroughly dedicated.
Or you could spend money on some of those books.
03/12/2003 (11:37 am)
Those state specific books are not a bad little resource for the nuts and bolts of the legal paperwork. But as for running a business, there's about a million books on the subject, and most of them written by MBAs that are closer to PHBs(Pointy Haired Bosses, for the non-Dilbert initiated). If you want to know how to run a business, find a relative or friend who owns a sandwich shop or something. The basics of supply and demand still apply, whether it's sandwiches or software. Read Gamasutra and "Game Developer Magazine." Read "The Wall Street Journal." Develop a paranoid mindset, expect the absolute worst possible situation and then plan against that. Be flexible. Thomas Watson only thought there would be a world market for five computers, he was wrong, he changed his strategy, and IBM is still big after all these years.Think small. Think fast. Think vicious. You're not the business equivalent of the U.S. Army, with endless resources and hordes of staff. Right now, think like the Viet Cong. Down and dirty, no excuses, thoroughly dedicated.
Or you could spend money on some of those books.
#7
-brad
03/15/2003 (2:43 pm)
contact your local small business adminstration and/or chamber of commerce, most have a mentoring program and free or low cost resources. -brad
#8
Very Good Reading!
----------------------------------------
Orbital Design Studios inc. IS incorporated. We incorporated with the state of Deleware through a company that does all the foot work for you, it's quite easy to find them online, as we did. For us, it cost about $450, and that included everything we needed, even to do business out of the country. We got the certificate of incorporation, a binder with the by-laws and other misc forms and papers, a very nice corporate seal (the old kind you have to crimp over a piece of paper and it makes a raised seal...) and some pretty decent savings on some business supplies from well known suppliers such as Staples.
By the way, we chose to go with full incorporation, but chose to make it an S corp vs a C corp, and I'll explain why in a bit.
Once this is done, you need to apply to the IRS (AHH NOT THEM!!!) for an EIN or Employer Identification Number...even if you don't plan of hiring employees or plan to hire everyone as contractors as my company has chosen to do.
WARNING: WHEN APPLYING FOR YOUR EIN, YOU SHOULD ALREADY KNOW IF YOU WILL BE A C OR AN S CORP!!!
The major differences between a C and S corps are that in a C corp, taxes are paid by the corporation itself. All well and good, S corp allows you to make those who hold the stock shares in the company. If you're holding all the paper, this can be bad. If you plan on trying to get investors or traditinal publihers to invest into your company...THIS IS VERY GOOD. Why? Well, let's look at an example real quick. You own 100% of the company. Copany owes $200K in taxes for a given game release...I hope you've paid yourself one hell of a huge salary...because not only will you be taxed for the company's profit, but your normal income as well, which the company profit is now considered to be a part of. So, you just went up several dozen tax brackets, and the tax is higher still. Yes, this is a horror story...but the reason why I say it's good, is you can be an S corp as long as you like, which means if you 'do it, and try as hard as you can to get someone to invest in your company, but do not succeed, then simply let the IRS know....and you revert to a C corp and the nightmare is gone. The big advantage of going S corp if you managed to get a few investors, is educed overall tax, since one person or entity isn't being taxed, and the total tax on the company profit is being considered to be the same as if you bought stocks on the stock market, the tax amount to each shareholder is really quite small as well. Investors don't like it when more of their potential profit is spent on taxes...which is why they'd rather you be an S corp if you want them to listen at all.
Next...you don't REALLY need one, but wow, does it make a difference. GET A DUN & BRADSTREET NUMBER. What is a D&B number you ask? Simple. Know how they track your personal credit history by your social security number? Well, then a D&B number is the number wich banks, investors and other businesses check your company's credit worthiness by. Don't let D&Bs website fool you either, unless you're a long existing company already, don't bother with the expensive version, just get the free number.
And now, after all that...you just need to do 2 things. 1. Pay your state dues. For Deleware it's $50 a yr...[sarcasm]owww...[/sarcasm] And 2. pay your registered agent fees if you DID NOT incorporate in the state where your company exists. RA services are usually pretty cheap and if you go through a company to incorporate, they usually take care of it for you and simply bill you for it on a 6 month or yearly basis.
So now, just remember to file your taxes on time, and MAKE MONEY! Remember...the only way a company can fail, is if it's in debt. If you stay free and clear and work your butt off to get that first game out the door, you're almost home free...just need 2 or 3 more, then a really nice big one and you've got it rolling.
Have fun!
Oh, and a quick suggestion for NDAs and other "signature" documents.
Use PGP. :P If you don't know what PGP is, get your head out of the dirt. hop over to google.com and find a free version of PGP. It's not hard to learn the program, or understand it.
What PGP is, is a security encryption program. What Orbital does with it is this:
1. I create NDA document.
2. I use PGP to sign the document with my PGP public key, and encrypt it for the exact recipient.
3. Recipient is the only one besides myself that can open and read the document, because it's keyed to HIS public PGP key.
4. Recipient uses his PRIVATE key to decrypt the message, and sees that it's PGP signed by me.
5. Recipient then reads the NDA, and applies his signature to the signature file that goes with the NDA.
6. Recipient then reencrypts the NDA and it's signature file and sends it back to me. I decrypt it again, verify he signed the NDA and file it away on a CD-RW.
Note: IT IS LAW THAT DIGITAL SIGNATURES, WHEN ABLE TO BE UNDENIABLY VERIFIED, ARE 100% LEGAL FOR USE IN LIEU OF A PEN SIGNATURE FOR ALL PURPOSES....in the US and for US businesses of course.
(Thank President Clinton for ONE good thing he did for us...)
Hope this helps folks.
Oh, additionally, to prevent signatories of these documents from editing them, I'd suggest you use Adobe Acrobat and create the documents as PDFs, then password lock the PDF to prevent ANY edits or changes. I personally use Acrobat 5...not the reader, the full program.
------------------------------------------
Author: Charles McKee
Thank you Mr. McKee!
03/16/2003 (6:23 pm)
Charles McKee has already posted the URL to the thread that the following info is located, BUT I felt by re-posting his post that more people will be apt to read it.Very Good Reading!
----------------------------------------
Orbital Design Studios inc. IS incorporated. We incorporated with the state of Deleware through a company that does all the foot work for you, it's quite easy to find them online, as we did. For us, it cost about $450, and that included everything we needed, even to do business out of the country. We got the certificate of incorporation, a binder with the by-laws and other misc forms and papers, a very nice corporate seal (the old kind you have to crimp over a piece of paper and it makes a raised seal...) and some pretty decent savings on some business supplies from well known suppliers such as Staples.
By the way, we chose to go with full incorporation, but chose to make it an S corp vs a C corp, and I'll explain why in a bit.
Once this is done, you need to apply to the IRS (AHH NOT THEM!!!) for an EIN or Employer Identification Number...even if you don't plan of hiring employees or plan to hire everyone as contractors as my company has chosen to do.
WARNING: WHEN APPLYING FOR YOUR EIN, YOU SHOULD ALREADY KNOW IF YOU WILL BE A C OR AN S CORP!!!
The major differences between a C and S corps are that in a C corp, taxes are paid by the corporation itself. All well and good, S corp allows you to make those who hold the stock shares in the company. If you're holding all the paper, this can be bad. If you plan on trying to get investors or traditinal publihers to invest into your company...THIS IS VERY GOOD. Why? Well, let's look at an example real quick. You own 100% of the company. Copany owes $200K in taxes for a given game release...I hope you've paid yourself one hell of a huge salary...because not only will you be taxed for the company's profit, but your normal income as well, which the company profit is now considered to be a part of. So, you just went up several dozen tax brackets, and the tax is higher still. Yes, this is a horror story...but the reason why I say it's good, is you can be an S corp as long as you like, which means if you 'do it, and try as hard as you can to get someone to invest in your company, but do not succeed, then simply let the IRS know....and you revert to a C corp and the nightmare is gone. The big advantage of going S corp if you managed to get a few investors, is educed overall tax, since one person or entity isn't being taxed, and the total tax on the company profit is being considered to be the same as if you bought stocks on the stock market, the tax amount to each shareholder is really quite small as well. Investors don't like it when more of their potential profit is spent on taxes...which is why they'd rather you be an S corp if you want them to listen at all.
Next...you don't REALLY need one, but wow, does it make a difference. GET A DUN & BRADSTREET NUMBER. What is a D&B number you ask? Simple. Know how they track your personal credit history by your social security number? Well, then a D&B number is the number wich banks, investors and other businesses check your company's credit worthiness by. Don't let D&Bs website fool you either, unless you're a long existing company already, don't bother with the expensive version, just get the free number.
And now, after all that...you just need to do 2 things. 1. Pay your state dues. For Deleware it's $50 a yr...[sarcasm]owww...[/sarcasm] And 2. pay your registered agent fees if you DID NOT incorporate in the state where your company exists. RA services are usually pretty cheap and if you go through a company to incorporate, they usually take care of it for you and simply bill you for it on a 6 month or yearly basis.
So now, just remember to file your taxes on time, and MAKE MONEY! Remember...the only way a company can fail, is if it's in debt. If you stay free and clear and work your butt off to get that first game out the door, you're almost home free...just need 2 or 3 more, then a really nice big one and you've got it rolling.
Have fun!
Oh, and a quick suggestion for NDAs and other "signature" documents.
Use PGP. :P If you don't know what PGP is, get your head out of the dirt. hop over to google.com and find a free version of PGP. It's not hard to learn the program, or understand it.
What PGP is, is a security encryption program. What Orbital does with it is this:
1. I create NDA document.
2. I use PGP to sign the document with my PGP public key, and encrypt it for the exact recipient.
3. Recipient is the only one besides myself that can open and read the document, because it's keyed to HIS public PGP key.
4. Recipient uses his PRIVATE key to decrypt the message, and sees that it's PGP signed by me.
5. Recipient then reads the NDA, and applies his signature to the signature file that goes with the NDA.
6. Recipient then reencrypts the NDA and it's signature file and sends it back to me. I decrypt it again, verify he signed the NDA and file it away on a CD-RW.
Note: IT IS LAW THAT DIGITAL SIGNATURES, WHEN ABLE TO BE UNDENIABLY VERIFIED, ARE 100% LEGAL FOR USE IN LIEU OF A PEN SIGNATURE FOR ALL PURPOSES....in the US and for US businesses of course.
(Thank President Clinton for ONE good thing he did for us...)
Hope this helps folks.
Oh, additionally, to prevent signatories of these documents from editing them, I'd suggest you use Adobe Acrobat and create the documents as PDFs, then password lock the PDF to prevent ANY edits or changes. I personally use Acrobat 5...not the reader, the full program.
------------------------------------------
Author: Charles McKee
Thank you Mr. McKee!
Samo Korosec
The second thing I can not underline enough is to try and control your enthusiasm - I've learnd the hard way. You are young and enthusiastic and there are a lot of people just waiting to rip you off. Be very careful in what you do and sign and ask twice before deciding. There is nothing worse for the motivation of a young artist/coder than being ripped off really bad.
Also, the third thing many people mentioned is to do write down as much as you can in terms of contracts and NDAs and whatnot. It's good for keeping your schedule and for you communicating with others since it prevents misunderstandings.
To sum up - my advice would be to invest in one or two hours with a lawyer and ask him _all_ the questions you have and make notes. That way you can get all your facts straight and not risk on picking up misinformation from a website.