While most people think of tech startups as chaotic, and risky getting mine off the ground felt leisurely compared to Broadway!
In January of 2016, I was scheduling photo shoots for Liev Schreiber and Janet McTeer, the stars of my latest Broadway production, Les Liaisons Dangereuses, which was set to open in October.
(Fun fact: The day this provocative photo was shot was the first time Liev and Janet ever met!). My days were a whirlwind of cast auditions, costume and set design, budgeting, show press, and ticket pricing. The show was a success—but it was also my last as lead producer. Because by the time Les Liaisons wrapped in January of 2017, I had already launched my new tech startup company, What Should We Do, personalized recommendations and culture covering online and app-based service in NYC (and we've since expanded to L.A. and Chicago!).
The worlds of theater production and tech startup might seem galaxies apart, but the truth is I couldn't have had better preparation for my new venture than putting on plays and musicals. Each one of the 26 shows I've produced in my career was a startup! Beginning with just an idea—sometimes in the form of a manuscript and sometimes not even that much—my team and I would bring it to life by finding a space, hiring the cast and crew, and getting the word out to potential audiences. Every production presented new challenges that had to be solved quickly.
So while most people think of tech startups as chaotic, risky, and distressingly fast-paced, getting WSWD off the ground felt leisurely compared to Broadway!
That's not to say it has been easy, of course. Having never worked in tech or publishing, I had a lot to learn. To bring my idea to life, I kept these four lessons in mind every day.
Believe in your vision. I was really worried about being taken seriously. I didn't know the difference between an API and a CMS, and yet here I was wanting to build both of them. But I knew I had a good idea for WSWD. One of my lifelong missions has been to make arts and culture accessible to all (which is why I'm the chair of the Board of Trustees at the Public Theater; their motto is "Theater of, by, and for all people"). There is so much incredible art in New York City—art that goes way beyond expensive theater tickets or old-master painting exhibitions—but not everyone knows how or where to experience it. As someone who has lived in and loved NYC my whole life, I really wanted to help people find and enjoy all the cultural wonders of the city, no matter how much money they had. That's what we do at WSWD: Connect locals and visitors to incredible art, performances, food, and experiences at every price level.
Whenever I felt insecure about my qualifications or my lack of understanding about the specifics, I would remind myself of my vision. You can figure anything out when you love and believe in your idea. And, yes, I now know what an application programming service and a content management system are, thank you very much.
Build a great team. The first thing I would do as theater producer on a new show was hire a director. Together with her, we'd assemble the rest of the team: stage managers; a technical director; designers; a choreographer; PR people; and many others. I never pretended to know how to light a stage, but I knew the importance of hiring an experienced lighting designer. So when I decided to move forward with WSWD, I knew I couldn't do it without a great team on my side. That's the thing about trying something new: You don't have to know how to do everything; you just have to know when to accept help. I hired a fantastic team of web and app developers, editors, business development experts. I reached out to my network of artists, curators, critics, and tastemakers to create WSWD's team of local experts who could keep us up-to-date on the best performances, restaurants, and events in the city.
Then, trust the team you've built. It's one thing to build a team, though, and another to trust them enough to change the course of your business. No one should try to alter your vision, but sometimes the path to get there is different than you expected. In WSWD's early days, for example, I was reluctant to have a heavy emphasis on traditional theater because I was ready to be done with that world. I wanted to highlight quirky, avant-garde, and immersive performances and adventurous places to eat before and after. We do offer that—immersive theater is one of the most popular categories on our site and app—but my editors convinced me not to shy away from my experience and expertise on Broadway. Today, theater companies are some of our best partners and users can trust us to point them in the direction of truly great shows.
Always be making connections. I've talked and written many times before about my goal of meeting at least one new person every day, something I've done since I was just starting out in the theater scene over 25 years ago. And I don't just mean, "Hi, nice to meet you." I make it a point to sit down and chat with people, whether it's my barista, a fellow entrepreneur, a performer, a writer, my kids' friends…anyone! Everyone has a story to tell and everyone has a fresh perspective; these casual and often impromptu "meetings" have always been mutually beneficial.
Also, you never know when a connection will be made. When I would tell people about my new business, they would say, "Oh, you should meet my sister! She's an app developer!" or "I know a food writer who would be great for WSWD!" You may not become best friends or professional partners with all of the people you meet, but creating a large and diverse network of connections is indispensable to any business.
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Business entities can be defined as the corporate, tax and legal structures which an organization chooses to officially follow at the time of its official registration with the state authorities. In total, there are fifteen different types of business entities, which would be the following.
- Sole Proprietorship
- General Partnership
- Limited Partnership or LP
- Limited Liability Partnership or LLP
- Limited Liability Limited Partnership or LLLP
- Limited Liability Company or LLC
- Professional LLC
- Professional Corporation
- Nonprofit Organization
- Cooperative Organization
As estates, municipalities and nonprofits do not concern the main topic here, the following discussions will exclude the three.
Importance of the State: The Same Corporate Structure Will Vary from State to State
All organizations must register themselves as entities at the state level in United States, so the rules and regulations governing them differ quite a bit, based on the state in question.
What this means is that a Texas LLC for example will not operate under the same rules and regulations as an LLC registered in New York. Also, an LLC in Texas can have the same name as another company that is registered in a different state, but it's not advisable given how difficult it could become in the future while filing for patents.
To know more about such quirks and step-by-step instructions on how to start an LLC in Texas, visit howtostartanllc.com, and you could get started with the online process immediately. The information and services on the website are not just limited to Texas LLC organizations either, but they have a dedicated page for guiding fresh entrepreneurs through the corporate tax structures in every state.
Sole Proprietorship: Default for Freelancers and Consultants
There is only one owner or head in a sole proprietorship, and that's what makes it ideal for one-man businesses that deal with freelance work and consulting services. Single man sole proprietorships are automatic in nature, therefore, registration with the state is unnecessary.
Sole proprietorships are also suited to a degree for singular teams such as a small construction crew, a group of handymen, or even miniature establishments in retail. Also, this puts the owner's personal financial status at jeopardy.
Due to the fact that a sole proprietorship entity puts all responsibilities for paying taxes and returning loans, it directly jeopardizes the sole proprietor's personal belongings in case of a lawsuit, or even after a failed loan repayment.
This is the main reason why even the most miniature establishments find LLCs to be a better option, but this is not the only reason either. Sole proprietors also find it hard to start their business credit or even get significant business loans.
General Partnership: Equal Responsibilities
The only significant difference between a General Partnership and a Sole Proprietorship is the fact that two or more owners share responsibilities and liabilities equally in a General Partnership, as opposed to there being only one responsible and liable party in the latter. Other than that, they more or less share the same pros and cons.
Registration with the state is not necessary in most cases, and although it still puts the finances of the business owners at risk here, the partnership divides the liability, making it a slightly better option than sole proprietorship for small teams of skilled workers or even small restaurants and such.
Limited Partnership: Active and Investing Partners
A Limited Partnership (LP) has to be registered with a state and whether it has just two or more partners, there are two different types of partners in all LP establishments.
The active partner or the general partner is the one who is responsible and liable for operating the business in its entirety. The silent or investing partner, on the other hand, is the one who invests funds or other resources into the organization. The latter has very limited liability or control over the company's operations.
It's a perfect way for investors to put their money into a sector that they are personally not experienced with, but have access to people who do. From the perspective of the general partners, they have similar responsibilities and liabilities to those in a general partnership.
It's the default strategy for startups to find funding and as long as the idea is sound, it has made way for multiple successful entrepreneurial ventures in the recent past. However, personal liability still looms as a dangerous prospect for the active partners to consider.
Limited Liability Company and Professional LLC
Small businesses have no better entity structure to follow than the LLC, given that it takes multiple good ideas from various corporate structures, virtually eliminating most cons that are inherent to them. Any and all small businesses that are in a position to or are in requirement of signing up with their respective state, usually choose an LLC entity because of the following reasons:
- It removes the dangerous aspect of personal liability if the business falls in debt or is sued for reparations
- The state offers the choice of choosing between corporation and partnership tax slabs
- The limited legalities and paperwork make it suited for small businesses
While more expensive than a general partnership or a sole proprietorship, a professional LLC is going to be a much safer choice for freelancers and consultants, especially if it involves risk of any kind. This makes it ideal for even single man businesses such a physician's practice or the consultancy services of an accountant.
B, C and S-Corporation
By definition, all corporation entities share most of the same attributes and as the term suggests, they're more suited for larger or at least medium sized businesses in any sector. The differences between the three are vast once you delve into the tax structures which govern each entity.
However, the basic differences can be observed by simply taking a look at each of their definitive descriptions, as stated below.
C-Corporation – This is the default corporate entity for large or medium-large businesses, complete with a board of directors, a CEO/CEOs, other executive officers and shareholders.
The shareholders or owners are not liable for debts or legal dispute settlements in a C-Corporation, and they may qualify for lower tax slabs than is possible in any other corporate structure. On becoming big enough, they also have the option to become a publicly traded company, which is ideal for generating growth investments.
B- Corporation – the same rules apply as a C-Corporation, but due to their registered and certified commitment to social and environmental standards maintenance, B-Corporations will have a more lenient tax structure to deal with.
S-Corporation – Almost identical to a C-Corporation, the difference is in scale, as S-Corporations are only meant for small businesses, general partnerships and even sole proprietors. The main difference here is that due to the creation of a pass-through entity, aka a S-Corporation, the owner/owners do not have liability for business debt and legal disputes. They also are not taxed on the corporate slab.
Cooperative: Limited Application
A cooperation structure in most cases is a voluntary partnership of limited responsibilities that binds people in mutual interest - it is an inefficient structure due to the voluntary nature of its legal bindings, which often makes it unsuitable for traditional business operations. Nevertheless, the limited liability clause exempts all members of a cooperative from having personal liability for paying debts and settling claims.
This should clear up most of the confusion surrounding the core concepts and their suitability. In case you are wondering why the Professional Corporation structure wasn't mentioned, then that's because it has very limited applications. Meant for self-employed, skilled professionals or small organizations founded by them, they have less appeal now in comparison to an LLC or an S-Corporation.