Starting a business is not for the faint of heart. Entrepreneurship is not about trying and succeeding, but more often than not, trying and failing, and then trying again. My experiences from working for startups, having my own contracting business, and starting two companies with my husband have thickened my skin and provided me with some wisdom I’d like to share with you.
If you are thinking of starting a company or know someone who is, heed this warning: Everything on this list is true. If you don’t think so, feel free to learn the hard way. Then, let’s go have coffee.
- Your Idea Isn’t That Great. I’m sorry to burst your bubble. It isn’t that your idea is bad, it is probably really cool. But ideas do not earn investment capital or customers. A good business plan and access to the market does. The only place you might be able to sell an “idea” is in Silicon Valley and that rarely turns out well. Thomas Edison was right when he said “genius is 1% inspiration and 99% perspiration.” That’s also why when Walt Disney was asked why he was so willing to give his ideas away he would say, “there is always another one.” It isn’t the idea, but the ability to execute the idea into a successful business that is the trick.
- Your Motive Better Be More than Money. Most people start off with a dream—a dream that stems from a passion. Money is not a passion. Our first passion was using new technology to educate the world and help create sustainable jobs in countries with struggling economies. We failed. Our next motive was survival. We wanted to create jobs here in the United States, especially one for us. And this time it’s working! We now have 23 people on the payroll. Yay! A passionate motive drives you harder than just a desire to make a stack of cash. And don’t expect a giant stack of cash to ever come, or come quickly. Your goal should be first and foremost to have a profitable company. And that is really hard to do—often a lot harder than just finding a job.
- Inventory Your Sacrifices. Ask yourself what you are willing to sacrifice for the sake or your new company. Your house? Your car? All your savings? Your washing machine? Relationships with your family? Your free time? Make a list of how far you are willing to go and discuss this with your business partners and family. You all need to be in agreement of where the line will be drawn. And, you will likely need to come back to this conversation (see lesson #6). Play out each scenario as if you are going to lose it all. Dig deep and ask yourself if you are all willing to take that risk. One for all and all for one.
- Don’t Quit Your Day Job. Don’t think your great idea will allow you to sit back and only work part-time as the money rolls in. What you are signing up for is two full-time jobs, or more. In our case, at least one of us had to work and earn a paycheck during the day and then come home and help with the business at night, while the other worked the equivalent of two full-time jobs (without pay, for several years sometimes).
- Patience Is a Virtue for a Reason. Desperation is a repellent. When you are desperate — for example, when you can’t afford groceries or make payroll—the desperation oozes from your every pore. You will want to push people to sign contracts and move faster than they can or are willing to move. This ultimately irritates your customers and clients and drives your chances of success far away. Remember lesson #3 (sacrifice), take a deep breath, eat that two-year-old mystery meat in the back of your freezer, and stay the course.
- Cut Your Losses Sooner Than Later. After you have sunk hundreds of thousands of dollars into a business, it is very hard to say goodbye to your great idea, your product, and your passion….it is like a piece of you dying. But you need to let go and do it sooner than later. Listen to wise stakeholders and the market. If it isn’t going to work, cut your losses right away. Trying to hang on because you can’t let go of your dream will just hurt you more in the long run. Sunk costs are sunk. LET IT GO. Remember lesson #1 and don’t worry. You’ll have another idea and you’ll do better next time.
- Give It Away. Don’t be afraid to give large percentages of your company away. If you are going to succeed, you will probably need to scale and grow. This means you will need wise, influential, and lucrative business partners — larger companies or investors. Don’t be cocky or greedy and think your idea is so valuable, you can do it all yourself, and you can’t possibly share your “future pot of gold.” You’ll ultimately get more gold by growing and giving away large chunks of your company than you will trying to hoard your “big idea.”
- Investment Money Is Not Yours. I know a lot of people who need to hear this. And not just people who are starting out. If you just received investment capital or want some, please, listen. That money is not yours! You are a steward of that money. Investment money is not there to buy you a new leather desk chair or even pay your salary. Revenues should pay your salary. Investment capital goes to help build the business. Period. Investors are counting on you to not lose their money. They don’t want to bare the burden of all the risk. Your idea isn’t worth as much as you think (see lesson #1).
- Confidence Breeds Confidence. You will be surprised at what you can do and who you can get on board. Don’t be afraid to really show how much you believe in your product and what you are doing. Reach for the stars. You will likely find out that big corporations or seemingly “big players” in the industry are people just like you trying to solve a problem. They need your help and are eager to partner with you. Be confident.
- You Are What Makes the Economy Work. For every successful new business, there are many more failed ones. Just because you failed once, doesn’t mean you will again. You will be wiser because of it. Remember, every giant company started out in a basement or garage. Innovation and dreams drive our economy and create jobs. Someone has to do it. Don’t give up. Dream big.