How many people decide to ditch their 9-5 positions to strike out on their own and become small business owners each month? Wait for it…. in 2011 a NY Times article by Alex Williams (link below) reported over 500,000 businesses start up every month! Imagine that number, really wrap your mind around it. Pause for a moment of reflection. Of these 500,000 how many businesses fail? The SBA states that “30% of new businesses fail during the first two years, 50% during the first five years and 66% during the first 10 years”. With that type of risk why do so many take the leap of faith each month and start a business? Well, maybe they start their own business because they feel very confident they have something great to offer. Maybe its because they have achieved amazing success at their 9 to 5 job and they are ready to use that experience to be their own boss. Maybe they see others running a business and think there is nothing to it. Add that to the dreaded hours of commuting, less than exciting compensation, annoying co-workers, impossible work load, unappreciative bosses or management teams that wont give you the credit you deserve. Ah to trade that in so you can be your own boss, with your amazing ideas, your enthusiasm appreciated, your excitement encouraged, your ready and yet… Before you trade in the security of your 9-5 there is a lot of structure and planning that should be put in place and many times that is enough to end an entrepreneurs journey. If you do make it past putting everything on paper. Ask yourself this, “why do I want to start THIS business?”. If your answer is that you think this is a fast way to make fast money, then you could be mining for fools gold. I like to refer to the first year as an entrepreneur as the year of digging ditches and flipping burgers because that is what it feels like. It is incredible hard work, endless hours and most often any revenue that does come in goes right back into running your business.
I met with an old friend a couple of years ago because she wanted to start a website for consumers to find local restaurants. I asked her why she wanted to start this business, her reply was, “there are hardly any websites like this and I thought it would be a great idea, I am going to make so much money”. Well, in fact there are tons of websites/apps offering restaurant information, reviews, mapping and coupons. So, I asked her if she had a business name? The one she selected was almost exactly like a restaurant website that had been around for over 20 years. Had she just researched a little she would have known this. Instead she put more time into finding investors who also did not do their research. She invested a small fortune in a website but had no idea how traffic would be driven to the site, if there was an SEO program on this very expensive site or if the site would even track the traffic coming in daily/monthly? There was no plan for any of these things. Despite bringing up these questions and encouraging her to take time to research these potential issues, she moved forward and launched the restaurant site. Shortly after going live with the she site was threatened with a law suit and that was the end of that. It is not enough to have a good idea. It is not enough to have investors or websites or even a staffer selling your product. 500,000 people each month start a business and many are brilliant with a fortune to invest, backing, support, demand, etc… What will you have within you that can drive your business beyond concept? Are you willing to listen to good advice even if it means you have a little more work to do before opening your doors?
If you are thinking of starting up a business or in the beginning phases of business here are a few tips:
1. Networking – connect with businesses in your field. They understand what you are going through, what you may go through and many times they will be a great resource for referrals, solutions, leads and support.
2. Business development – take the time to research, grow, evolve and learn everything you can about business, your industry, etc… Keep your tools sharp. If you don’t know it, check YouTube because their is probably a video “how to” about it.
3. Dedication – failure, rejection, fatigue, financial restraints, fear, insecurity, long days/long nights, struggle, challenges, uncertainty, competition, trial and error and waiting, so much waiting – these are all things you will have to endure and manage while you strive to find solutions and work towards your goals. Are you dedicated enough?
4. Get a mentor – find mentors willing to take time to offer you some real world advice and guidance on running a restaurant, accounting firm, wedding photography business, bakery, event planning, etc… Many businesses have succeeded thanks to some kindhearted person who took the time to mentor them and they will pay it forward to you.
If you take this journey you will need support and our family and friends don’t always understand the journey of an entrepreneur. Business colleagues who have been where you are and understand exactly what you are going through will be a great asset for you. Get a really good understanding of what you will need from someone who has been there. Several people who have been there if possible. Get connected and start building these relationships. Invite industry stand outs to lunch and bring your questions, take notes, ask them about their business ownership journey and please, make sure you pick up the check!
Alex William, NY Times: Time for Plan C, http://www.nytimes.com/2011/08/14/fashion/maybe-its-time-for-plan-c.html?_r=0