Perhaps it’s the spring season where life is re-born, but of late I have been besieged by erstwhile entrepreneurs looking to start new ventures. The pattern is pretty similar: the erstwhile entrepreneur usually has a wonderful idea for a money-making business. Often they have done enough research to determine that their idea is unique and they haven’t found anybody else doing precisely what they have in mind.
They are excited about their concept and seek advice on how to take it to the next step and go into business for themselves.
While I tend to be a positive, enthusiastic person who has made it in my own business — albeit it is a consulting business that essentially trades hours for dollars — I have worked with and have been retained by countless entrepreneurial ventures in my 30 years as a consultant. Here is some of the advice I usually hand out.
The first thing I tell the hatching entrepreneur is that while their idea sounds so good, there is a gigantic leap between a good idea and a successful, money-making business. I often liken it to the difference between “an amoeba and a human being.” Clearly that’s a gross overstatement, but it often stops people in their tracks. Entrepreneurs with ideas think they have invented the wheel. Perhaps they are overly impressed with the great success stories like the creator of FACEBOOK and TWITTER.
In reality, going into one’s own business is a perilous, highly risky and gut-wrenching task. There are reasons why more than 90 percent of all new business fail. Most never get off the ground. However, if you persist – and persistence is a crucial virtue for an entrepreneurial venture — here is some valuable advice from one who has made a living on his own for nearly 30 years:
Be totally committed.
The difference between a true entrepreneurial venture and a money-making hobby is total commitment. If you are serious about your new business, it will become the most important thing in your business or working life. You will constantly think about problems and opportunities and you will constantly wrestle with ideas to improve your enterprise.
Look for “what’s wrong.”
As you embark on your venture, you will become consumed with confidence and you will focus on what you believe to be your unique competencies. Unfortunately, in life the glass is not always half full. What you have to do is be constantly mindful of the downside. Carefully probe every idea and procedure and carefully try to find where the problems lie. If you don’t see them on the front end, you surely will discover them at some point. Better to be aware of them before they surface.
Build your ‘dream team.’
Even if you are a sole proprietor you are going to need a team behind you, and make sure these are people totally committed to you and your venture. Here are some people that belong on your team: (1) an accountant; (2) an attorney; (3) a technology specialist, and (4) a collections specialist. As you go forward, this team will play an increasingly more meaningful role in the success of your venture.
Find ways to make sure you get paid.
Especially in a new venture, which is usually under-funded, cash flow is crucial. Customers and clients have no qualms putting pressure on you to produce and deliver, but often let your invoices go unpaid for unreasonably long periods of time. Managing accounts receivable is one of the most difficult tasks that any entrepreneur must face. It is hard to ask people for money. Yet late payments put tremendous stress on a business – especially a new one. You have to find a way to let people who owe you money know that you want and need payment without antagonizing them and jeopardizing the relationship. Good luck.
While books have been written about advice to entrepreneurs, I have provided just a philosophical glimpse to entrepreneurship and have touched on just a few basic points. However, a final guiding principle for the erstwhile entrepreneur is a doctrine that I call fair and reasonable. It is one of my guiding lights. I don’t expect anyone I work with to do anything that is not fair and reasonable nor do I expect to perform any task for others that is not fair and reasonable. Maybe we are simply back to the “golden rule” — do not expect from others what others should not expect from you.