I’ve done it and it was very difficult. Over 90% fail for a variety of reasons. I learned some valuable lessons and here are a few.
Don’t Plan to Live on What you Make for Awhile
Here is an analogy for starting a business I like to use. Mount Everest is the tallest mountain in the world. Above a certain altitude, the lack of oxygen and low pressure becomes fatal. It is called the “kill zone” and climbers know they that they simply can’t stay in the kill zone too long or they will die. Starting a business is like being dropped on the top of Mount Everest. You have so much time to get out of the kill zone before you die. So be prepared. You’ll need money, not just for the business, but for you to live on. I’ve watched many, many different startups and the biggest difference between success and failure is how long they can hold out without a reliable income source while still investing some money in the business. Decide what you are willing to do before you start the business. I started working part time to make money to live and then dipped into my own retirement to keep the lights on. At the same time, we cut expenses and watched our pennies. Be careful about giving up too much. Remember that most will fail. Have a plan to get out in the back of your mind.
Stay Focused, but Flexible
Your business probably won’t take off as quickly as you think it will, but don’t be too quick to change direction. I see a lot of entrepreneurs ultimately fail because they are always doing something new. Over time, this feeds a bad perception with others and damages your credibility with potential customers. You will, however, need to be flexible. You will learn some a lot of things as you work to start your business and be prepared to apply that knowledge.
Act Successful from the Start
Many entrepreneurs are apologetic for their lack of success. They tell everyone they know they are just starting out and don’t know what they are doing. While the humbleness is admirable, it is also potentially damaging. Hang out where successful businesses hang out (i.e.) Chamber of Commerce, civic groups or local nonprofit boards). Avoid spending all of your time with other entrepreneurs.
Find Successful Mentors
Many entrepreneurs avoid talking to experts because they feel like they will be exposed as unsuccessful. I get it, but my advice is to get over it. You need experts to help you along the way. You need someone who is willing to tell you when you are off track. I started my own advisory board with successful business owners who advised each other and held each other accountable.
Avoid Big Capital Expenditures Early On
Many new businesses secure a loan and use the money for a killer new website or a nice office space. Be careful. When I started my business, I spent $5000 on a laptop with statistics software and a projector. None of these things were necessary as I got things rolling. I see many businesses buy office space and take on expensive leases when they could easily find something much cheaper. When you first start, you don’t know what you don’t know. Later on, many of these expenses will be advisable, but learn what you can before you spend what you’ve got.