I had a friend that spent a fortune on entrepreneurship courses, only to find out that the fire in his belly was acid reflux.
Before you start your new venture you need to ask yourself a fundamental question – Am I prepared to commit the mental, physical, and financial resources necessary to make the venture a success when starting a small business?
After you have formulated an answer, share your entrepreneurial desires and plan with your family and closest friends. If you’re married, develop a game plan with your spouse and outline what you are willing to commit. Most importantly, develop milestones and your course of action when they are reached.
Your spouse may look at a glass of water and say it’s half empty and you will say it’s half full. You’re both right, what’s important is the action you both agreed to pursue starting a small business when the milestone is achieved. Consider doing a business health checkup if needed.
Take a few minutes and consider the following questions. There are no right or wrong answers for the questions that are designed to make you think of your situation…
_____ I am willing and can afford to work 60+ hours per week?
_____ What are my top priorities in life and where does starting a company fit?
_____ Does my family support my decision to start a business and do they understand my commitment?
_____ Does my family and I understand and are we willing to accept the financial risk of starting a business?
_____ I am willing to accept career risks (if I am currently employed)?
_____ Do I need all the fringe benefits provided by conventional employment?
_____ Do I have a high energy level that can be maintained over a long time?
_____ I believe that I am primarily responsible for my own successes and failures.
_____ I always try to complete every project that I start, regardless of obstacles.
_____ I am a self-starter and I can work on my own.
_____ I learn from my mistakes.
_____ I enjoy making and taking responsibility for my decisions.
Timing is key. If the stars are not aligned currently and you can’t devote full time to starting your business, do it part time and consider it a long shot. Focus on the product and marketing plan where creativity and innovation will have a major impact. Work through the items that address customer’s needs and provide product differentiation.
You may also be able to resell a competitive or similar product. Based on the company’s sales channel program, you may be able to buy and resell their product and even set up your own website. The major takeaway is not to lose focus, however continue to develop your product concept and more fully understand your target customer needs and market trends.
Financial Risks When Starting A Business
Entrepreneurs are continuously subject to financial risks when starting a small business, so you need to create a personal cash-flow projection based on committing to a startup. When preparing the projection don’t underestimate the time for fundraising. Interested investors will hesitate to dispense funds until a milestone event is accomplished, e.g., a working prototype or a customer purchase order.
Then add 60 days for an investor commitment letter and another 60 to 90 days to negotiate all the terms and conditions, before any funds are received. And don’t operate under the assumption that investors will pay your incurred startup expenses. Rather than paying cash or by credit card have vendors generate invoices with extended payment terms (which will normally be paid by incoming investors).
If you can’t shoulder the financial, mental or the physical burden of starting a business on your own, consider getting a partner. Many of today’s successful ventures originated as partnerships. However you need to keep in mind that partnerships are dynamic. Partner’s attitudes, views and beliefs will change over time.
Consider up front a workable separation agreement when reaching an impasse so that the focus remains on building and not destroying the business and one another.
“Find a partner who has what you lack. As Michael Gerber says in his popular E-Myth book, one plus one should equal three. Don’t partner up with someone who’s just like you. Equity is an expensive way to make friends.
Make sure your core values are aligned. I’ve seen more partnerships fail because of trust issues than anything else. There’s no grey area when it comes to integrity.
Answer all objections up front. Take the time to go away together and do some real business planning. It’s natural to be excited when forming a new partnership, however play the role of the naysayer. Determine why the partnership may not work, and then address every objection.
Be honest about your life plans. The fact is, for women, life will have a greater chance of interfering with our business plans. You can’t predict everything, however if you’re planning a major life change–a move, kids, divorce, providing care for an aging parent–your potential partner should know it.
Begin the partnership with the end in mind. Hire a competent attorney to help you put a buy-sell agreement in place so you both have an avenue for exiting the business. Make sure the agreement has teeth and is enforceable. As any attorney will tell you, it’s much easier to set something up before there’s an issue to contend with.
Assign areas of responsibility and then get out of the way. Early in our partnership, my partner and I doubled up on nearly everything. We worked too much and created a lot of unnecessary debate. Our partnership finally hit its stride when we assigned ourselves different roles and stayed out of the others’ decisions. We should have done it sooner.
Finally, when you do enter into a partnership, remember all the rules your mother taught you. Consider getting a trusted business coach. As with marriage, you tend to get the partnership you deserve. So treat people the way you’d like to be treated. Don’t say things you can’t take back.
Don’t take things too personally when starting a small business. Argue behind closed doors and present a united front. Money and fear–two things you deal with constantly when running a business–bring out the worst in people. Using good manners smooths a lot of the rough spots.”