12 Things to Ponder Before Starting Your Own Business
There has been considerable talk, and many articles written on, “The Great Resignation.” What it is about, where did it come from, and where have the millions of workers gone who left their employers during, and post-pandemic?
Pre-pandemic, an employer could advertise to fill a position and they would get hundreds, even thousands of replies. Granted, the bulk of these candidates were not a fit for employers because they were not qualified. Some were lacking all the experience needed (Wannabees), some were long past their relevant experience (Longagobees), and yes, some were a fit, but the employers needed to go through a lot of thorns to find the roses. Not so much now. It’s a candidate-driven market.
Employers are lamenting it is harder and harder to find qualified candidates. Even recruiters admit it is requiring far more time than before, and the objections they meet when they directly recruit are different than before. Candidates want what they want, and they do not want to settle. They are reluctant to change to a new employer that does not regard work-life balance the way their current employers do, what with the advent of remote working.
It is no longer an employers’ market (an abundance of candidates to select from). There now exists a dearth of candidates. Yet, employers think they can still find a purple squirrel (a special candidate that fits every “must-have” on a job description, who also has a BS in Business from a prestigious college, a Harvard MBA, and 15 years of experience packaged in a twenty-five-year-old).
So where have all these candidates gone? Some have left their field to enter another. Some have left their responsibilities to opt for something less taxing, or more intellectually filling. Mothers and fathers have opted to stay home and raise the kids while the spouse works. I am not going to offer a complete analysis here. What I learned, however, is that Americans have filed more than 4 million applications to start new businesses in 2021 through September, compared with more than 3 million applications at the same time last year. So “The Great Resignation” has spawned 4 million people to remove themselves from an employer-employee relationship. By the time the 4th quarter stats covering October, November, and December are available, it could be another 1.3 million who have started their own business, totaling over 5 million for the year.
If you are one of those people contemplating a venture of your own, I would like to offer you some advice through my own experience. I am the founder and president of two businesses, each in different states. I am the founder, and served as president, of an extraordinarily successful non-profit, too. So, I know something about starting businesses. I ran one profitable business for thirty-seven years, and I am now in my 7th year in my current business in a new state. I’m about to start another. I’ve advised several people on how to get into their own business and have given them support and direction once they got started.
Hopefully, these points will spawn thinking on your own as to entering, or not entering, your own business. Here are the points for those of you who want to make that leap of faith. Warning: Think about all these before jumping the chasm between the known and unknown.
Paychecks. I haven’t had a “paycheck” since January of 1977. I know that sounds strange. Most of you were not even born then. So where did my paycheck go anyhow? I left the cocoon of a sales management job with a Fortune 500 company to go into business for myself at the age of twenty-eight. And since then, I’ve been working on pure commission. In other words, after I pay all my business expenses, and put away some funds for taxes, what I have left is mine. However, that profit is not a bag of cash you can take to the bank. You cannot take it all for yourself either. In many cases, you will need to invest it back into the business for advertising, accounting fees, office supplies, etc. Any number of things. If that scares you, maybe you don’t have the intestinal fortitude to go into business. Bottom line: everyone else gets paid before you. I know what you are thinking. You will make so much money from the outset, you will have no worries. But after you have experienced an extended period without sales, without income, you will understand. Paychecks seem comfortable and dependable and supply a sense of “security.” But it’s false security. Paychecks stop when your boss decides to let you go for any number of reasons (headcount reduction, reorganization, boss leaves and a new one takes over who cleans house, etc.). In your own business, you supply your security. You are the one who must produce the income. Some nights you will lie in bed, thinking about who you owe, who must be paid, and where that next sale is coming from. If you cannot accept this point, maybe the “security” of a paycheck for a JOB (Just Over Broke) is what you need. Your confidence, faith in yourself, skills, and talents are the security you will have. You will just need to muster up your courage to be in your own business.
Sleep Nights Funds. This won’t mean anything to you now, but aside from all the money you will need to layout for rent, office equipment, supplies, inventory, and whatever you must have to run your business, you must also compute your living expenses and multiply it by at least 4 to 6 months, or longer. Put that money aside, and keep it sacrosanct from everything else, not to be touched for any expenses for the business. You will thank me later when you are lying in bed worrying about where your next sale is coming from, yet knowing that your mortgage (or rent), utilities, car expenses, and groceries will be paid for tomorrow because of your sleep nights fund.
Chief Cook and Bottle Washer. Like spinning eight plates on eight tall dowels, your head is going to spin. One minute you are on a sales call, the next you are acting as the IT department, the next the purchasing agent, followed by the HR director. You will have managed all these decisions with aplomb, only to be reviewing contracts like a lawyer, unclogging the office toilet like a plumber, and making decisions on software and hardware while you work on your advertising. Suffice it to say you are going to have to oversee it all. It’s nice to work someplace where all that stuff is handled by other people, but now you have nobody to rely on unless your spouse is in the business with you. And that doesn’t work for everyone. You will make decisions on important things like buying the right computer equipment and trivial things like what kind of ballpoint pens you need. Decisions, decisions, decisions. It will seem like that is all you do. Oh, and don’t let all of these interfere with getting new business, because without new business coming in the door, you won’t be needing to make any decisions at all, other than those around what to do when your business fails.
Focus. Did I mention you will be distracted in dozens of ways? See # 3 above. Trying to stay focused on getting business is of the highest priority for your new business, but it will seem that everyone and everything is taking you off track. You may have focused on your work when you worked for someone else, but you took breaks and went out to lunch. Now focus is far more critical. Don’t get tempted to get into things that look like they’d be interesting but are just major time sucks. They take your focus off getting business. By the way, you’d be well advised to watch videos, listen to podcasts, or read books on selling, particularly if your role before was not in sales. Because YOU are the sales force (until you are big enough to hire other sales representatives). Just don’t watch and read these things while you are at work.
Time Working. Remember when you used to work 9 to 5, but somehow got away with coming in at 9:15 or 9:30 AM on some days, took a nice forty-five minutes to an hour for lunch, and still left the office at 4:40 or 4:45 PM? Well, forget that. In your own business, you will get in early (first-in if you have employees), and you will leave last – sometimes well into the evening. Expect to leave by 8 or 9 PM on some nights. That’s what pouring yourself into your business is all about. But wait. Even if you left at 5 PM, you will be thinking about, or working on, your business (at least in your head, if not on paper or a computer spreadsheet), until you go to sleep. Oh, and there will be Saturdays and Sundays that you will be working, too. Get used to it. You will have to forego some personal social time. Your friends will not understand why you are working so hard in the first few years, unless of course, they are starting up their businesses, too. If they are, stay close. You can learn from each other even if you are in two different businesses. And speaking about friends – those that cannot relate to why you can’t go out on a weekday night, or spend Sunday watching sports with them, will eventually stop asking you to join them. Don’t be surprised if some of them drop out of sight altogether. Since you won’t be working those office hours like you used to, expect to work 60, 70, 80 hours a week – and know the difference between working IN your business and working ON your business. What you do early on in your business sets the foundation for the future of your business.
Self-discipline. Spineless, cowardly, fearful need not apply. Let’s face the facts. It takes guts, real guts, to go into your own business. If you are single with no responsibilities other than your own. Easy-peasy. If you are newly married, like I was, and the two of you enter the business together, it’s going to take more guts. Your marriage is in its infancy and the stresses of a new business venture can take their toll. On the other hand, at the end of the day, neither of you will have to tell your spouse how your day was. You will each already know. Husband-Wife or Wife-Husband teams only work if you are truly a team and can make a commitment to make the business work. Don’t even allow failure to be an option. If you have obligations – spouse, kids, mortgage, car payments, your kid’s braces, private school, or college to pay for, it takes REAL And an even deeper commitment. So, don’t start if you don’t have the stomach for it.
Self-motivation. You are going to have some great days with little and big successes. But plan on some days not going right at all. You might get down on yourself or the business. And guess what? Nobody is going to kick you in the butt or have a talk with you about needing to be positive. You are going to have to motivate yourself. So, get used to that, too. Get some motivational videos, CDs, join podcasts, use YouTube. You’ll be surprised what is there if you dig for it. Subscribe to something. Join groups on Facebook or LinkedIn for new entrepreneurs. You will have to find something. Staying down and unmotivated will surely affect you, your employees, your spouse, and your kids. Negativity is a drag on everybody and your business. Would you want to do business with someone like that?
You must have fun doing it. If you cannot picture yourself having fun doing your business before you enter the business, don’t start. Life is short enough as it is, why do something that doesn’t look like fun or that might make you happy? If you got into it and it is not sparking joy, ask yourself why and fix it! Everyone will see if you approach your tasks begrudgingly. What customer or employee would want to engage with a GloomyKerploppus (credit: Professor Wormbog’s Gloomy Kerploppus: A Book of Great Smells –July 1, 1977).
Principled & Ethical. You will be building your reputation as a business owner. Your customers, vendors, competitors, and lenders will be watching you. Very closely. Want to build a positive reputation quickly? Be honorable. Deal with everyone fairly. If you are in a bind and you can’t make a payment to a vendor, call and advise them of your problem. They might work with you on a payment plan. The worst thing you can do is not communicate with them. Hiding, and pretending the bill will just go away and be forgotten is a dumb way to manage it. Treat your customers with respect and dignity. Delight your customers. Remember, that they pay your bills and are the source of the money you will take home. Don’t cheat anyone. You know the difference between right and wrong. Be principled. Be ethical.
Learning new things on the fly you have never done before, without much support, if any at all. This is called trial by fire. Here, you are flying by the seat of your pants, forced to learn stuff as you go, making decisions (sometimes big ones). Are you okay with making decisions that will potentially affect your business for months, or affect you personally? Let’s assume you are in a light, 2-seater aircraft with a pilot who knows what he is doing. Suddenly, he has a heart attack and is unable to fly the plane. You have 2 choices. Take care of him and certainly crash. Or fly the plane yourself as best as you can and land it somehow (even if it is a crash you can walk away from) so that you can save him once on the ground. Whichever you choose, you will be doing it by learning. Fast. “The only way to find out if it will work out is to do it.” (Simon Sinek). You must always be willing to adapt to new situations. You would not learn that by reading about it or watching a video about it. You would need to act. Now. That is what happens in business sometimes. Learning new things is hard. You have to fake it till you make it. Will you need an airsick bag to get through the first several months? If so, maybe owning a business is not such a great idea for you.
Determination. Pride. Don’t expect to be motivated every day to run your business. You won’t be. Don’t count on motivation. Count on self-discipline. You need to be super-determined that you are going to make a success of your business. Show pride in it. I remember seeing the owner of a Chinese restaurant out on the street picking up trash and pulling little weeds by the sidewalk in front of his building. I asked him why he was doing that and why he didn’t he leave it to someone else. He said that if people see the trash and weeds, they won’t have a positive feeling about his restaurant or him. He took personal pride in his business. Learn from him.
Here is something else to think about. According to statistics published in 2019 by the Small Business Administration (SBA), about twenty percent of business startups fail in the first year. About half succumb to business failure within five years. By year 10, only about 33% of businesses survive. Want to know why they fail? Read here: Why Small Businesses Fail: Top 8 Reasons for Startup Failure
Now, if none of this stops you and you choose to proceed in starting a business, congratulations! Wishing you every success!
