January 2, 2009

Advice for the New Year

It’s 2009! A new year means New Year’s resolutions. People are settling down from the rush of the holidays and starting to think about how to make this year better than any year before. For some that means a smaller waistline, for others it means taking the entrepreneurial plunge; jumping off the corporate ship and braving the waters of capitalism.

We love this time of year because we service the surge of the latter. January brings throngs of people freshly committed to starting their own businesses and racing to find capital. We love the excitement and are glad to see so many dreamy-eyed business people setting out to change the world. We’d also like to offer some advice to eager entrepreneurs on how to avoid becoming one of the SBA’s 98% statistic who fail within the first two years.

Check Your Motives

Why do you want to be in business for yourself? Your answer to that question will help you know on the outset how likely you are to succeed. Starting a business isn’t easy. Sure, it carries the potential of doing what you love but it also carries a lot of risk and can mean doing a lot of things you hate.

Say you’re a graphic designer, for example, and you want to design logos for a living, it might seem logical to start your own logo design business. You register a domain, print some pretty business cards and . . . now what? After about a month of learning about marketing and sales, you land your first client. Six months go by and you’ve got several clients, accounts receivable, several marketing channels to manage and a bunch of other administrative functions you wish you never spent time on.

Or, maybe you’re an inventor/programmer and you just invented a new search algorithm that’ll put Google out of business. You register an LLC with the state and start driving traffic to the Linux box in your basement over your residential DSL line. Everything goes great until your webserver crashes from too many concurrent users and Google’s lawyers send you a letter for your overlooked patent infringement.

OK, maybe the examples are extreme (particularly the latter), but the point is that owning your own business isn’t just about doing the one thing you love. Entrepreneurship involves turning what you love into a duplicable process, and if that doesn’t sound appealing to you, you may be better off working for someone else. But don’t get discouraged, if you’re doing what you love there’s nothing wrong with doing it under someone else’s umbrella.

Expect Lots of Sacrifice

What your mom told you a long time ago is still true: nothing worthwhile is ever free. You definitely can have a successful business. You definitely cannot have a successful business without sacrificing a lot of time, money and energy.

Face the fact upfront that starting a business is hard work. If you have a family, you might need to start scheduling time with them a week in advance. If you have other commitments, scale them back. There are exceptions, but realize at some point you’re going to be asked to give up something you don’t want to in order for your business to thrive.

Embrace Setbacks

Failure is a natural part of the cycle. You’re going to make mistakes, lots of mistakes. You’ll make large, costly mistakes. You’re going to embarrass yourself publicly on more than one occassion. Bad things will happen that will be out of your control. It’s all OK! Learn to love the setbacks.

If you ask ten people if they agree that failure is a good thing, ten people will tell you, “Yeah, ’cause you can learn from it.” Well, if it’s good, then the more often the better, right? Well if you count how often those ten people have failed, you’ll see that some of them aren’t drinking their own tonic.

As long as you’re not making the same mistakes over and over again, failure is a precursor to success. Whether you caused the problem or it was out of your control, there’s always something to learn from every failure so it shouldn’t be avoided, it should be embraced.

Every time something bad happens, you’ll learn a little more. After years and years of failure, people will call you wise and you’ll realize how all the setbacks were worth it.

There you have it, candid advice to keep you afloat. If we haven’t dissuaded you from your goal to be a business owner in 2009, good, ’cause we’re cheering for your success. Here’s to a prosperous 2009. Go to it, newly anointed entrepreneur. The free market is waiting for you! And if you want some help with getting the money to get going, give us a call.