One year ago today, I pulled out of my employee parking spot and headed toward the biggest risk of my career in starting a business. This first year has had its share of accomplishments and challenges, but the most valuable result of year 1 is what we have learned as the business has grown. In this post I am going to offer advice to anyone who may be considering "the leap" that I took a year ago. By no means does this come from a grizzled entrepreneurial veteran, but rather a snapshot from a founder one year into the journey of building a company. It is through this lens that I offer these 10 pieces of advice.
Have a plan. I used to think that entrepreneurs were crazy, risk-taking superheroes that had magical powers. Knowing that I did not have the power to fly, before I took the leap I spent time (216 days to be exact) building a parachute in the form of a plan. While no plan completely prepares you for starting a business, you need to have a value proposition, a strategy for generating your first leads and some idea of how you will execute.
Maintain structure. I have often said over the last year that there is a fine line between being self-employed and feeling unemployed. Not having a boss can make it tempting to play more and work less, however it is important to maintain productive routines. When I started out and was working from home, this meant getting up early, managing stress through exercise and setting goals for the day & week and holding myself accountable to get them done. Once an office and team members came into the picture, structure and routine naturally evolves.
Get comfortable outside of your comfort zone. For even the most confident of people, redefining your paradigm of yourself through starting a business will test your self esteem. You will step outside your comfort zone consistently since you can no longer rely on others to market, sell, operate, manage finances, etc. Even after others come into the picture, the business owner is still ultimately accountable and this forces you to get comfortable with all aspects of your business.
Talk to as many customers as possible. For even the most outgoing of entrepreneurs this can be daunting, however you must talk to as many potential customers as possible. Going into these conversations, you need to have a 30s description of your value proposition since this will be your one opportunity to make a first impression. It is important to talk with as many customers as possible to get feedback on the degree to which your value proposition fits their needs.
Change your plan. You remember that parachute you built before you took the leap? You must be prepared to tear it up and build a new one on the fly if feedback from your target market tells you that you should. In our first year, we have pivoted 3 times and I know there are more to come. Emotion and sentiment must fall by the waste-side when you are building a business. The market doesn’t care about your dreams and so you need to adapt your business model based on market feedback or it will fail.
Sell! Sell! Sell! For a new entrepreneur that has a background in technology or operations, it is easy to want to stay in your comfort zone and spend all your time designing a great product or looking at financial spreadsheets. Note however that the first line on the Income Statement is called Revenue and this requires you to sell. Selling doesn’t mean that you have to try to push a customer to buy something that they don’t need. Rather, it is the process of articulating what value your product or service delivers and listening to customers to determine whether they have a need for that product or service at that time. Once you adopt that mindset then you will take a lot of pressure off yourself.
Don’t sell too much. While it all starts with sales, you need to ensure that you don’t sell too much too quickly. You must ensure that you have ability to deliver on the promises that you make during a sales cycle; in other words, you must execute! Overextending your business by taking on more than it can reliably handle is a recipe for a tarnished reputation, which has varying degrees of impact depending on the type of business you are running. While sales can be exciting, you must be realistic about your business’ capacity.
There is a huge difference between profit and cash. Anyone who has taken an accounting course has an intellectual understanding of the difference between profit and cash flow. Anyone who has run a business however, has a much more practical understanding of this, particularly after hiring staff. Paying people to do work that generates value to a customer who then pays you X days after that value has been delivered can mean significant delays between cash out and cash in, and you need a way to bridge that gap. There is a reason for the saying “cash is king!”
Carve out time for long term thinking. While a tremendous amount of effort goes into keeping the business running on a day-to-day basis, you need to have a long term perspective. What does the ideal state of the business look like in 3, 5 or 10 years from now? Can you see a path from where your business is right now to that longer term goal? The long term vision can always change, but you need to have a vision if you are going to scale.
Have fun! Starting a business is unlike any other type of job and if our first year is any indication, it comes with lots of peaks and valleys. For most entrepreneurs the financial payback isn’t worth the risk of starting a business so the real payoff comes in the form of job satisfaction. Among all the stress and firefighting, you need to allow yourself to have fun.
At the one year mark, we will pause for a moment and look back with pride on what we have accomplished... but we’re still very much at the beginning of our trajectorE.