Look before you leap: Consider potential sacrifices, challenges before starting a business
After 38 years in corporate America, I have retired and started my own business.
I have worked with and known personally hundreds of individuals over the past 38 years who started their own business, so I have been taking notes about who did it well and who did not and why.
This is what I have learned so far.
Hopefully you have been thinking about this for some time.
Starting a business is not a knee-jerk reaction to something — you are not getting into something you know nothing about or do not have a passion for.
I have known many people who thought they wanted “a good hobby” or “a little part-time job” and invested in and started their own business only to find out it was a nightmare. They got over their heads quickly with little expertise and less and less money to bail them out. They would have been better off bored than broke.
Running your own business can be wildly rewarding, but it can also be a disaster. Do your homework, research, talk to lots of people about it and get advice from the experts before starting you own business.
I started thinking about this adventure several years ago. I left corporate America as a business leader, and I am starting my own consulting and speaking business. Over the past five years, I have been writing and making notes about things I wanted to say and talk about. I watched other speakers, good and bad, and read tons of books and read articles about what this journey might look like.
I might crash and burn, but I have a running start on what I want to do.
This will impact your family.
It will take time to start a business, and some of that time will be family time. Are they wanting this to happen for you, or are they dragging their feet and don’t want you to do it?
You have to get your family, primarily your partner, on board, or this is going to be a very difficult. The cadence and flow of your predictable order in your home life is going to change. You will have long days, long nights, lost weekends and changes in your schedule.
I have known dozens and dozens of families that wanted to open their own retail business thinking it would be fun. After a couple of years of 70 hour weeks, never-ending employee issues, working every holiday and fighting against increasing competition, they wished they had never done it.
You partner and family must be on board, or reconsider starting a new business.
How’s your health?
If you are retiring, you must not be a spring chicken. That’s a phrase from growing up in South Arkansas — it means you are not young anymore.
Seriously, if you are in shape, can you find the time to stay in shape? If you are not in shape, maybe this should be your first priority.
I know this is preaching to the choir, but without health, what else matters? Don’t rationalize starting a new business will be easy and you will start working out — you will not.
I put staying healthy on my short list of things to do everyday.
Have you written a business plan? Does it have real metrics and measures to tell you if you are successful?
This does not have to be ready for a Harvard Business Review, but do you have a plan?
It should at least describe what you want to do, why you think its important to someone other than you, the size of the prize and some basic metrics like how much you are willing to put into the business and how much you want to make. You must have some dates and milestones to guide you.
Be clear, honest and disciplined to look at your metrics and follow them. This includes how much cash you are willing to invest in the business. If you have a limit, then that’s the limit — stop spending.
Test, learn, test, learn before you invest money to scale your business.
Your instincts and even insights might be right on target, but your ideas and initiatives might not be. It is extremely rare to have the first idea be a home run. It takes quite a bit of trial and error to get it right. Do not invest in an infrastructure and a lot of assets (inventory, buildings, equipment) until you are certain you have a winner.
The way you know you have a winner is if real consumers or customers are buying your products or services. It’s not a winner simply because you love it. A good friend once told me, “It ain’t compelling if it ain’t selling.”
Are you willing to walk away from this if it flops?
I know a few friends that have gotten so emotionally wrapped up in their business after retirement that they wished they had stayed in their full-time job. It was more predictable, and probably boring for them, but they are not in over their heads with money and commitments that it’s not what they were looking for in retirement.
Have firm metrics and decisions dates to follow. If you find you are always extending the dates or changing the metrics to give yourself more time, then you are not being honest with yourself.
If it’s your life’s passion – then go for it.
If this is what you have been dreaming of your entire life, then just go for it.
A buddy of mine left the corporate world 12 years ago to start his own business, and he did not even know how to turn on his computer. (His admin did everything for him.)
The growth curve for him was steep, but it was his dream, and he figured it all out. He never looked back, never complained, just kept moving. Today, he is a rock star in his industry.
So, if it’s your passion, let the hammer down.