Entrepreneurship is not for Namby-pambies
Want to start up your own business? Here’s 5 things to keep in mind before you take the plunge. I double dog dare you to read them.
1. The ‘You are your business’ Element
When I was 11 years old, I went to my dad’s office for the day. I wanted a chocolate bar but had nothing in my pockets. So I decided to ask his secretary if she needed help with anything. She innocently doled out some menial tasks like unhooking paperclips and sorting pens and papers, and then I ran back and forth to the amazing state-of-the-art dot matrix printer to fetch documents, separate pages, and collate. After I felt I had infiltrated the team, I asked her if I could use her typewriter. And I made my first $5.
Here’s what I wrote:
Since that first brush with profit, I became incorrigible. Failure, shmailure. Bring it on! I started a promotions company when I was 17, then was part of a video game development LP 3 years later, followed by my first corporate venture that same year. I’m not talking about successes. I’m talking about starting things. 4 years after that I started a non-profit fundraising program, and now we’re into my second corporation, and I am involved with a partnership. Do I like to do anything small? No, plain and simple. Here’s why:
Entrepreneurs think in business. You can run a lemonade stand, or you can run a lemonade stand at the finish line of a marathon. You don’t need an MBA to see opportunity in everything around you, and you need less training and theory in order to be persistent, hard-skinned, tenacious, and persistent. Did I say persistence? Persistence is key.
If you are reading this and nodding because you are like this, or you know someone who is like this, then you understand that unrelenting drive that turns everything on its head. Small kids’ parties become massive community fairs. Good munchies you throw together for a party become a catering business. Your ‘someone should do something about that’ feelings make you the one doing whatever the thing is. And while just reading this paragraph makes some people exhausted, you are just getting started. That’s because you are your business. Or if you like, you mean business.
The fact is, business start-up is 2/3rds obsessive compulsion, and 1/3rd blind altruism, in no particular order. (Note that I said business start-up and not just business.) What this epinephrine cocktail motivates you to do is to keep working. That means you are living, breathing, eating, and sweating your business 24 hours a day. And sometimes taking its punches. I am not trying to sound like a nasty drill sergeant, and I am not trying to swoop in with a pernicious and dissuading slant on starting up. In fact, I bet that if you are reading this with an excited glimmer in your eye and a strange tingle in your gut, then you are just the masochist for the job.
2. There’s No Crying in Baseball
You are having a crappy day. You are swamped. Your boss asks you to do something and you fix him/her with a recalcitrant stare. Your inner monologue is a stream of words like ‘underpaid, taken-for-granted, I have all the talent anyways, I own your clients you good for nothing SOBs!’ etc. There are plenty of days to decide you are going to start a business. But today, is not that day.
There should be no extreme emotion in your decision making process when business (read: you) are on the line. The fact that you work in a crappy place, is not indicative of the fact that you would be an excellent sole proprietor. The fact that your friends are also talented and your brother’s friend is a lawyer, also does not help. Does passion help? Yes. It is integral. But the kind of negative-inspiration daydream/venting session that runs through one’s head on a bad day is not constructive, and worse, it just fuels your ego.
There is one thing worse than working for chronic SOBs who treat you like crap, and that is thinking that you know more than they do. Maybe, in some kind of IQ 2000 super duel, you would know more. But take it from me, that little ‘I got it all’ voice in your head will be leveled in the first year of your start-up. It’s like yoga. They say the first year of yoga practice teaches one thing: humility. So it is in business.
Again, I am not painting an inferno for you to experience. I am not trying to be some veteran. I am definitely not trying to rid the process or equation of entrepreneurship of its joyous moments and heartfelt ‘Eureka’s. I am simply saying that whoever you have envisioned as you in the future, that ‘successful, corporate you’ will in all likelihood, not manifest. You will become and achieve something completely different than when you first set out, but it will be perfect. Without straying into pudding-soft, cryptic drivel, I will say that when you sign up to be an entrepreneur, life throws you curve balls, and does a hefty trial-by-fire. Once you’ve redefined yourself, your concept of success, and marginally achieved it, you will have a satisfied smile on your face and look back at yourself at this point now, and think: ‘I was so green. Now I know that I don’t know..How liberating.’ Alright, enough of the transcendental, and back to your crappy day at the office.
..You hate the way meetings are run. You hate how the petty cash is always out. You hate that there is a ‘no headphones’ policy..
Hate is an identifier, but doesn’t provide much in the way of a solution. I suggest the following exercise. Sit down with your buds and talk about if you are just feeling mutinous, or if you are serious about splitting into your own venture.
- Discuss things like management, accounting, insurance, workflow systems and processes, etc. and how you think they will work.
- Discuss what works and what doesn’t work in your current environment.
- Discuss the roles you think each person would assume in your Utopian venture. Be frank. Does one of you have ideas but can’t follow through? Does one just want to work on technical stuff? Does someone want to give up what they do in favour of running operations? What about owner’s equity? You’ll be able to sense resentment, ego plays, wants, and needs etc. pretty easily. You can always overcome those issues before you start something, but the worst time for them to bubble up is after you’ve signed a partnership agreement.
- Get examples of contracts and agreements you like and see how each of you would edit it. Discuss clauses. Learn rudimentary Legalese.
- Outline your entire would-be business process, and create a list of documents that you will need at each step. Do this together, because this prompts input for new ways of doing things, opportunities to automate, and ways to save time and money.
- Set out a realistic timeline. From the time your crew starts burbling about breaking into your own boy band, give it 12-18 months. To those of you having a seriously bad day today and reading my timeline, I know it feels like an eternity. But you have to figure risk management into your plans. 12-18 months will give you time to co-write a business plan, to author a preliminary policies and procedures manual, gather assets quietly, gather clients quietly, and most importantly, see if your team will stick together.
- All of this sounds like a lot, but at the end of the day, you can look at your crappy job as a well-paid internship that is letting you develop your own Best Practices based on all their complete screw-ups. Sweet.
3. Paper Paper Everywhere and Not a Spot to Think
You will not morph into Don Draper when you start your business. Whether you’re a partnership or an individual there is no glamour to doing NUANS searches, incorporating, setting up bank/merchant accounts, and paying your taxes. As I have just suggested, becoming an entrepreneur will not magically grant you immunity to paperwork. There’s actually more. Remember that the next time you are working a ‘got-my-foot-in-the-door’ type-job and are resenting the fact that you have to photocopy something for someone.
There are more charts to make. There are more letters to write. There are more documents, cheques and authorizations to sign. You might have a good friend who ‘knows databases’ but that won’t stop you from doing all the data-entry. In the beginning (and into the sweet hereafter, unless you *poof* walk into your new business as the Chief Megabucks for Nothing Officer) you will have to do everything. You will have to do dishes. You will be the one printing out the ‘PLEASE LABEL YOUR FOOD’ sign for the kitchen fridge. You will have to sweep floors. You will have to shred paper, do your own filing, and make your own labels. You may even have to make up different voices for your ‘receptionist’ when you answer the phone. After that, you will have to go through the time-consuming agony of training someone to do all of those things, and have them come and ask you a million questions every day, about those labels. The beat goes on. And you still have to keep doing your job. Remember, aside from the paperwork, taxes, CRA calls, audits, lease battles, and post-it note ordering, you still have to generate revenue.
4. Freedom To, and Freedom From
There is a sweet victory in closing a deal over the phone while you have Scooby Doo on mute and are still in your pjs, bed-head crowning your glory. It never gets old, especially if you have mastered the art of sneaking spoonfuls of Fruit Loops on a conference call. What does get tiresome is that because you have no HQ beyond your apartment or house, your once sacred space dedicated to loudly crunching cereals, blaring cartoons, and doing impromptu virtuoso air guitar concerts for the masses becomes sullen and quiet. If you have family, your workspace becomes the throne-room of ‘shhhh’. What’s worse, is that it’s not just your desk that you do work at. It’s your dining room table. It’s your bedroom. The kitchen. No place is safe from your task list and all of a sudden, you have nowhere to relax. You feel compelled to leave the house in order to regain headspace, only to feel propelled back home to the stress of a deadline. Your friends think you are a hermit, and Grocery Gateway starts to know your preferences for supplementing missing items. Welcome to the club.
Working from home is a natural first step to a start-up, so if you can’t stand being by yourself, you might want to look at that. Even if you are working with a team in the beginning – especially in the research and formative period- everyone spends time introspecting by themselves. The feeling of working on a team project in high school ensues. Everyone sort of divvies up their tasks and then thinks they’re doing more than the other. Bullshit follows when someone is late to a meeting, or doesn’t have something they said they would. High school politics stage a glorious comeback as sides are taken and the innocent are smeared in the halls. Sigh.
If you’ve saved up or have owner’s equity ready to throw in with your buds, you will be dealing with a leasing situation. The other reason that I suggest 12 months or so to start up when you’re working together, is you all really need to look at and understand the commercial real estate market. Who knew, right? If you guys are following the ups and downs, it can and will save you dollars per square foot. You will be able to look at subletting versus assuming a lease, and even negotiate renos. If you go for a sublet situation or a ‘collective’ make sure you completely understand their ideas about equipment sharing, common space, and very importantly, signage. I’ve witnessed a couple situations where after moving an office there have been issues with putting a name on the door, or even displaying it inside. Not so great for promotion. As well, if you want to gain a reputation by staying put in a location for a good 3 years minimum, read your sublet agreement with a magnifying glass, and make sure that the building managers have approved your office for subletting purposes. Go so far as to ask to see the agreement between the property managers and the leasee, because any conflicts there can kill your deal in a snap. I’ve seen office moves kiboshed 1 week prior to moving day, with new business cards already printed because of this kind of game. Gathering this type of knowledge takes time.
5. Reputation is Currency
I remember asking my friend Pete Forde how one of his amazing web creations would generate profit, and he said “It won’t. Reputation is the new currency.” Then a gong sounded, and a carp jumped up from a pond, momentarily lost in a swirl of Sakura petals. Pete is more than 100% right. Of course he was addressing something more in the vein of altruistic self-promotion and ‘showcasing’ as business strategy, but it got me thinking.
People don’t stop to think about how naked they would be without the shield of their job. You may get an occasional glare if you’re late, you may get a warning if you do something wrong, or a scolding. But the client-facing treatment usually covers your butt. The client is never told that “JOHN JOHNSON, from 12345 WALLEN DRIVE in our admin department is inept and totally dropped the ball, has no eye for detail, and is scoring low on the hygiene scale to boot”. The client is told: “We apologize for the oversight. Steps have been taken to correct our mistake and ensure your happiness.” That ‘we’ is magic.
It takes a long time to create such an entity. One whose ‘policies don’t allow me to do that Sir, I apologize’, or whose collective apology save the skin of an admin assistant in her first week on the job. Bear that in mind if you’ve ever squeaked by, were late with a project, or disappointed your team. As Big Brother as the flipside may feel sometimes, someone does have your back. Not only does it take a long time to cultivate such a corporate persona, but it is also what people will look for from you when you hire them under your wings. You want to think about that. What kind of environment are you able to create for your colleagues and employees? How does your business in its elemental, human resource structure, reflect your reputation in the industry? What does your business say about you, and what are they saying about your business? Food for thought.
Aside from corporate ‘currency’, it can be even scarier to go it alone. A long time ago a colleague said to me that in the design industry if you do a good job your client will tell 6 people. If you do a bad job, they’ll tell 60. Of course you can help perception along with self promotion, social media, personal branding, blogging.. and don’t forget the filing, sweeping, label-making, and post-it note ordering,
In closing: Perception
I’m not taking sides. As I said before, I love my life and couldn’t imagine it any differently. I start things that sometimes finish badly, but that sometimes win me great experience and success. Those of you who couldn’t imagine any of this being fun, or the euphoric stress that might accompany late nights, trying hard, and the giddy hysteria of failing, may be seeing the glass as half empty. That choice is yours.
For those of you who have belligerently negated every point I made, who maybe even defensively sprung to protect your dreams, and who actually cracked a smile and nodded in anticipation of the Unknown Inc., congratulations. Your glass if half full. Now you just have to sell it.