How do you start your first business?
I've taken classes and read plenty of books and articles about what it takes to actually start a company, and I'm positive that I'm capable of executing everything I've learned about.
Why, then, do I still feel like there's a huge gap between my knowledge and my readiness to actually start something? If you started your own business, how did you close this gap?
Personal experiences are very welcome.
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Short answer: grit and moxie, Ryan!
My first Q to you, and one I don't think has been addressed so far, is: do you want to start a business in a field you already know, or something brand new and thus outside your realm of experience? The latter, while certainly actionable, will probably require more support and resources while you get up to speed on both the nature of the business itself as well as being an entrepreneur.
When I decided to launch my marketing communications venture, I had already been doing this type of work in increasingly responsible corporate positions for close to a decade, so I felt I knew the nuts and bolts of the field. I kept my regular job while I prepared to go solo, and kept my plans under wraps. Folders began mushrooming on my dining room table. I chose a business name, secured a dba/business license, got stationary and business cards printed. I created an office in a corner of my living room (all of this in a one-bedroom city apartment!) with file drawers, computer, printer, fax (this was in prehistoric times :-)
In the midst of it all, I landed my first account, which was a plane ride away, so I was virtual before virtual was "normal".
Was I scared? Sort of. I transmuted fear to excitement (they're the identical energy in the body). I knew I would make it; I had an inner knowing that this was the ripe moment for me. I also had money in the bank (always a good idea when you start a business). The first few weeks were quite a challenge ~ at one point my first and only account, a startup itself, looked like it had lost its funding, and I felt the bottom drop out of my stomach. But that situation resolved, I soon landed other accounts, and the business took off.
When I started my coaching practice years later, I felt a similar uncertainty at the outset. I remember coaching my first few clients with all my texts open on the table in front of me, since clients couldn't see me over the phone, lol! I soon grew confident enough in my knowledge base and in myself to trust that what I needed to know would be there for me in the moment ~ and it was.
You will learn an amazing amount every day once you begin, Ryan. I congratulate you on your soon-to-be-thriving new venture! Feel free to connect directly for more feedback/support.
Here's my take Ryan: You feel like there's a gap because you can't reconcile the unknown with the known. You know you don't know everything and you rationally accept that you can't know everything. Still, if you're going to start a business it's likely fuelled by a passion, and the fear of some unknown torpedo waiting to sink something close to your heart is causing you to stutter.
I think some of the posts here imply but aren't saying it directly: accept failure before you start. Accept it not as inevitable, but as likely. Your job as a new entrepreneur is not to be successful - you just can't control all the variable to ensure that (market trends, economic backlashes, introductions and handshakes, etc.).
Rather, your job is to go peddle-to-the-metal all out. Give it everything you have and accept that everything you have may not be enough. That's okay. If you really are an entrepreneur you'll give it a go a few times (regardless of how successful you are - just look at Elon Musk).
So - your readiness isn't so much about knowledge, it's about committing to the reality of "doing". It's all on you - and that can be a scary thing. There's no one else to blame, no one else to bail you out (as one person pointed out, no amount of seed money will make a bad business model profitable).
And this is a strategy I always recommend: if you want to start a business [on your own/with a team] then start it [alone/with your team]. You need to find the "you" in your business before you're ready for a consultant or advisor to come with help. When you're in the thick of it, and you can start to identify the threats by name and/or sight, and you have a sense of what help you exactly need, that's when you're ready to reach out for help.
I just went for it after leaving my public service 9-5 job and here I am, not looking back - it's now or never "... an opportunist that sees the gap, fills it, and does it with class and creativity."
GO FOR IT!
Go to www.legalzoom.com to make the process a little easier. Other than that, everyone else pretty much hit the nail on the head. Formal education will give you a textbook foundation, however, the best knowledge will come from self-education and personal experience.
Suggestion: Try to find another small business that's presently in or close to the category or market you're thinking of entering -- and get a job with them, doing anything, or even volunteer part time if you have to. The idea is to learn the business and the market from the inside, in real life -- on someone else's nickel! Analyze carefully what works and what doesn't for them. Learn from their mistakes and successes, and all the while be thinking how you could do it better, smarter. You can also get invaluable insider information on business operations, suppliers, and everything else that you'll need to know. In 6-12 months you'll have learned ten times more than all the books have taught you to date.
Perhaps the most important thing you'll learn is, you're probably smarter and harder working and more innovative than your employer -- so you CAN do this thing! Then dive in and don't look back!
Then when you're ready for some strong marketing for your new venture, come see me! :-)
You start with research, the more the better, about your target market and your competition. How big is your market, how different is your product from what is currently available and how much capital do you have to commit to the product? In essence you need to walk through all of the steps of creating a business plan. I've started up two companies and that is what I recommend for budding entrepreneurs.
I assume you're in the US. That's where I am, anyway. There IS a huge gap between what you may have learned in class and what it's actually like. The good news is that this can be said for pretty much everyone.
The short answer to your question is that you have to "fake it until you make it."
I have a Bachelor's degree in business, but I use my technical skills a lot more than what I learned in business school. That is not to say that it's not handy to have a solid grounding in business concepts.
My story: I had a lot of technical acumen from my nine years in the Navy - I was a technician and an instructor. After finishing my degree, I got out of the service and went to work in the corporate training sector, selling Interactive Videodisc training programs. It was at that job that I learned how to write a solid proposal, manage a project, and otherwise conduct business, but I was doing it for someone else.
I became a freelance writer and training developer and did pretty well with that, but a couple of friends (who were also freelancers) and I decided to incorporate. It was really a lot more about staying employed in a shaky economy than anything. We wanted to be sure that we were able to manage our own destinies. We kept our day-jobs, but started to look for work under our own banner, and ultimately, we quit our jobs, made the company our sole source of income, and became employers. Believe me, it felt like play-acting for at least a year, but over time, the organization legitimized, we started making a lot more money, and had a blast. We also took on a lot more headaches (sidebar - choose your partners carefully, there is a 50-50 shot that you will find reasons to part company. For me and one of my former partners, it meant the end of a friendship).
Over time, I bought out all of my partners, ran the company by myself with some key employees, and then merged with a consulting firm. Now, I have partners again, but I can't really remember what it's like to work for someone else. There's great freedom in that, but I always answer my phone - even on vacation, and generally, I'm on call anytime, anywhere for emergencies that pop up. They do pop up.
So, target what you want to do, and if you have to, make small steps toward it, but MAKE STEPS. Figure out the rest as you go along - you'll be fine if you have a good accountant, and sometimes, a good lawyer.
If you need more help, you might try SCORE for a mentor, and look at your local economic development entities who are all pretty much oriented to fostering start-ups. I see you're on LinkedIn from your picture. Connect with me, and ask me any follow on questions you might have.
I believe it was Charles Schwab who said "Nothing is impossible for which you have infinite enthusiasm."
Best of luck. Starting a business is an exciting thing, and if it catches on, its very fulfilling.
Raland Technologies LLC
I have successfully started several businesses. Now I am serving as a mentor at SCORE. The Service Corps of Retired Executives (SCORE) is a nationwide volunteer organization sponsored by the Small Business Administration (SBA) that helps entrepreneurs start their own business. In 2012, we help start over 32,000 new businesses. For you to get started, please go to the score.org website to download a free 32-page workbook that takes you through the process step-by-step: http://www.score.org/resources/how-really-start-your-own-business The score web site will provide you with the contact information for your local SCORE office to call for questions or to schedule a one-on-one mentoring session free of charge. What have you got to lose? Give it a try.
Ryan, the conventional wisdom is that most business fail due to insufficient capital, but the root cause of the failure is an ineffective business model. There are many well capitalized companies that fail every year because perfecting a business model is a costly process of trial and error - one that a lot of companies will not survive. With adequate capital, good planning, a lot of hard work and a little luck it can be done, but for a first business I recommend buying a proven business model from someone else i.e., a Biz op, distributorship or a franchise. This will teach you how to run a business, develop the skills you need and give you much better odds of survival. Then you can take what you have built and parlay that up to the next level. Most business owners are working their way up the food chain, so your first business doesn't have to be your last - it is just your proving ground so to speak. You can check out my website for more on this if you like (www.dearbornwest.com) Hope this helps, Dan
I think that it's great that your prepared yourself to start a business. The one factor that seems to be missing, unless I missed something, is WHAT business you want to start.
If you want to be in business just for the sake of being in business, you're likely to fail because the passion to succeed in bad times will be missing.
If you've got a passion for something, go for it. Grab your "passion" and make it happen. With your preparation, you can't help but succeed.
No passion, no business.
Start with a professionally prepared business plan complete with a one year forecast and a break even analysis.Most new businesses fail due to lack of capital so make absolute certain that you have sufficient capital for a year.
You'll probably always feel like that as there's so much to learn and it sounds like you've got more than enough theoretical knowledge but my best advice is to just get stuck in - taking the first big step is always the hardest but you'll learn more at the coal-face than sitting in a class room. Find start-up groups such as Meetups in your local area, find yourself a mentor/advisor but just do it and, as you come up against questions or challenges, then research and find the answers you need. Your most important assets, in my humble opinion, will be your determination, courage and passion for your business....everything else is just admin!
Everyone has made some great comments. I would also like to add that without a company guiding you, all the books and classes you read and take are not the same without following a self starter. We have plenty of those in our company and they can guide you (without any fees) on how to start, what to do and how to do it right the first time. If you're interested, take a look at our blogshttp://www.prodsllc.com/funding/blog/ and go from there.
Are you passionate about what you want to start? That's a key factor that no amount of books can teach you. If so, then just go for it...you have to start somewhere, so just START! Via Corbett Barr, quoting Dave Navarro: "Think of expertise not as an absolute (as in, I have to be the best in the world so that I can teach anyone), but as a continuum (I have more expertise than some people and therefore have something to teach those people)."
Hi Ryan: My advice for whatever it's worth would be to just do it. I don't think you need to wait to have certain knowledge or amounts of knowledge to get started. Much of what you'll learn will be through experience and that will happen quite rapidly depending on what we're talking about. But I understand that the process can cause anxiety or overwhelm, especially when you ponder the beginning the hurdles of starting an LLC or similar type structure. For awhile I've had a side business which music. I'm a musician. I have a corporate client which 1099's me for my work. I went to the bank and the rep I spoke with took care of getting me started. Went to the IRS website, filled out the biographical info and got me a tax ID #. Just like that I had it all set up. No charge. So that's one way you can do it. You can also do the single member LLC thing. If you'd like some assistance or a referral to an accountant who can explain in greater detail all the paces you have to go through message me privately and i'll give you a name. firstname.lastname@example.org. Is your idea to provide a service, a product? The other thing I think you might want to do is continue working in your day job and develop the concept/business model/business plan in your off hours unless you feel business will happen immediately upon opening. This is all just a long about way of encouraging you to just do it. Hope that's helpful. Mike
Ryan - I think the short answer to your question is that you probably never will be completely ready before you actually start your new business. The only way to bridge that gap of knowledge you are talking about is to actually get started. You are never going to be perfectly ready to start so just start. By the way that is probably going to be true for your next venture and the one after that. Never assume you know everything there is to know as that would be a big mistake. Finally I also completely agree with Natalie's comment about having good people around you. People you can consult with that have a lot of experience is very helpful. Good luck.
Isn't that the golden question :)
I don't know if you'll ever 'feel' like you're ready. There's a ton of learning that you do when starting a business, but not everything you need to know will come out of a book or an article.
You'll fail and you'll succeed. You'll have your ups and downs. It's important to test things out first on a small scale and have a good group of people around you who will tell you the honest truth about what you're trying to do. Good luck!
Hi Ryan, Sounds like you are off to a good start. Learning about entrepreneurship and making sure it's something you want to get into is a good first step. Going to local startup events is another great way to talk to people and get a sense of their life and process of staring a business. Do you currently have a job? What type of business do you want to start? I think spending a lot of time learning about your market, identifying your target customer and then talking to some of those potential customers to confirm they see the same problem and agree that your solution works...and that they would be willing to pay for it. You can do a lot of this background work on the side if you have another job. You don't need a formal business plan, but working through a plan is very helpful, particularly thinking about startup costs and timeframe needed to get up and running, as well as what kind of team you would need. There is a helpful startup roadmap under the more tab above where I have found a lot of great resources. You might want to check it out. Overall, taking the leap was super hard for me. To make the transition easier, I started doing a lot of the above on nights/weekends while I was working at a full time job. Only after I was confident I was on to something did I quit my job. Let me know if you have more questions and good luck.