Is your goal to start the business you've always wanted? Do you have a million dollar idea but unsure of what to do first, second and third? Would you like to leave the cubicle world behind and earn a living through your own entrepreneurial drive?
As an entrepreneurship educator and venture investor, I spend a lot of time studying why promising startup companies succeed or fail during their first years of operations. A key factor that affects startup viability is how fast entrepreneurs adapt to their new job description as a business owner.
Many entrepreneurs say they started their companies for the opportunity to pursue their heart's desire. New bakery owners like to bake. Software technologists like to write code. Contractors like to build. Filmmakers like to make films. But successful entrepreneurship is not defined just by how well you bake or write code, but how well you manage your overall business. You can direct a brilliant film, but if you don't make money at it, you may not get the opportunity to make a second film.
It's my view that new business owners who assume that entrepreneurship is all about the freedom to do "whatever I want, whenever I want," are at high risk of business failure. Being the boss of a prosperous business involves focus and careful decision-making. In contrast, too much managerial spontaneity and freewheeling fun costs more than a young company can typically handle.
Here are three productive tips to help you make the mental shift from salaried employment to prosperous self-employment.
- Pay attention to cash. Businesses close when they run out of cash. It's that simple. As the boss of your startup enterprise your top priority is to make sure your company always has enough cash to operate. This means that you have to embrace numbers and money issues; take full ownership of financial projections and understand what kinds of business decisions can drain cash faster than others. You don't need an MBA to manage cash well, just a desire to do it. Check out some accounting books or take an accounting class to boost your money management skills.
- Plan to achieve. It's not enough to hope to succeed; you have to plan to succeed. Hoping for customers, won't get them to your Web site. Hoping to raise money from investors won't get you in front of top check writers. Hoping the check is really in the mail is not the best way to collect past due invoices. Successful startup entrepreneurs set specific goals and then lay out practical day-by-day strategies to secure their first paying customers.
- Get help. Just because you are the boss of your new enterprise doesn't mean you will always have all the right answers. Most startup entrepreneurs are first-time entrepreneurs who come across a lot of problems that they never encountered before in their salaried careers. It's only natural that beginner's mistakes will be made, sometimes costly ones. When you face unexpected problems in product development, product packaging, sales, marketing, customer service, or finance, don't guess the answer. Find someone who has already "been there and done that" and ask for help. Remember, every mistake you make now comes out of your pocket.
Here's one last tip. It's not enough to just get by in business; your managerial objective is to get ahead in business by using your head.
Susan Schreter is a 20-year veteran of the venture finance community, MBA-level educator and policy advocate for small business owners. Her work is dedicated to improving startup operating performance with reduced personal risk to entrepreneurs. She is the founder of www.takecommand.org, which offers the largest centralized database of regional and national small business funding sources in the U.S., including angel clubs, micro-finance lenders, venture capital funds and more. Follow Susan on Twitter @TakeCommand