Dear Aspiring Entrepreneur,
Here is what business school has not told you (for reasons beyond my comprehension)...
What ever amount of money you think you need? Double or triple it. I don't care how much research you did. You. Are. Wrong! As I've found — by living through it — all the typical models for estimating your budding business needs actually take significantly more money and time to come to life. Simply put, you will bleed out your money far faster than you'll ever imagine.
Shop your banks early and often, and never go with a bank because they are who you are presently with. Make sure they fully comprehend your business model, and can give you clear line of sight to being bankable, and getting a line of credit.
>> Please Note >> The banking industry is built to help you fail. If you have dependency on them as a startup, you must rethink your plan. Your money wires will always be late, and your loans and deposits will always have holes or delays.
Payroll weeks suck! Have a close advisory team you can confide in fully, and seek support from.
Your family will not be able to bail you out every time. Make sure you have more resources available to you beyond your most forgiving safety net (should you be lucky enough to have one).
Build with scale in mind. Once you have 5 employees, you will not have time or ability to do everything as you have up until that point. Have a clear strategy for both who and how your operations will run.
No matter how good you think you are at sales, you will never be good enough to float the entire business on sales alone.
Be ready to miss paychecks. It is real, and going to happen. If you are not ready for it, you will fail.
Prep your friends and family that your relationships will suffer. Sadder still? Be ready for some of those relationship to die. In your first year, an average week will be 80-100 hours.
HIRE SLOWLY, but fire QUICKLY. Yes, we all have heard this a million times. But in the beginning, bonds form quick between you and your team. Remember though... your business will not wait for you to figure out when personal preferences take heed over better business practices. While you need to take the time to get the right people, know they may only be right for a period of time. It is the cost of doing business to recognize that you may or will outgrow those who stood with you when you began.
Don't be a whore! Yes money may become tight, and a sale may feel necessary. But don't sell to the wrong customer. In the long run, a bad client can sink your company faster than tight cashflow.
Stay positive under all circumstances. Even in your darkest moments, you must find a way to see the light no one else sees. It is the only way I've personally found to survive.
Finally? Start networking NOW! The old saying 'it takes a village' is no joke. To build a business, it takes a nation. Politicians, vendors, investors, bankers, college professors, et al... you must know everyone, and build close ties to them. Trust me. You will need to call-in help and favors early and often. Invest the time early, while the time still exists to do it.
If you follow this advise, you'll have at least a 10% chance to make it past year one. For some of you, 10% will sound impossible. To others, it will be the challenge you intend to meet. Take that for what you will.
So if you are ready... Good luck, and God speed!
To Your Success & Prosperity!