What are some of the biggest things you overlooked when starting your business? What did you wish you hadn't neglected (such as anticipated taxes or other expenses)? What activities did you do that you could have outsourced? What skills did you acquire the "hard way" that you would do differently now?
If I was going to start over, with a blank slate I would do several things differently.
1. I would hire an accountant and bookkeeper on day one. I know that on the surface it's easy to look at the cost of an accountant and justify spending those resources in other areas, however I have seen this play out horribly for a number of businesses (ours included.) An ounce of prevention is worth a pound of cure.
2. I would make a list of all of my start up items, edit it and then edit it again. Start as lean as you can. We started our t-shirt company with basic equipment in my mom's attic and slowly moved into proper production space as we needed to, however we made the mistake of buying too much equipment early on because we thought we needed it. Get by with the bare minimum for as long as you can, get traction, customers and cash flow and then expand cautiously.
3. Don't listen to salespeople! Talk to friends, other businesses and look on the web for answers to common questions. Salespeople are great when you know what you need to buy, however often times you are going to end up wasting money that would be better spent in other places, like on your accountant.
4. Don't take on bad customers just to make a buck. If you are interested in knowing our 10 tell tale signs of bad customers, schedule a call with me and I'll run down the list. It will save you hours and it only takes a few minutes.
5. Find a team of advisors and listen to them. I wish I would have listened to advice that people were giving me for free when we first got started. There's an old saying, "if you're the smartest person in the room, you're in trouble." Find good council and listen.
Hope that's helpful, I've been a freelancer and small business owner for almost twenty years and enjoy coaching startups and entrepreneurs in getting their ventures off the ground. Feel free to schedule a call and I can help get you started.
Answered 9 years ago
Ah, as the ancient proverb says, "When the student is ready, the teacher appears."
You ask the insightful questions that most entrepreneurs, myself included, neglect to ask, in advance.
I started a cellular retail store in 1989 with a partner. This was when the first Motorola flip phone hit the market. It cost us $3100 wholesale. Yikes.
We were friends. Unfortunately, even though the business recorded taxable profits in such a short time, we shut it down after about 6 months due to irreconcilable differences between us. We were both too stubborn, me maybe more than him. Lesson: being friends is not enough. 1. Partners need to be completely in sync philosophically. 2. I have had partners since, but will never do 50/50 again. There needs to be a leader/decision maker. If both or all the partners think they are the leaders, you are just heading for a crash. That is not to say that the leader is independent. But, ultimately, someone needs to break the tie and make the decision.
As for outsourcing, when you are bootstrapping you end up doing more tasks than you would otherwise. If you have the funds, outsource everything that keeps you from your core competences. But, never put the destiny of your company entirely in someone else's hands. Keep controls in place and keep close tabs on the money. Don't abdicate growing the business for running the business.
As for learning things the hard way, is there any other way? Seriously though, I have learned to listen to my wife. Had I listened to her "discernment" when I was younger, I would not have made as many poor decisions as I did. As for another lesson, I purchased a full service hair salon many years ago. No, I am not in that profession. It was purely an economic decision. I sold it one year later for more than double my investment. However, I could have done significantly better and had less aggregations had I fired the salon manager. She had convinced me that she could run the place better than the previous owner. Unfortunately, she also rallied all the employees making it difficult for me to turn the ship around. I did it in spite of her. And, the next owner did replace her. Now I understand why top level people are often, not always, replaced in acquisitions. It is a soft skill, but I am more keenly aware of company culture and the influence of leadership now than I was 25 years ago.
Hope that sheds some light. If you woul like to chat further, give me a call using the free call link below.
Answered 9 years ago