You’ve read all the stories about successful entrepreneurs and drooled. Now, you wheel your chair around your cubicle chair and not to think about the Friday commute.
You say to yourself: “I can do this. I can start my own business.”
Work from anywhere, have more time for family, and never worry about a paycheck again. (Screw the boss who undervalued your work anyway.)
Sound tempting? Of course. When you are your own boss, you make the rules, you decide, and life will be wonderful.
Or it won’t.
Readers with startup experience know this glamorized description is no where close to reality.
The truth is, most start-ups fail.
Startups are messy, and not in a good “let’s-all-pitch-in-and-make-this-work” kind of way.
Fewer than 50% make it, so It’s tempting to find partners to share the load, but If that is your plan, think hard. Money and business have a way of bringing out our worst traits. You will need an anointed leader, good communication and Teflon egos all around.
To fail, rely on someone else. Don’t cowboy up.
Then blame the other guy, blame the economy, Donald Trump, global warming (just don’t turn the lens on yourself).
Still seeking glamor?
The media glamorizes the startup lifestyle and makes celebrities out of founders. If too much INC and Money magazine has you planning your cubicle escape, stop and check yourself against the 6 signs below. If you have even one, keep your day job and put your entrepreneurial dreams temporarily on hold.
Six Signs You Never Thought of For Why You Should NOT Quit Your Day Job:
1. You are not a natural penny-pincher.
Successful entrepreneurs can be the most risk adverse spenders on the planet, and with good reason. Sales cycles are long & unpredictable particularly in the B2B sector. You might spend months in the desert waiting for deals to get signed, avoid sexy growth strategies until you have an income stream to pay for it.
24% of startups fail because they run out of money.
Don’t be Beepi.com (that had a burn rate of $7 million /month at its peak), or
Webvan.com (folded after raising $375 million, with no return to investors).
Force yourself to bootstrap until you have a predictable income stream. Yes this is boring because it often means hitting the phones yourself, but it will save you in the long run when you have money to pay the bills.
2. You Still Have your Original Box of Business Cards.
Finding that first 20–50 customers means reaching out to folks in your network who trust you, and talking them in to transferring that trust to your business. Businesses with a fat rolodex have the advantage.
If you don’t have that reliable rolodex yet, move your networking into high gear before you quit to start your business, and do it with a purpose. Being well connected is one thing, but now you know you need to go a step further, you need to be sure your contacts remember and trust you.
3. In your world, failure is not and option.
- I want my doctor to be trained to avoid mistakes,
- A pilot who follows all 200 steps of the pre-flight checklist,
- A surgeon who performs the same procedure every day exactly the same from the scalpel to the lucky socks.
People trained to avoid mistakes can struggle when there are daily, urgen decisions for which they have background or experience, which is often the case with new entrepreneurs. Eventually these people develop an internal compass for taking risks, but it takes time.
On the positive side, people in these professions are practiced at buckling down and getting the work done. If they persist, they usually come out on top.
4. You don’t look in the mirror and think “Damn Fine VP of Sales”.
Harvey Mackay of Mackay Mitchell Envelope Co is often asked
“How many salespeople do you have?” for which he answers: “500”.
To Mackay, “Everyone is in sales. It’s the only way we stay in business.”
He is so right. Early in your business, sales isn’t just important, it’s everything. Whether you are the CTO, CFO, CIO or CEO, everyone has a responsibility to get the business off the ground.
Limiting sales to a few people specifically hired the job will keep you in the startup desert for much longer than planned, and nobody wants that. Nobody.
Mobilize your team to talk to prospects and ask for referrals. Talk to anyone who can move you closer to the decision makers in your prospect companies, and sometimes this means talking to anyone who will talk to you. It’s normal.
5. You want to stay in your industry.
Serial entrepreneurs will tell you that the hard part is not product development, but learning the niche where your business can fill a gap, where you can distinguish yourself and where you will ultimately establish a strong business position.
Rarely do you know this until you get out there and test your ideas with live, paying customers. So don’t be too attached to a particular segment now.
There are scores of examples of companies that missed it the first time. Twitter pivoted away from the podcasting space after Apple introduced of iTunes. Andrew Mason started Groupon as a side project and found that it quickly eclipsed his initial idea.
Our business, AVG Sourcing, began as a China sourcing firm exclusively for technical products. We quickly learned that retailers and OEMs across many industries love our services, and so we broadened.
It’s OK to have a specific niche in mind, but force yourself to think broadly, at least at first. Once you have built up some market & customer knowledge, then go back and decide how you will focus.
6. You are not comfortable making GUT decisions.
According to Business World, operational leaders make decisions based on information and experience, but strategic leaders use their gut.
Not all great leaders were naturals at this. Warren Buffet and Richard Branson were known to agonize over every decision, and each had to learn gut instinct decision-making early in their careers.
Leaders don’t take steps to control risk. Often, they draw on an informal network made up of competitors, other business leaders, users and influencers, giving them a broad understanding of the issue.
To Get Better:
This informal network can take years to cultivate. If you do not have one, strengthen your contacts before you quit your job. Cultivate a network by sharing useful information and offering to be a resource for them in your specialty. (Personally, I mine my digital subscriptions, The Wall Street Journal and Bloomberg for useful articles, and send these when I know someone who can benefit).
There are a myriad of things you can do to develop your network that don’t require lunch or afterwork beer and chips (though that works too).
Four Signs you may never have thought of for why you SHOULD leave your day job:
- Do you thrive on uncertainty and get energized under pressure?
- Can you listen to people’s problems and turn that empathy into a product or service they will pay for?
- Do you persist through rejection after rejection because you know your product or service has to get out into the world?
If this is you and you have a longing to bring your product or service to market, stay with the feeling because we need you.
Some economists believe that virtually all of the net job growth in the U.S. is due to entrepreneurship and small business startups.
But before you schedule that exit interview, check yourself against these four signs:
1. You FIGURE STUFF OUT instead of waiting to be helped.
At some point, your order page will go down, the phone system won’t work, the network fails and your CRM begins deleting files beginning with a prime number.
Oh Shit. Someone needs to fix it.
If you can figure stuff out, you will move ahead faster and can push through many problems.
Consider your sales and marketing as a small subset of this world: Many growth initiatives are digital, so someone needs to be overjoyed at A-B testing, devising analytics and penetrating social media hangouts that haven’t even been invented yet. Not to mention stuff like joining the chat room at Heavy Truck World created in 1987 that still only allows users who have an original AOL email address.
2. You see “VP OF SALES” when you look in the mirror.
You may have two master’s degrees, a PHD in quantum physics and a wall full of patents, but until your business has built a sustainable base of customers, everyone is a salesman (see # 4 above).
You must be able to look in the mirror and think: “Damn fine looking VP of Sales” , and mean it. Really mean it. Unless one of your trusted partners can lead the sales charge, it’s gonna be you.
3. You are not a genius.
This comment by Larry Summers, has been widely shared at dinner tables across the country because it contains so much truth:
“The A, B and C alums at Harvard in fact could be broadly characterized thus..” [Summers] said:
“The A students became academics, B students spent their time trying to get their children into the university as legacies, and
the C students — the ones who had made the money — sat on the fund-raising committee.”
Summers is saying that the entrepreneurs who earned riches beyond their wildest dreams were the C students.
4. Somebody paid for your product or service.
Paying customers matter, and other people don’t. Not focus groups, not your friends and not your relatives. So, offer something for sale as early as possible then talk to customers and improve it.
This is the Lean Start Up model outlined by Eric Reis in his 2011 book by the same name. The concept that has become a movement for reducing startup risk and lead time.
Fail early, fail often. Per Reis, failure, iteration and customer feedback are crucial to the establishment of your ultimate product or service.
If you have a few paid customers now, consider this a nice head start.
Why it’s Ultimately Worth it:
Entrepreneurship pushes boundaries and forces you to broaden your worldview. Your ego will learn to take a back seat, and this arguably makes you a better person.
One day you find yourself at a party or networking event and hear people whispering about you, saying that you are the guy or gal to meet. You are the person to connect with.
They describe you using words like decisive, a leader, an influencer — even charismatic.
Entrepreneurship will change you in ways you never anticipated and you may not want to return to your old self.
The risks are high and the task is difficult, but so is any accomplishment worth the effort.
And we need you to make the economy grow. We need you to keep growing, changing and improving until you make it.
We need you to succeed.
When you need a supplier for your next Big Idea, contact AVG Sourcing. We specialize in product launch, cost control and sourcing of standard & custom products from China and Asia.
Finally, someone on your side… an on-the-ground team that knows the supplier landscape and understands your business’s complex products. For a no-obligation quote or just a chat, email me at firstname.lastname@example.org or visit www.avgsourcing.com and check out our free resources.