4 Things I Wish I’d Known as a First-Time Entrepreneur
By Elise Mitchell for Startups.co
TL;DR: What you won’t know your first day as an entrepreneur — as well as all the blunders you will inevitably crash into — turns out to be some of the most invaluable training and can lead you to success.
Entrepreneurship demands more grit than glamour. As any professional on the other side of the uphill challenge knows, success often means making mistakes, bravely picking up the pieces, and trying again. The process is equal parts grueling and exhilarating.
As a strategic communications professional and business leader for more than 20 years, I’ve made plenty of my own mistakes. In the end, some of the biggest snafus provided invaluable training and helped carved my path to success. They’ve truly shaped my journey and helped us become one of the fastest growing PR firm globally.
FROM ONE ENTREPRENEUR TO ANOTHER
Yes, mistakes are a part of any entrepreneur’s journey. But that doesn’t mean you can’t learn from those who have gone before you. Asking for advice is much better than blindly repeating history.
Three areas I’ve found particularly challenging are people, finance, and learning to sell effectively — the three foundational elements of any business. Use what I’ve learned to navigate your own entrepreneurial journey:
1. Put people in the right roles.
Your company needs to be nimble enough to restructure and redeploy talent in new ways to carry you into the future. Employees may resist changes, but that’s not a reason to keep things static. As a leader, your responsibility is to make decisions about people to help propel the company forward.
You may have to move employees into other positions, adjust reporting lines, or change roles and responsibilities altogether. It may make sense for you to take on something new or sacrifice something you love for the progress of the company. Expect some strife over organizational changes, but if you’ve done your homework and know this is the right decision, move forward with confidence to help ensure acceptance and success.
2. Count only the chickens that have hatched.
Staffing follows revenue. That should be your guiding philosophy. Optimism is wonderful, but don’t let it lead you down a financially unviable path. In most cases, you should ignore the voice telling you to hire talent because you’re confident you’ll grow. Wait until you have the business in hand.
More is at stake than the health of your business. If you bring on a new employee in anticipation of growth and the growth doesn’t happen as quickly as you thought, you could be forced to lay that person off. This individual may have left a job or even relocated for you. The last thing you want to do is immediately turn around and fire him or her.
Keep in mind that the true cost of an employee is more than his or her salary. Consider total compensation, which most likely includes insurance, equipment, and more.
3. Hire a niche employee.
Staffing behind the revenue is a winning philosophy 90 percent of the time. That being said, some scenarios justify bringing new talent on board before the revenue has materialized. The most common situation is when you need to hire a specialist to bring a new, necessary expertise to your firm.
When hiring a niche employee, look for someone who has been successful in his or her field and whose presence on your team will foster growth for your startup. Consider it an innovation investment that will reap long-term rewards.
But be sure to calculate ROI. Before extending any offer, determine how long it will take to recoup the money you’ll be investing in the new employee. Weigh whether the funds would be better spent investing in technology, moving into a new office space, or expanding into a new market.
4. Don’t give away your product or service.
When you’re getting started and building out a client base, it’s tempting to offer your product or service for free, hoping you’ll be hired later. I understand how hard it can be to convert prospects to buyers. But doing anything for free undermines your company and devalues your offering. It may even encourage clients to lowball your budget on future projects.
Have confidence in the value of your offering, and don’t be afraid to walk away if potential clients aren’t willing to pay for your work. If you offer demos or a trial period, be firm and end it when you said you would. If your clients are hooked, they’ll be eager to sign on. Forcing them to live without your product or service should prompt that response.
As an entrepreneur, you’re bound to make mistakes. Hopefully the advice I’ve shared will help you avoid some of the major missteps many entrepreneurs make in their startup’s infancy. Whether your business is still just an idea or has reached a stratosphere of success, you can always benefit from learning about the experiences of other leaders. Ask a fellow empire builder to chat or grab coffee — you never know what you’ll learn.
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