Happy Tuesday. I had an awesome weekend. Brendan and David had 3 friends over Friday night for video games and movies. We watched Monty Python’s “The Holy Grail” and it was so much fun watching 5 tweener’s laughing at comedy written when I was a child. Naturally, the boys were awake until about 4am when they started passing out from sheer exhaustion. But mornings around here start early on Saturday and we had them up and “zombie-like” by 9am where we went to Esther Short Park to play some Football. It is great fun to play some touch football with half-asleep 11 year olds!
One of the most enjoyable moments I have is when I get to meet with someone who wants to start a business. They have an idea, or are tired of making someone else a profit or just want “freedom”. I look at it as my solemn duty to help the budding entrepreneur understand the risks and benefits of starting a small business and am proud of my track record.
Part of the process is understanding the truth about starting a business. First, “The Idea”. This might sound cynical but there is some truth to what I am about to say… There really is no such thing as an original idea in business. Think about this, chances are your business idea already exists in some fashion somewhere. What you have is a belief that you can do it better, faster, cheaper, with different colors, in a different part of town, etc. than anyone else who has tried this before. And, if by chance, you can’t find a direct competitor, ask yourself why an established business hasn’t tried it before? The odds are someone has tried it and it didn’t work out; and there is a lesson there as well.
Next, “Keeping the Profits”. If you have read my other blogs about revenues and expenses and the balance sheet, you have a good idea that there is a lot to consider to get to a profit. Remember, first you must have the equity to invest upfront to create your business and then you must reinvest your “profits” back into growing your business. A healthy business is a growing business. You will likely never know when you have excess “profit” to distribute out of the business – until it is time to sell. And selling the business, that is, your exit strategy, is when you really are going to keep your profits. if you have set your business up right.
Finally, “Freedom”. No one in the world works harder than an entrepreneur. 80-100 hour weeks are common, divorce is high, heart attacks, strokes, and general burnout are the norm. Most small business owners have no freedom, they have a job they cannot quit and cannot pay anyone to do.
Now, keeping these things in mind, can you set up your new business to address these issues and actually reach these goals? Absolutely! It requires you to think hard about the more important parts of the business that are typically not considered until you are overwhelmed. I created a Pro and Con worksheet I am happy to share with you if you would like to have a yardstick to measure starting a new business against. Send me an email and I will forward it to you.
To succeed, realize your idea has likely been thought about before and is likely even in operation somewhere. It may not be exactly the same, but something is close to it. Try hard to find it, think about what works and what doesn’t. What strengths do you bring to the table to deal with those things which may not work right? Where is your plan for automation and scalability?
To succeed, realize that you need to design your business to ultimately be bought by someone else so you can receive the real compensation you have worked so hard for. Pay yourself well for the work you do, but don’t try to do everything. Hire the right people, train the right people and help them succeed. You can command a good price for a business with a solid and dependable system – you will get next to nothing for a business that relies solely on you and your skills and knowledge. If you don’t think so, ask a lawyer how much her practice is worth when she goes to retire. then ask Mark Zuckerberg.
Finally, to really succeed, you must focus on your processes so your business can take “you” out of the system. Yes, you will have to work hard and be chef, cook and bottle washer for a while, but you need to develop a system and an organization that you start hiring for. Think about what positions your business needs to succeed, design those positions and start to fill them. Your small business then does what it needs and you can focus your energies on more important things – like living.
None of this is easy but it can be rewarding if you look at it through the lenses of these three areas. If you have questions, I strongly encourage you to speak with your current accountant and ask her to help you with thinking about how to succeed in starting a business. If you do not have an outside accountant or would like a fresh set of eyes, contact us at Currie & McLain to schedule your free no obligation consultation.
Have a great day.