After working in the glossy world of corporate life, a business professional who goes it alone might at first find the change a shock.
Here are a few of the things nobody thinks to mention until you’ve already set up shop.
1. Being an entrepreneur is lonely.
Because the company is a startup, there’s no HR division, accounts department or administration team. So it’s just you, the company founder, overseeing all these administrative tasks.
And when you’re out on the road meeting potential clients, nothing gets done because you’re not there to do it.
With several key departments missing from your workforce, outsource some of these tasks. These contractors will need to be fully briefed to work to your specifications. That saps time but, without the manpower to get things accomplished in-house, you have no choice.
If you need someone to brainstorm with, find a business partner or hire your first team member.
2. Talent doesn’t queue up.
As passionate as you may be about your enterprise, the person you might try to hire may not be. Top people rarely want to join a company they don’t know for less pay, fewer benefits – and less certainty.
You need to market yourself and your brand. Share your vision and woo potential employees so that they will see the positives of a startup: more responsibility, the opportunity to learn new skills and possibly an equity share.
Once you have an employee on board, keep that person.
It’s crucial for the team to bond, otherwise discontented employees will quit.
3. Even in a buoyant market, investors are hard to find.
You might think you’ll be tripping over angel investors or venture capitalists who want to buy into your business. But finding the right investor for your needs may be tricky.
Before you start raising capital, ask yourself some hard questions: What’s the true value of my business? What share should I give away? What terms will be fair?
Consider what else you need from an investor. Some come with a wealth of experience that a startup founder can tap into and can offer a mentoring relationship as well as cash.
4. Convincing customers to buy your product is hard.
Marketing a new venture is no walk in the park. You want clients to buy into your business. But they don’t know your brand, so you have to work extra hard.
You’ll find yourself talking to the guy at the bottom of the chain of command at soome organizations and it can be like walking through a minefield trying to figure out which discount to offer to get your foot in the door.
Gaining recognition for your brand requires persistence. You also need patience: Deals take much longer to close than you might initially realize. Resilience is necessary for bouncing back if you lose a client.
But that’s just a small setback. So get up and get back out there selling.
5. Cash is king.
A healthy cash flow is key for a startup and success at securing financing from a bank is far from guaranteed. This means getting paid is crucial but customers don’t always respond to bills on time.
It may be tempting to threaten to cut relations with a nonpaying customer, but is it the right move? Will this burn a relationship that you took so much time to build?
Set automated reminders to help you remember to gently chase after payments owed. Sometimes customers just have so many other bills that yours – from a small player – ended up at the bottom of the pile.
6. There’s a big personal toll.
While entrepreneurs go it alone because they’re passionate about their business, they must consider the costs to their personal life.
There’s no such thing as a 9-to-5 schedule for the company founder and no holiday when he or she can take a complete break from work. Unless you have a business partner to share the workload, you cannot just hand over the reins and head out the door.
And when it comes to maternity leave, forget it. When my second child was born this past summer, I took one week off. This is where having a co-founder or # 2 becomes so valuable.