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7 Things to consider before starting your own business (can you do it)

June 5, 2019 / Comments Off on 7 Things to consider before starting your own business (can you do it)

consider-before-starting-your-own-business

When I started my first business at the age of 19, I gave no consideration whatsoever to anything other than simply making sales as the business was set up as a result of door-to-door canvassing for a home improvement company to earn money while I was at college.

Looking at the definition, you could slightly excuse me for attending the interview (which didn’t mention what type of canvassing) and thinking that I was headed for a Political career.

Anyway, later on in my career, I would start to take the process far more seriously and over the 35 years since I have started, I have formed my own ‘critical list’ so let’s get to it.

#1 – Mindset

This is the most critical aspect of all and it becomes the driving force for everything.  I coach and mentor people all of the time and within a few minutes of meeting someone and even when speaking to them on the phone, I can get a very good idea of their mindset – their intent, passion, commitment, and their demeanor.

Many of the people I meet are never going to be successful in business simply because they do not have the commitment – they want to have evenings and weekends free, regular holidays and basically live the lifestyle they are living while employed and to enjoy all of the benefits that go with it.  I am not saying that you shouldn’t have time for yourself, but let’s get this thing clear – you are starting a business so that you can have the freedom, independence, and security that you are craving and to enjoy those things, you must make sacrifices.  But it is your mindset that will determine whether you do or not.

Think about this phrase – “do or do not, there is no trying.”

The best advice I can give you here is to go out and find some inspiration look at people you admire, read books, watch YouTube videos and try to look at the common traits that successful people have.

Think about this also – what separates the winners from the rest of the pack and it is only what is between their ears.

In my early life, I suffered tremendously from a lack of self-confidence and it stayed with me until I started practicing Martial Arts.

Martial Arts gave me the discipline, but more importantly, the confidence to believe in myself and that belief has allowed me to get through some very sticky business situation and also, it taught me never to quit.

I have been through more than most in my life and certainly when it comes down to business and I can tell you that all those sayings such as “what doesn’t kill you make you stronger” are true and I will finish this most critical step by explaining that just as life ‘tests’ you for sometimes and for no apparent reason, you will certainly be tested in business, so make sure you are prepared for it.

I would also advise you to do a personal audit and work out your strengths and weaknesses – be brutally honest here and get the opinions of others that you trust.

A chain will always break at the weakest link!

#2 – Your Family

My obsession for business has cost me a few relationships and I must caution anyone who has not seriously discussed the pro’s and cons of what starting a business will really mean to the ‘other half’ and family members.

I can also tell you that my business has led me to cancel dinners, weekends away and even booked and paid for holidays as I put the business first – on one actual holiday, I spent most of the time walking up and down the beach talking to members of my team about my latest idea.  To me, the holiday gave me time to think and that meant ideas and ideas mean change and implementation and it was no wonder when anyone who knew me dreaded the moment I ‘went on holiday.’

Only yesterday, I spoke to a successful businessman who had ‘personal problems’ relating to huge disagreements between himself and his partner that was threatening to end their relationship.

Here are a few ideas on how to approach discussions:

  • Make sure your partner /entire family are behind your decision to start a company
  • Be honest and upfront about the time commitments
  • Make sure they understand that you will get stressed, tense and will sometimes flare up for apparently no reason
  • Now explain the potential benefits and that you are doing this for them as well
  • Basically, just ask for their understanding

Please don’t overlook this part as I have seen many a divorce come out of even a successful business, simply because the partner simply doesn’t care about the money and would rather have their other half just as they are.

Don’t ignore this as there is a lot to be said about being happy and it is true – money cannot buy happiness, at best it will make life easier which brings me nicely to my next point…

#3 – Never, Ever Do It For The Money

“What”? I can hear you say…”He’s gone mad.”

Let me explain this to you – I retired the day that I started my own business.

The simple explanation to the above statement is that the day I started my business, I stopped ‘working.’  I define work as doing something I don’t really want to do – chopping down a tree for example!

I know the tree needs to be taken down and I have been tasked with doing it, but although I can see the benefits, I don’t really want to do it and I will find the fastest, most efficient method in doing so and this is a real-life example and believe me, dynamite crossed my mind!

Starting my own company however was not work at all, I loved it, therefore, could ‘live for it’ and the passion I had to do it was infectious.

In my early business career, I did everything for money believing that you had to portray a certain image to be successful, so my car payment, clothing spend and lifestyle was all on borrowed money and it was totally fake.  Going ‘bust’ was one of the best things that could have happened to me and it taught me that a fake lifestyle, will only lead to a fake outcome…in everything.

Passion drives everything, so make sure that you pick an industry that you are passionate about, otherwise forget it.

The reason is as I have already explained – passion is infectious and it will ensure that you will do the best job for your client and that will lead to the best outcome and then the money will flow.

Making money is simply a by-product of success and that success will be measured by the customer.  If you combine passion, with putting in your heart and soul into your business and more importantly, the success of your customer you will not have to worry about money!

#4 – Can You Sell?

Without a doubt, salesmanship is one of the most important aspects of starting any business and the simple question you should ask yourself is…can you sell?

For many people ‘sales’ is a dirty word but in the world of business, it is a word you should get used to hearing and embrace it fully.

It doesn’t matter whether you are an online or traditional business, having the skills to sell will be critical – if you are online, you will depend on the written word and copywriting will be the key, but copywriting is only the written version of selling.

I see many people coming into the business world who have absolutely no idea as to how to sell themselves, let alone any product or service and I know that they will be the ones who are most likely to fail.  So let’s assume you are not a salesperson by nature and you want to start your own business – maybe you will invent something and form a technology company and have others back and finance you.

In this case, your backers will more than likely take over the selling process for you, by appointing a well professional head of sales.

But what if you don’t have that luxury?

Here is a simple exercise that I suggest everyone who is starting a business should try:

Are you able to walk up to a complete stranger and start a conversation from nothing – and can you continue it?

If you can then you are a salesperson in the making and also don’t worry if you can’t after the first attempt – try again, but if you are paralyzed with fear and unable to do it after several thoughts and attempts, then you are probably not cut out for sales.

Now it is not that you still cannot learn…you can…and I have taught some of the most unlikely people how to sell, it just may not be the right time to start a business.

I will tell you this and don’t let anyone ever tell you any different – selling is easy if you apply logic and sincerity.  It is far too deep a subject to cover here, but trust me that it is.

The advice I give to everyone who professes not to be a salesperson, yet they can talk the hind legs of a donkey, is that all you have to do is engage with people, talk to them and try to put forward a valid proposal for the services or products that you offer.

Rinse and repeat.

Is it as easy as that?…

No of course not, but it is at least, a place to begin the learning.

#5 – Ego

Are you prepared to lose it?

I wasn’t and it cost me dearly.

There are many reasons for business failure and also ones that hamper or severely limit success and ego is right up there at the top and I should know as I had it in abundance!

You simply have to learn ‘how to get out of your own way’ and just as I explain in the point below about ‘selling to yourself’, I will make the same point about ego and as you will see, they are inter-related.

My problem was that I was starting to believe my own PR and it didn’t help that the PR, led to my most successful business years.

The crash however that followed in the early part of 2001,  brought me back down to earth and to reality…but …I will say that if I hadn’t have gone bust before, I probably would not have been able to handle it.

So this point is short and sweet – lose the ego and that also means in the hiring process.

As a recruiter, I am well aware of how the hiring process works, but I am also acutely aware of the psychology of hiring.

Always hire people who are better than yourself and learn to leverage them to make your company even more successful.

I will end this point with a note about sharing your success.

It always angers me when I watch such T.V shows as Dragons Den and Shark Tank, the equivalent in the US and I see people who have a business idea, but no money, or who wish to grow their companies by leveraging the expertise of the panel member(s), who they are trying to secure investment from.

I’ve seen companies with no value who want investment in the ten’s or hundreds of thousands, who then haggle over equity splits!

These people currently have 100% of nothing in the worst case and have the opportunity, for example, to have 20% of something!

Ego can be very destructive…be ‘ego aware.’

#6 – Finance

Most businesses fail due to undercapitalization and therefore it is essential that you have enough money to survive the first year if I was to be totally honest with you.  Many coaches talk about having a six-month period of income set aside, but in reality, you will need more.

Also, you will need to be very conservative in terms of forecasting the success of the business and sales forecasting as it is known, in my experience, is mostly too ambitious.

I started my business with a credit card and remained self-financed throughout my career.  Was this the best option…probably not if I wanted to scale my business faster, but I wanted control over money.  I didn’t want to be obligated to investors who could pull out in a heartbeat.  Some of the common types of funding are:

Some more uncommon forms of finance are:

There are other forms of trade finance that can be useful such as factoring and literally everything should be looked at and considered.

But whatever you do, resist the urge to take on any secured finance as trust me, I have been there and lost the houses in the process!

Finance is, of course, a critical part of starting your own business and you must consider all options, risk only what you can afford to lose and if you really want to take a chance and go down the secured finance route, then you must understand the potential consequences.

#6- Research

I worked with a guy early in my business career who could literally ‘bleed’ enthusiasm – he would get so excited that it would become infectious and he definitely possessed the right mindset to succeed and that is why I am sure he will always succeed despite having some monumental business failures to date.

His crime was that he simply didn’t research his ideas fully enough and ‘sold each and every deal to himself.’  In other words, he believed in it, so it was bound to be a success!

Wrong.

I learn greatly from others and it may take me some time, but I am willing to learn and he taught me a lot – both good and bad, so I made sure that when I started my own company in the technology staffing sector, I would do it properly.

Here’s how I did it:

I was starting in a recession and in a market that I had no real idea about, so the first thing to do was to find people who understood it completely and this proved a challenge as I didn’t have any money to invest, other than into the company that I was bootstrapping anyway.

Luckily I got some help and the first place I looked at was the investment marketplace.  Now I wanted to find out the size of the market, who the key players were, how the market got to where it was and where it was going in the future…but…most importantly, I wanted to find out where the money was going.

Now I was a lonely start-up operating from my living room in my apartment in London and I was about to try to do business with some of the worlds leading technology companies and also go against some of the major players in the staffing world for good measure.

I couldn’t wait!

I set about personally contacting the marketing departments of these companies and asking them to explain to a potential investor (I had no money, but why let that get in the way…) why they should invest in their company, what separates them from their competition and what was their vision for the future.

It worked a treat and it also shaped my overall plan as now I wanted to be more disruptive in my approach to how the industry operated.

By taking an investment approach to forming the basis of my business plan, I learned how to analyze and think about the future – I will repeat myself with this statement as I think I mention it in almost every post – think like a hedge fund manager.

I cannot over-emphasize the importance of this phase as it not only defines whether your business idea will work, but it forms the basis for the business planning phase.

So there you have it – some considerations that you may not have thought of, but to me, are critical.

To your start-up success!

-Neil

Last modified: June 5, 2019