I know some of you hear have started your own businesses before. What obstacles did you have? How did you overcome them? What do you wish you knew before you started? What would you do different if you did it again? Where/how did you get your capital?
Because of my profession, I have been involved in hundreds of business startups, and have started a dozen or so myself. Here is what I have learned.
First, Harvard Business School will tell you that the two major causes of business failure are undercapitalization and management error. They are wrong. It is the same problem. Start with a rich daddy and you can last for years screwing up; it happens a lot, look at George W Bush's business career. Conversely, start with a thousand dollars and you literally can afford no mistakes. Truth: businesses fail because they run out of money before they learn how to do it right.
There is a lesson in this conundrum. You are going to make mistakes. If you spend money and time on a mistake and learn nothing you will soon be out of business. Think of it as buying information, especially marketing. Before you spend money think about how you will measure the success of a project, and what level of effort is a fair trial. Advertising media have an answer for why you are disappointed in the results; you did not pay for enough "exposures". If you ever hear this run away!
Businesses have a startup growth curve that depends on your learning curve. Learn all you can, as cheaply as you can, as quickly as you can. Have a learning plan. Go to trade shows, work in the industry, do your own research. Once you know enough to start one, create a business plan. It should have goals. Ask yourself if you have the guts to shut it down early if it isn't working, before bankruptcy. If the answer is no, you will be a captive of the business instead of its owner.
Good business ideas are literally a dime a dozen. There are two types: those that inevitably fail and those that have a decent chance. Get good advice to stay away from the first type. Execution determines whether the rest succeed or fail. I can't pick a sure winner, but I can spot most sure losers.
Success in business generally involves three skill sets: management ability, technical or sales skills, and leadership. Almost no one is adequate at all three. Figure out what you have covered, what you are missing, and how you can get it.
Finally, a business is not a life. Do not invest your self worth in a business venture; you are more than your work. It is not necessary that you succeed. It is necessary that you grow as a result of the experience, whether or not it is a financial success.
People who start small businesses have a different set of values, experiences, and skills from those acquired by employees, no matter how high the employee rises. Talk to these people and find out if you are comfortable with the differences.
Good luck in your endeavor, and I hope the experience is as satisfying as it has been for me.
