I’ve owned a few businesses in my day. Some have failed, some have been (and are) successful.
The failing part sucks – no doubt about it. You never enter a business thinking it’s going to not be there in a year or two – kind of like a marriage. But it happens.
Here’s what I’ve learned from my own failed ventures and from the myriad of business owners I’ve worked with over the years.
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- Business Partners. When they work it’s beautiful. When they don’t, it can be an ugly divorce in the making. Just like a marriage, you need a partner who has the same core values, the same vision, yet you need to complement each other. There must be trust, transparency, and all partners need to be on the same page when it comes to running the business. Have a partnership agreement that details who is doing what and how everyone is getting compensated. Trust me on this one. Many businesses fail because the partnerships fail.
- Capital. You need money to survive. Cash is still King. If you are thinking of going out on your own, you need to have cash in the bank for at least a year and/or some VC money to infuse into the business. Without capital, it’s hard to grow.
- 3 P’s. Policies, Process & Procedures. You can’t wing it. Have a process. Adjust as needed.
- Cabinet. Lawyer, Accountant, Tax Advisor & Insurance Broker. Don’t ever skimp on these – Ever. Don’t think DIY is a smart idea – it never is.
- Clear WHY. You have to be crystal clear on your vision – your WHY. What are you bringing to the market? Why should someone buy from you? What is your unique value prop?
- It has to be a viable business. Not all great ideas are viable businesses. Do the market research and test.
- The need for perfection. Go to market. It will never be perfect. Do 1-6 – that’s just smart business, but go to market even if things aren’t perfect. Your website doesn’t have to be the grand vision you have – it can be 1 page. You don’t need a staff of 100 – start with 1, etc.
- Hire the RIGHT people. They need to fit into your culture and see your vision. Resumes and skills are second to their core values.
- You need to change with the market. Innovate or die.
- Ethical. Now you’ll say there are a ton of unethical business owners who are making millions. True, but they won’t survive the long haul. Besides, do you really want to be that person? Do the right thing. Karma is real.
My first business failed miserably and cost me dearly. The reason was #1, #4, and #10 (on my partners’ end). It was a mess. If you are thinking about heading out on your own. Call me first – I can save you a ton of headaches!
Cheers to us Entrepreneurs!