Being a Serial Entrepreneur experienced in many industries, there is one common theme I see when people start building their own new business: They Hesitate to Take Action.
Why Some Hesitate to Take Action
These are some “Excuses” I Hear (and some I’ve said myself):
- I need to wait for my paperwork to be filed (company to be formed)
- I need a partner to complement my weak areas
- I don’t know enough about (whatever)
- I don’t know what I don’t know
- I don’t have the money
- What if it doesn’t work?
- My spouse/parents/friends think it’s a silly idea
- I may embarrass myself
Where these are all worthy of discussion, any one of these issues can stop you from taking that first step to your new life.
Are YOU “Waiting” for Something?
The feeling that everything needs to be in perfect order prior to starting your new business is understandable. It’s how we were raised, how we were taught when we went to school and is what was expected of us every day in our upbringing. It’s also expected of us at work.
You don’t submit your report for a grade unless it is complete – or you’ll get an “F”. You certainly don’t create a project at work that is incomplete or you’ll get fired. We are conditioned to having all of our “ducks in a row” before we start anything, or we are sure to fail.
What is YOUR Fastest Path to Cash?
This is the toughest adjustment in your thinking when you become an entrepreneur. Your goal in your new business is to generate cash quickly. It’s hard to not let distractions get in your way, especially when you let questions like those listed above enter your mind.
I watched an associate startup her business as a bookkeeper for Mom & Pop restaurants. She was a former CFO for a corporation and had it with the corporate politics. She has the expertise, she knows how to service restaurant’s books but there were several issues that slowed her down on her “path to cash”.
- She felt she needed a business partner.
- She felt she needed to research, examine, and choose the technical platform that was ideal to support her business.
- She postponed any marketing efforts until the paperwork was in order.
Validate Your Offering is Needed in the Marketplace
This step is often overlooked but so critical. In my friend’s case, her services were clearly needed. There is a pain in this market because restaurant owners, as entrepreneurs, generally don’t tend to details such as bookkeeping. Further proof showed up in freelancing sites requesting these kinds of services. Her “fastest path to cash” would be to respond to these freelancing requests, thus making money while validating the need for her services while learning the business aspect on a smaller scale.
There was another lady I know that developed an acne medication for pre-teens. I cringed as I heard her get advice from another lady to setup her whole Infusionsoft marketing/CRM system prior to launching her business. My thoughts at that time was, “don’t you want to make sure someone will want to buy it first?”.
Business Partner Myth
I am guilty of this myself. Where everyone has a “blind spot” about themselves, we also tend to be our own worst critics. Our shortcomings are magnified when we identify them in ourselves. Our nature is to look for others that can make up for what we feel we lack in ourselves.
The danger in getting a business partner for YOUR business is that you’re giving away half of your business. You feel you don’t have the talents to build a business and perceive the potential partner does have it. The reality is you have no idea of your future business partner’s shortcomings. You are giving away half of your future earnings, half of the value of the company you built based on YOUR talents, and trust me, you will come to realize you really didn’t need that business partner after all.
There are many alternatives to getting a business partner. Finding an experienced mentor is one. That mentor can be paid with a partial ownership interest if you lack the cash for the business expertise, but you don’t have to give away half your company to get the support you need.
Another alternative is offering incentives to those in the industry you want to serve. Network at industry events, tell everyone about the solutions you want to provide and collaborate with many. You’ll get some great feedback on the validity of your business idea, and have a list of potential clients right there when you’re ready to open that door. These people will be your beta-customers and will provide you with the word-of-mouth testimonials that will propel your business.
Web-Sites, Business Cards, and Technology Distractions
There is somebody out there that needs a problem solved, and you can solve it. Someday you may want a web-site, nice business cards, great headshot photo, and a working operational technology platform. But these are distractions that impede your “fastest path to cash”.
What we forget when we embark on a business idea, the most important thing to do is to find your FIRST customer.
Once you have that customer, you’ve validated your business idea, start making a little cash and you will gain the confidence you need to take your business to the next steps. Without that first customer, you’re wasting your time and your money on things that don’t really matter.
The Business Formation Myth
We are so fortunate in the USA to be able to choose multiple forms of business structures. Each option has their own benefits and liabilities, and we can change these structures as we evolve.
One of the biggest mistakes I made as I began my real estate investing career was allowing myself to be sold on business formations that I really didn’t need. I thought I needed them because the people at the seminar told me I needed them. They used fear based sales tactics to send me to a corporate organization that profited close to 5 figures to make sure I was protected in a real estate investing business.
The reality is I never did a real estate deal. I embarked on a new venture where the validation was clear, but there was no proof that I could scale that business to require such sophisticated corporate strategy. I could easily have done my first deal as a Sole Proprietor with little risk to my personal assets. I know so many people that did one real estate deal and then decided they didn’t like that business. What a shame if they had invested close to 5 figures for sophisticated corporate structuring and then decided this business wasn’t for them. (Note previous blog post: Let’s Talk Asset Protection)
You will want to create these sophisticated corporate strategies as your business grows, and those strategies should be evaluated periodically.
Challenges vs Obstacles and Workarounds
When you find yourself dealing with the questions above, identify whether it is a “challenge” or if it’s an “obstacle”. Understanding the differences will provide you the insight so you can take appropriate action.
A Challenge is, “I can’t do business until my entity papers are filed”. That is a challenge that isn’t quite true. It is true you can’t do business in an entity that isn’t yet formed, however you can do business as a sole proprietor while waiting for the finalization of the papers as a work-around to that challenge.
An Obstacle is, “I can’t perform as a real estate agent until I get my license”, or “I can’t sell my CBD oil in Texas because it is illegal to do so.” Breaking the law is an obstacle, and the workaround is illegal.
Sometimes challenges are viewed as obstacles, when they aren’t. A challenge means there is another way to get what you want accomplished, you need put some time and effort discovering how to overcome that challenge, as it’s interfering with your fastest path to cash.
A Workaround is, “I can’t sell my health supplement that cures arthritis because it’s not approved by the FDA”. Where it is true, that even with as much proof that has convinced you that your product will cure arthritis, it is against the law to make that claim without vigorous FDA testing and approval. However, a workaround is to provide a legal disclaimer and verbiage on your label to inform the consumer that this product has not been approved by the FDA and refrain from making these health claims in your advertising. The way you word the marketing of your product can be considered a workaround to overcoming that obstacle.
The Next Best Step
Where it’s true that we are conditioned to making sure everything is perfect before we put ourselves out there, it’s not necessary as an entrepreneur. Sometimes, all you need to do is to take action.
Think about your business idea with this question in mind: What is YOUR fastest path to cash?