I’ve been an entrepreneur for the past 30 years and during that time I’ve started eight businesses and am currently working on business number nine. In this blog, I’ll tell you the 10 most important things to do or not to do that I wished I’d known when I started my first business.
The 10 most important points I check off with every business I start are:
- Keep your life and business in balance
- Know your exit before you enter
- Don’t buy things unless you need them
- Put money aside for the unknown
- Don’t use debt to further your business
- Invest in your customers, clients, and partners
- Find your niche without losing the bigger picture
- Choose the right partners and employees
- Be patient – allow decisions to mature
- Be open-minded and keep learning
Most of those businesses have given me some amazing times – while the others made me struggle and fall over more often than I wished for. I learned some important lessons and today I do many things differently to when I started out.
Let’s get into it.
1. Keep your life and business in balance
Starting a business is something you do to enrich your life and to enjoy. It’s not meant to replace your life. I’ve spent so many hours in the office and on the road, neglecting my family, friends and social life, that I lost the reason for starting a business in the first place. Let’s face it, there’s a high chance that your business might not survive.
This is okay if your family and friends are still there with you, but a disaster if you’re left on your own to pick up the pieces. On the other side, if your business becomes a success you have the right people around you to share the success with. Keeping the balance between your life and your business is a win-win situation and having the support of your family and friends significantly increases your chance of succeeding in business. That’s my experience.
2. Know your exit before you enter
This point could easily be Number 1. Before you start a business, join a partnership or launch an initiative, take your time and consider the following question: “How will I get out of this if it fails?”
Having an exit strategy is a very good way to start a business and puts you ahead of most start-ups. Knowing your way out, reduces the risk and keeps you on your toes. The most important thing is that it will force you to identify the point of failure. But be careful! This is not easy.
If you are anything like me – full of passion for the things you do – you probably only see the positive side and don’t want to think about failure. However, don’t make that mistake. Be clear about your life after the business and discuss these points with the important people in your life.
3. Don’t buy things unless you need them
In my experience, this one of the biggest problems in most start-ups and I count myself in for many of my businesses. It’s so easy to get dragged into a buying frenzy when watching YouTube videos about the latest gear that will bring your business to the highest level. There’s a saying: “It’s not what you have that counts, but what you do with what you have that makes the difference!”
Only buy things you can directly relate to revenue. If it doesn’t bring any money in don’t buy it. Trust me, there will be a time when your business runs well when you will buy that car or whatever it is you want. For now, do the best you can with the least you need. Lean and mean!
4. Put money aside for the unknown
Every business will go through ups and downs – and for that, you will need to build some reserves. Over the years I found that keeping 50% of everything I make aside works really well. I know it sounds a lot, but if you don’t make enough money to do that, then make more money and spend less.
Once you’ve saved enough to cover a year of bad times, you can start putting some of your savings into long-term investments. This can be in your own business or in other businesses. Just make sure you invest in an asset. That means the investment creates money and doesn’t cost money. There’s more about this in a separate article, so stay tuned.
5. Don’t use debt to further your business
This is something I learned early on. Using other people’s money to start your business is rarely a good idea. There are some exceptions, but those should be exceptions and not the rule. Avoid the temptation to scurry around for external funding such as start-up loans when you could create a business model that requires little or no finance.
We all know one day this money will have to be paid with interest within a given time-frame. It’s hard enough to start a business without the pressure of a loan on your back.
In my mind, the only good type of debt is what I call the asset debt. This is when the money is used to create money – and only if that created money is higher than the interest of the debt. For most start-ups that is rarely the case. Don’t get a loan to finance your life until your business is going. This could be the worst business decision you ever made.
6. Invest in your customers, clients, and partners
I believe that your relationship skills are the most important and critical business skills you can have. All business revolves around connections with customers, clients, partners, and employees. Building the right relationships with all of them is vital if you want your business to succeed.
I would advise anyone to invest in good people skills. Learn what you can about interactions, motivation, and leadership. This is not something you want to get wrong. Every successful entrepreneur invests in this area and understands the importance of getting this right.
7. Find your niche without losing the bigger picture
The way I managed to create successful businesses was by striving to be the best in my chosen market, rather than average in a larger market. When customers make a buying decision they usually choose the best provider of the needed or wanted services or products. Not some average company.
I truly believe, if we wouldn’t have been the best in what we did at the time then our businesses would not have survived the recessions we’ve been through over the years. But it’s important never to forget the bigger picture.
You need to know where the markets are going and how that might impact your niche. Stay curious and be ready for change while striving to be the best in what you do at any time.
8. Choose the right partners and employees
I could tell you many stories about my business relationships but will go deeper into this in a separate blog. What I learned is to employ people firstly by character and secondly by expertise and knowledge.
Knowledge and expertise is something you can gain and learn, but your character is something formed throughout your life and very hard to change. It’s usually your character that makes the first impression and creates relationships. You need to get this right. If you build a team you all have to work together. Having the wrong person in the team can easily break it all apart.
The same goes for business partners. It doesn’t mean you have to be great friends. It just means you have to complement each other and enjoy working together. Don’t go overboard with high salaries right from the start, but allow your employees to grow their salaries. Always keep in mind what your business can afford at any given time and make sure that employing someone will increase your revenue to pay for the expense. There is a lot I can tell you about this, and I’ll share it with you in one of my following blogs.
9. Be patient – allow the decisions to mature
If you have an important decision to make, give it time to mature. Be patient. There’s a proverb that says, “All things take time.” That’s very true. Many times in my life I had a business and personal decisions to make, some of them quite important. But most of them were not split-second, life or death decisions.
I had plenty of time to reasonably consider what I was going to do. However, I often did not feel that way. I somehow put myself on some kind of false time-clock thinking I had to make a choice quickly. This often led to regretful outcomes that could have been avoided…if I had waited a bit longer for more information and insight. So, what’s the rush? Slow down and let things develop before you make a decision. Give things time.
10. Be open-minded and keep learning
This is more about self-development and the understanding that you will never know it all. Times are changing and force us to change. The only way I found to deal with this change is to welcome it into my life and my businesses.
This has required me to learn new things all the time and to find new ways to put my knowledge, experience, and expertise into practice. A curious mindset certainly helps. And a fresh breeze of positive thinking and excitement for the things to come are the cornerstones of staying ahead.
It’s not just your business that needs to be the best in its market, you need to be the best for the business to make it work. So take some time to work on yourself to be the best entrepreneur your business could wish for.