Key considerations for your entrepreneurial journey
Lessons from the start up:
- If you are committed legally to your former employer in the form of a one or two year non-compete agreement, you will have to wait that out before you can get started. If you have a nonsolicit you can get started but cannot approach your past clients. Have your attorney look at what you signed BEFORE you act.
- Commit to a legal structure that works for you long-term. This will take homework and reaching out to colleagues in similar fields and establishing a long view plan.
- Make a solemn commitment to keeping careful books, no matter what the cost. One of my proudest days as an entrepreneur was the day we were audited by the IRS. They were impressed, and we taught them a lot about how consumer research companies work. Believe it or not, instead of getting mugged we got hugged as they left. It was easy to be calm through that process because we had nothing to hide and everything was laid out very clearly and transparently.
- It actually is a very good idea to develop a strategy and supporting business plan as it forces you to think. This doesnt mean you have to stick to it slavishly you dont because plans should be dynamic and adaptation to the world and your business change. It is also a very good idea to update your strategic plan on a regular basis, say, every three years while examining your business plan annually.
- Dont expect miracles from a bank. If you need financing, talk to banks while also seeking venture capital or angel investors, but theyre in it for the return on their money, so even with the moniker of angel dont expect them to behave angelically. Talk to people about this process, what you can expect in terms, conditions and amounts and what they will want in the way of returns.
- Keep up with your taxes, including all local, state and federal payments and especially all payroll taxes. If you slip behind, you might as well call it a day as that will become a steeper and steeper hill to climb. File your taxes on time (we sometimes took extensions, but only one at a time).
- Be a good corporate citizen join boards, help out your local charities, clinics and clubs. Plan on charitable giving both in cash and in your time (your professional services which are not tax deductible but perhaps even more valuable than just small donations). Get involved in groups you can sincerely support political, religious, athletic, artistic, professional, whatever. Aside from the personal satisfaction, all of this will somehow rebound to your benefit. Call it good karma-in-waiting.
- Be conservative with your up-front expenses on space, furniture, equipment and even people. Lease rather than buy equipment if you can. Dont bite off more than you can chew, or you may choke on it. Plan on growing slowly, and this can mean signing shorter term leases on smaller spaces, hiring people part-time to start, buying used furniture, buying cheap computers and small phone systems. Its good to look solid and big, but not to the extent of undermining the very foundations of your enterprise.
Next Chapter: Be Careful What You Wish For Managing Growth