DRIVE STARTUPS We Present Latest Startup News, Tips & Inspiration
My transition from employee to business owner has turned out very well, but the path wasn’t always so clear. While working toward my law degree, I clocked time as a legal intern. I quickly discerned I wasn’t quite cut out for the 9-to-5 lifestyle. It meant getting up early, rushing my prayers and rituals, and making a 9 a.m. court start every day. To put it mildly, it was a horror.
I began my first foray into entrepreneurship during this period. It led to an epic failure and a whole lot of debt. I got out of my depression after reading the story of Urbanladder, a furniture company started by Ashish Goel and Rajiv Srivatsa. The two had found themselves in a situation similar to mine and were dissatisfied with their jobs — one at McKinsey & Company and the other at Yahoo.
It was only much later that I was able to define the actions that would make my leap of faith a success. I share them here in the hopes they can help others who are looking for more meaning in their career.
Never jump without an anchor.
You don’t become an entrepreneur simply because you have an idea. That’s just the first stage. You must prepare for entrepreneurship by researching your next moves.
The first anchor is information. While you’re nursing your idea, invest in gathering information, conducting feasibility studies and identifying resources that can help you articulate your plan. I made my first attempt based on my own assumptions. I’d stayed up late many nights, punching my calculator and making projections. I was confident it would work. But reality has a way of unraveling those dreams and showing them to be the figments they really are. I landed with a thud at the bottom of the barrel called “debt.” Later, I found online resources such as OGScapital, Bbplans and Business Plan Pro. These relatively inexpensive resources enabled me to build a business plan that’s tailored for me.
Related: Is This the Year That You Start Your Own Business?
Your second anchor is your day job. You might need to hold on to this anchor for a while longer than you want. Don’t let go until you see some proof of success.
Your third anchor is your savings. New businesses never turn out the way they look on paper. They usually require more funding than you anticipate. Regardless of whether you’re able to secure outside funding, your own savings can serve as a cushion for you and your business.
Avoid heavy-interest loans.
No matter how badly you need money for your startup, avoid loans that will shackle you for the next 10 years. Some loans exert such steep interest rates that any first profits will be useless — and may remain so for many years.
I learned this lesson the hard way. My first attempt at entrepreneurship started with a $125 loan at a 10 percent monthly interest rate (quite apart from the principal sum). It took me two years to pay off that debt. The saddest part? Even though the business didn’t work out, it still was my responsibility to repay the loan in full. I took a wiser approach the second time around. In fact, 80 percent came from my savings and income. Another large chunk came from partners who believed in my business vision.
Don’t get so desperate to break out and do your thing that you skip doing your financial homework. Locate great funding ventures, and take loans only at reasonable rates. Apply for government-backed startup grants or appeal to family and friends in a position to help. Whatever you do, don’t tie yourself down for the foreseeable future — even if you’re dead sure your business will be a gold mine.
Related: You Can Embrace Failure but Don’t Expect a Hug From the Business World When You Do
Start in familiar territory.
This isn’t a general rule, but it sure helped me. I’d gone off on a tangent for my first attempt and started a cloth-printing and sales business. I made my second start because my law degree opened up an opportunity in property management. I soon found that door stayed open for the same reason. At first, I was drafting a few documents and agreements here and there. Soon, though, I was thinking about a full-grown property-management business.
My background in law and qualifications made people trust me and take a chance. Those new to a business often have the initial problem of convincing customers, partners and even top talent to trust them. Making a jump between vaguely related or unrelated industries may have side effects.
Check up on the law so you stay clear of litigation.
Carefully worded contracts provide protections for both parties. A fair number of legal firms represent clients who manage property, and this can present a tricky scenario. Quite a few former employees have fallen prey to litigation brought by previous employers. When I launched my property-management venture, I nearly was indicted for stealing my employer’s clients!
More often than not, employment contracts contain clauses that prohibit workers from setting up direct competition within certain jurisdictions. Knowledge of these issues can help you properly plan your entrepreneurial journey and avoid backlash. No new business can thrive while it’s fighting litigation for breach of contract or under the faithless servant doctrine.
Be content with starting small.
The vision always is big in your mind, but baby steps never killed anyone. It’s safer to start a business as a side gig with minimal financial investments. This allows you to test the waters.
Here’s one example: Instead of paying for a custom website, take advantage of various free website builders. If you’re like me, you might not have ready access to all the capital you need. Use your home address and employ your family in unspecialized roles. Baby steps help stabilize the boat.
Related: 3 Ways to Grow Your Business With Free Social-Media Analytics
Decide what works best for you and yields the greatest benefit. A friend of mine started an online business last October that makes and receives all payments in bitcoin. While the uncertainties surrounding bitcoin as a currency prevent me from advising you to do the same, I safely can say he had the right attitude.
Find a mentor.
My mentor was younger than me and perhaps less experienced in life. But when it came to the business world, he had much to teach. I learned early on that good listeners have a better chance of doing well in their careers. Strangely enough, my employer — a successful property lawyer — also grew into a great business mentor.
Related: 3 Ways to Attract a Millionaire Mentor
Seek to listen and learn, but keep the spark — the uniqueness that made you pursue the idea. Don’t let people change your vision so much that you start missing your old 9-to-5, and you’ll have what it takes to enjoy a successful transition into entrepreneurship.
Source link
