The Age of the Entrepreneur
Welcome to the age of the entrepreneur, where it’s no longer uncommon to hear of people leaving their jobs to start companies of their own. What used to be considered bold and daring is now ordinary to most — unless you’re really making it. Lots of want-repreneurs start companies without bargaining for what creates staying power. They try to forge a path without a plan, and they end up being taken by surprise along the way.
Of course, there will always be unexpected pitfalls and hiccups, that’s all part of the journey — mishaps don’t mean your business won’t survive (or even thrive). In fact, if you’re cut from entrepreneurial cloth, overcoming obstacles will most likely make you stronger. So today we’re not going to talk about the cliche mantras like “the customer is always right,” and we certainly don’t have enough time to address the importance of access to capital and other commonly faced startup challenges. Here are just ten (of many) things that most aspiring and fledgling entrepreneurs learn the hard way.
1.) There's No Such Thing as "Too Legit"
Sure, it’s easy to create a Facebook brand page or business profile, slap a logo on it, and call yourself a business. So many aspiring entrepreneurs create trendy branding, a homemade website, a menu of services, and actually advise or sell to people without being at all legitimate. Yes, a home-based business or even a very small one-person operation can certainly be simple and kept relatively small if real growth is not the intention, but that doesn’t mean it shouldn’t be registered legally with the state.
Whether it’s a lack of knowledge and the appropriate steps to follow or just a desire to remain “under the radar” (and under the table), independent business owners aren’t doing themselves any favors by neglecting to file for a business registration certificate, tax identification number, and/or a sales and use tax license. It’s easy to find each state’s requirements and processes online, and depending which type of business you choose (sole proprietorship or LLC), the fees can be nominal. Legally filing also protects the business owner in the event that anything should go awry. If you are publicly selling anything to anyone as a means of income, whether product or service, the possibility of problems will always exist no matter how careful, discreet, or savvy you think you are. If you choose not to protect yourself as a legitimate business entity, it only takes one unhappy “customer” to pursue you for your personal assets.
Contrary to popular belief, you don’t need a storefront or brick-and-mortar location in order to qualify as a business, and you can keep your overhead and expenses fairly low by not hiring right away, by working out of your house, and by making valuable connections who will help you out or barter for services. And yes, you can always be found out: unreported income and unpaid tax could mean big trouble with the IRS.
If you're overwhelmed and don't know where to start, sites like legalzoom.com can guide you in the right direction toward filing for your business, and it’s not as confusing or complicated as you might think. If you fit into the small online seller category but you're questioning whether to report your earnings as an official source of income, see this guide from Etsy regarding legitimizing your online seller business. It will pay off in the long run, and there can actually be tax benefits to registering your own business. Trust: it’s worth it.
2.) Of All the Hats You'll Wear, Business Will Be the Most Important One
Many people who decide to go independent are transitioning out of their career field into an entirely new one. Others, though, may stay in the same, familiar field but have no knowledge of the setting-up-shop and running-a-business aspects of the industry. Just because you’ve worked in corporate law for years and years doesn’t mean you understand the ins and outs of owning a functioning firm or practice, catch my drift?
When you first get started, there’s a whirlwind of information flying at you and a mile-long to-do list. If you’re not lucky enough to have a book of business or group of clients already aware of your new endeavor who have committed to joining you, then it’s extremely likely that you’ll get so caught up acquiring new business and doing the actual work that you’ll forget about the behind-the-scenes facets of business ownership (which are equally as important). And, if you’re starting out small like most fledgling entrepreneurs do, chances are you haven’t hired a finance manager, accountant, or IT consultant. So, as a business owner, you must be prepared to be everything to everyone all the time.
John Politsky, President of Speakeasy Creative and JDMK Consulting in Moorestown, NJ tells us it wasn’t easy to get to where he is. In the beginning, there are a lot of things that can throw you for a loop. He says, “For me, the most difficult part of starting the company was just learning about business. There are so many things you don’t know that you should know. Things like profitability, how to invoice clients, etc. When you start a company you are so stressed about the actual work that you forget there is a ton that goes into just the back end. I think it is vitally important that you spend time learning your financials and learning about the numbers. This will save you in a pinch.”
3.) Working for Yourself Is...Hard Work
Unsatisfied with your current job and dreaming of greener pastures? Sick of working your butt off with limited potential for upward mobility? Fantasizing about coordinating your own schedule, making your own rules, and not having anyone to report to?
Don’t be fooled into thinking that working for yourself is all sunshine and roses, and make sure you’re in it for the right reasons (hint: the reasons above are great, but they’re not the “right” ones). Working for yourself requires a lot more motivation, determination, trouble-shooting, perseverance, discipline, and organization than you might be used to. It’s also chock-full of anxiety, uncertainty, doubt, and things that are necessary even when you don’t feel like doing them (simply because there’s no one else to do it).
Also, working for yourself, at least for the first year or so, means pretty much working around the clock. Sure, you can take an unscheduled lunch break and go grocery shopping in the middle of the day if you want to, but you'll probably end up working later into the night to make up for it. Depending on your line of work, you're probably billing clients hourly on a per-project basis, which means you're not taking a 40-hour per week salary with paid vacation time. Translation: you only make money while you're working. Not to mention, the sheer fact that you’re wearing ten different hats could mean that you’re pressed to handle urgent issues at any given time.
4.) Most People Will Not Care As Much As You Do
One of the most difficult parts of being self-employed is learning that no one is as invested in your dream as you are. You may be the best in your business creatively or when it comes to your specific area of expertise, but someone will always be there to knock you back a step. Whether it’s a critical customer, flaky client, or someone who doesn’t want to pay you what you’re worth, the first couple years of self-employment can be the most humbling experience you’ve ever had.
Greg Murphy, owner of Primitive Athlete (an advanced personal training studio in Ridley Park, PA) shares: “I have been training people for about 18 years now, and the hardest thing for me personally in the early years was expecting everyone to be as passionate about their training as I was. As the years went on I learned that not everyone is in it for the same reasons as I was, and it taught me to adapt things to the individual’s needs and what was right for them at that moment in time.”
As a business owner, you’ll have to be versatile, resilient, adaptable, and resourceful. Meeting people where they are can be difficult, especially when you know you could better serve them otherwise. But overall, the most important part of building your brand and reputation is client satisfaction, and sometimes that can mean compromise, not pushing as hard as you want to, negotiating a price, or reevaluating a strategy. Getting work is important, but customer retention is even more important. It may be difficult to understand others’ perspectives when your vision is so crystal-clear, but don’t let difficult interactions and outcomes slow you down or make you any less dedicated. Just roll with it and let it make you better.
5.) Time Is Not On Your Side
I’m not talking about market timing or perfectly strategizing the launch of your new endeavor to be sure it doesn't collide with the competition, I’m just talking about plain and simple time management. It can be easy to fall for the illusion of having more time when you first start working for yourself. There’s no one pinning deadlines on you or strolling into your office to interrupt you, there’s no more solid 8-4 or 9-5 (even if you map that out for yourself, it’s fluid), and let’s be honest — your phone probably isn’t ringing off the hook at first, either.
Even if you don’t have a ton of client projects to dive right into, using your time wisely is of the utmost importance to the success of your new business. Why? What does that mean, exactly? Well, once you do start getting customers and projects, you’ll have much less time to devote to building your brand, marketing and promoting your company, or actually selling your product — and how do you expect to grow if you’re not actively managing your growth? Unless you have someone working to do all that for you, getting yourself set up to resemble a functional business that attracts clients is crucial.
A website is very important, and it should take some time to be done properly. Branding should not be quick and hasty. The creation of social media profiles and consistent, engaging promotional content is more time-consuming than you realize when you’re in charge of it all. Blogging is a wonderful way to stay fresh and current, but many business owners don’t have time for it (and so they outsource).
When you’re first starting out, the temptation to curb spending at every possible turn is strong because of the uncertainty of the startup phase but, I promise you, it’s better to spend wisely-invested dollars in the beginning to build your brand and get yourself set up administratively than it is to play catch-up later and have these things look like an afterthought. Avoid the mess in the first place and any mess you do find yourself in will be much easier to clean up.
Stay tuned next week for Part II, where we’ll discuss five more things many entrepreneurs learn the hard way, and hear from another local business owner about why it’s important to stay open to changing directions!