With the looming reality that 8 out of 10 small businesses will inevitably fail hanging over your head, it’s no surprise that transitioning from an employee to an owner is tough.
Most startup owners are paddling nothing more than a flimsy canoe out into the Pacific Ocean of entrepreneurism, when in reality they need a well-built yacht to protect them from the unseen sharks, reefs and wily thieving pirates that await them along their journey!
Take a moment to browse the following 8 transition tips before proceeding into this vast world of unknowns:
1. Take stock in yourself before making the first move
If your new entrepreneurial journey is going to be successful, you either need to do:
A. What you love.
B. What you know.
C. All the above.
Some experts will tell you that it’s important that you love what you do. But what if you’re one of those rare individuals who loves to make money doing what you know?
It’s important to take stock and decide what your overall goals are.
Do you want to build a Fortune 500 company with yourself at the helm indefinitely; or turn out a company or multiple companies to be run by other people allowing yourself to cash the checks and live unencumbered off the profits?
Maybe you just want to earn enough cash from this venture to start a more costly one that’s your real life’s passion?
Figure it out…
2. Find your customers before making a move
This might not apply to all of you. If you thrive on being pushed up against the wall, with nothing but your wits and charm to win a battle; maybe you can throw all caution to the wind and having paying customers in your first week of business. Most people will fold under the pressure and wish they’d thought ahead and had at least one customer to get the ball rolling.
3. Learn to live on a budget
Whether you’re bootstrapping, already have external funding, or going all-in with your life savings; learn to budget. The first two years are the hardest, with many unexpected expenses and financial lessons to be learned.
Few of us will have the foresight to see many of these coming, but if you run your business on a constrained budget, even allocating saved funds for such events, you’ll turn debt into profit more quickly. See Business Startup Costs and 10 Hidden Costs of Running a Small Business.
4. Forget about excuses
This is something we all know about, so I won’t oversell the fact that you have to stop making excuses – to everyone. Be accountable. When you find yourself going down that path, stop and think of a solution, rather than pointing fingers or trying to justify yourself. Nuff said?
5. Understand when it’s time for a break
This tip isn’t about tax breaks folks. It is June after all!
Take a break when you need to. You do have to work harder than “Joe Employee” but that doesn’t mean you can’t leave your desk or the office – ever!
Most people have anywhere from 30 – 90 minute of actual productivity in them before they need a mental/physical break.
Consider scheduling a nap time (see this Harvard Review article.)
6. Being a perfectionist leads to failure
Learn the value of the 80/20 rule. Understand how it works.
Don’t spend 80% of your time trying to perfect 20% of your potential, that’s not what it’s all about. You need to spend 80% of your time cranking out new ideas, cultivating new clients, creating new products, hiring new and innovative staff, finding joint-venture opportunities, etc., in order to get that 20% of each that’ll be impactful to your business.
If you consider how the Pareto Principle actually works, adding perfectionism (or unneeded planning, back-tracking, revising – i.e., overthinking) actually puts you into the category of Diminishing Returns as you’re needlessly adding a time-consuming element to the production process of your business (whatever your business is.)
Get more ideas out there and stop hyper-focusing!
7. Stop listening to Tim Ferris
Please take this mostly as tongue-in-cheek advice to make a point; not a dig at Pareto-fanboi Tim Ferris. Ferris is the ultimate entrepreneur and you should definitely read his blog and his books. However, his Four Hour Work Week mantra has inspired a lot of people to leave their job, dreaming of working a few hours on Monday, then taking the rest of the week off to play golf and have fun.
Starting a business is hard work. Unlike Ferris, you might not have the mental discipline to get 15 or 20 times the return-on-time-investment that he extols (based on the typical 60 or 80 hour work week an entrepreneur can expect to invest when starting a business).
Plan to work hard to establish your brand – to plan and possibly fail a few times – before hitting your stride and being able to cut your hours.
Plan on investing at least five years of regular time. That’s only if you make it through the tumultuous first two years (see Surviving the First Five Years)
8. You can’t be a YES man/woman anymore
Sometimes you’ll have to say “No” to a client, employee, investor, family member, etc.
You do need to take care of everyone, but sometimes you can’t give client “John” the 24-hour turnaround he wants; “Suzanne” can’t just take tomorrow off because she has a doctor’s appointment she forgot about… you might have to miss your daughters soccer game next week when your office server crashes. These and many other scenarios will plague you as an employer.
You’re not an employee anymore!