How to ensure your business venture isn’t a spectacular failure – like mine was.
To the 1,288 women who are opening new businesses every day, you have my respect — tinged with the slightest bit of jealousy.
Why? Because I tried to start a business and failed.
Back in my 20s, I was bright-eyed, bushy-tailed and ready to take on the world, I opened my own business. I had big dreams of being at the helm of a cutting-edge branding and content marketing firm.
Three years later, I realized I make a far better soldier than I do a general, and that this big dream was now an albatross around my neck. So I cut it loose — or at least tried to. Even that proved to be a nightmare. I vowed never again.
Thankfully, it seems many women are far braver than I — there are 9.1 million U.S. businesses owned by women and a record-breaking number are starting every day. This is creating jobs and putting women at the forefront of the corporate world.
Still, if these businesses are going to succeed instead of closing shop like mine, the ladies running them had best be prepared. Or else they’ll join me and the other 8 out of 10 business owners who are back working for someone else…
Tip No. 1: You better know the nuts and bolts of business
I’m a great writer (you’re reading this, after all) and I’m a good brand strategist. So I knew the industry I wanted to jump into really well. But I knew nothing about the business side, and that killed me.
As a result, I hired idiot after idiot to help with accounting and taxes, followed all of their advice because I didn’t know any better, and wound up running the business into the ground.
They even screwed up closing the business down, so I had to hire more idiots to really get it closed – and yet I still get IRS tax prep forms every year although I was assured by the last guy that everything was taken care of.
The moral: Don’t open a business and simply rely on professionals to handle any parts you don’t know. You need at least a basic knowledge of EVERY aspect or you won’t know enough to avoid bad advice.
Tip No. 2: Don’t pick an industry where everyone else is failing
At the same time, I was trying to make my own venture succeed, I was also lead writer and art director for a new business owned by a client — an enterprise that also failed because the timing was terrible.
It was a real estate marketing firm started in 2008. The guy was a great Realtor with his own brokerage, but he ignored reality and started a new business right as the market fell apart. Seriously, we live in South Florida and all signs showed a collapse was imminent, but he plunged ahead anyway – and the business closed the next year.
The moral: No matter how much you may love an industry, if the money isn’t there then your small business is going to fail.
Tip No. 3: Focus!
That last point brings us to this: If you want to open a business, make sure you have the time and means to make it your only focus — not just your “main” focus, but the only one you have.
I was still working for clients and running this other guy’s fledgling enterprise instead of focusing on my own. I had to do it that way because I didn’t have the money to stop everything and be a boss – and that’s exactly what the business needed to succeed.
The moral: Make sure you’re at a place where you can focus on your business instead of working somewhere else or doing side jobs. This means healthy savings and a low debt ratio so you can maintain stability even on a trickle of income.
Tip No. 4: Don’t put everything at risk when you take the risk
Opening a small business is a risky move no matter how you cut it, given the statistics. But you should minimize that risk as much as possible. Taking out an unsecured loan to get your venture off the ground? That’s reasonable. Taking out a second mortgage so you lose your home if your business fails? That’s insane.
Risking everything for your dream sounds really noble, but in practice it’s really stupid. Given that more businesses fail than succeed, you’re putting yourself in a bad position where you have a high probability of losing your home.
Tip No. 5: Listen to the haters and learn from their negativity
My mother-in-law is looking into opening a business and there are naysayers shouting from the rooftops at every family gathering about how she’s doomed to fail. I’m not one of those. She’s a corporate CPA, she’s been in the business world for longer than some of those haters have been alive, and she’s consulting with women who’ve already had success. IOW she’s doing it right.
And one of the things she’s doing right is listening politely to the haters and using all that negativity to improve her business strategy. She hasn’t even filed any forms and she’s already refined her plan several times. She’s also really good at leveraging all of the expertise around her instead of relying on “experts” she doesn’t know.
The moral: Use the resources around you – even negativity can be turned into positive learning for building your business.
So to 1,288 women starting a business today, I wish you luck. Just make sure you’re setting yourself up for success, because closing a business is as depressing and opening it was exciting.