Frank, I’m an aspiring entrepreneur and would love your insights on how to get some ideas off the ground and transition to this lifestyle full time! Looking forward to hearing back from you!
Hi. The first thing I will tell you is that entrepreneurialism is filled with highs and lows. Both in personal success and $$. It takes determination and a healthy dose of ignorance. The ability to forgive yourself and learn from your mistakes. In fact learn from everything! Fail fast.
The one key that unlocks all doors for an entrepreneur is connections. So hats off to you for starting this conversation.
So what about you? What is it you expect from me? What is it that you want to achieve?
Thanks for the sound advice right from the start! I love it!
I’d love to have the support to figure out where to start. How do you get ideas succinctly on the page? How do you bring those to fruition? What’s the next step? How do you make a living being an entrepreneur?
I feel like that’s a good start!
To answer your questions quickly:
How to start?— Not to sound obtuse, but you start at the beginning. Break the giant task into manageable pieces.
How to get it on paper? — Again, not to be facetious but I actually put ideas down on paper. I take a big sheet and put my goal at the top. Then I fill the page with all the brain chatter that comes to me. Free form, loose thought. It’s a page of amazing possibilities. Some realistic, others not so much. All the ideas and opportunities I can think of. (Notice I said opportunities. I don’t bother with obstacles.) On a second page I connect and organize those ideas into linear groups. In my case they often fall into Concept creation, Manufacturing, Marketing & finally Sales. Ideas that don’t fall onto a time line or group are just that. Ideas. Not to be forgotten but probably not plausible at this time.
How do you bring those to fruition? What’s the next step? — With this paper I now have a rough outline and time line of my project and all the tasks I need to fulfill. I let the idea sit for a while and add new ideas or tasks as they come. I’ll even revise them well after the project is in motion. This is a living, fluid document that I treat much the way an explorer creates a map. It’s a visual representation of the places I’ve been and the places I plan on going. It’s also unfinished. Eventually parts of this map become memorized. This map becomes useful for planing the next adventure. ~ that’s a key point. A lot of this business is learning from your failure and getting around it the next time. Kinda like playing classic Mario Bros. The more you play the better you get at memorizing the journey. You recognize areas of potential and areas of danger. You get better at the game.
How do you make a living being an entrepreneur? — I’ll let you know when it happens. ; ) Kidding aside this is a HUGE subject.
Money is extremely important and I wish I had learned these lessons in advance. You have to be on top of your cash flow. It’s one of the key metrics by which you measure your success. You can try measuring by happiness or well-being but if you neglect your cash flow… well happiness will suffer. Tension will escalate with your debt.
So here is what you need to know.
I’ve heard many starters say their industry is feast and then famine but that’s not true. They have it backwards. There is a lot of famine before there is any feast. I believe this simple grammar error causes a lot of businesses to fail. Your business will require your saved capital or possibly debt to get it up and running. Even if you manage the up front cost on your own, you will eventually lean on your credit card to cover rent, unforeseen shipping cost or other miscellaneous events. The 20th of the month rolls around and payment to the bank is required but you won’t get paid for three more months (plus project creep). Now you have interest on that debt. By the time you do get paid, 30 - 60 days after you invoice, the bank is calling and your wife is stress’n huge. This is a real story! Five months no money. Project ends and you want to celebrate but you haven’t had a chance to chase new business. Half your big pay check went to past expenses. Too much was taken by needless interest and there is nothing in the pipe. Starving and stressing for months and you have little to show for it. — How’s your well being?
Now that I have scared you out of your short pants, let me talk you down. There are lessons to be learned. Ways to push past the start up pains and move into maturity.
SHOW ME THE MONEY!
• Rarely do you get paid in advance. Most people invoice well after the job is done. Most companies fail. Don’t follow their example
•Invoice at all milestones
•Load your invoice at the beginning. 40%-50% at the first milestone. — Put it in the contract or estimate. Clients are happiest at the start of a project when everything is exciting and fresh. Now is the time to hit them up for payment *and ask for a review. Send them a ‘how are we doing’ form or ‘star rating' that gets posted on your site.
•Invoice immediately. Invoices received on the day of closing a milestone or project have a much faster turn around for payment.
Pre-build your invoices with your estimates. - why not? Make it as easy as possible for you to send that invoice when it’s due.
RUN FORM THE DEVIL!
•Interest is the devil. Avoid your credit card. Spend only what you can earn.
•If you have to go in to debt calculate the true cost with interest. Break out the payments and make sure you make those monthly. Pay off as much up front as possible. The credit card is your worst enemy! Keep it on a short leash!
•Get a line of credit and never use it. Lines of credit have much better interest than credit cards. - Again pay that sucker off!
KNOW YOUR HOUSE
•Be aware of your time lines, expenses and income.
•Take half to a full day every week to do your accounting and sales.
•Make a fake board of governors (mom, dad, best friend, life partner, life coach) for your business and give them quarterly reports. This will hold you accountable and create a support group.