Often I will ask my 9 year old son, Zach questions about business, marketing, etc. More then not he surprises me with his comprehension and insight. This is one of those times. I asked him what topic he thought I should write about in this week’s article. He said, “Write about what it takes to start a business.” I mulled this over and told him to tell me more. He then proceeded to tell me to write about the “mental aspects.” He further explained himself by saying “tell them about the patience they will need. The hard work they will need to go through.” After a moment of silence I told him I thought he was on to something. So here you go Zach. I hope I do your thoughts justice.
According to Brian Headd of the Center for Economic Studies, 2/3rd of new start-ups survive at least two years with ½ surviving at least four years. His research of major factors contributing to those surviving include ample supply of capital, large enough to have employees, the owners education and reason for starting the business in the first place.
So what are some of those mental aspects or reasons we need to keep in mind?
To start a business one needs to be mentally strong. There will be troubles and trials. There will be times of exhilaration and also despair. It’s not uncommon for a small business owner to have both of these experiences multiple times a day. Regardless if you start a business from scratch or own a current business; there will be days that nothing goes right. There will be days when you feel like quitting. Don’t! Mr. Headd mentions in his paper that of the personal reasons you started your business, your motivation; was one of the major factors leading to successfully staying in business.
I had a successful career as a Chief Financial Officer with a local company, when my wife and I felt the pull to start our CPA firm. We planned accordingly, developed a business plan and were ready to go. I was starting out with no clients, but we believed in what we were attempting to do and were motivated. We started the firm in November and then the war started. I was currently a Captain in the Air Force Reserve. My unit went on 24 hour alert mid-December and stayed there until April. Bags were packed and we fully expected to go. Most of my unit did go over. I was one of about 15 that did not. Needless to say, I didn’t do much business during this time period. Not knowing whether I was going to be there the next day, it was very difficult for me to morally attempt to obtain clients for my start-up CPA firm. This experience helped to teach me patience. Marketing ideas may not pay immediate dividends. Relationships and networking efforts may not get you the results you were hoping quickly. Not many of us will be Dot.com overnight successes and hopefully we won’t also be the Dot.com overnight failures. You are in business for the long haul. Patience is essential. This in no way infers you should just set back and wait. A Chinese proverb states, ‘Man who waits for roast duck to fly into mouth must wait very, very, long time.’ You will need to work hard and it will be difficult, just don’t get impatient and quit.
If you have been an employee before you understand the comfort of receiving a routine paycheck. Although hopeful, this won’t always happen in a small business especially during the early years. Now, we didn’t know we were going to war or that I was going to be on 24 hour alert for several months, but we had planned financially before we started the firm. Even since then the reliance on a routine check hasn’t always been there. It is very difficult to separate the finances of the business from the individual, so don’t try. Instead, prepare a personal budget and stick to it. When times are good, use it as an opportunity to save some of your money. It will pay dividends when business is down. The number one cause of business failure is money. Plan accordingly. Prepare accordingly.
Don’t be scared of the roller coaster we call entrepreneurship. Just hang on and enjoy the ride, never forgetting the reasons you’re in business.