The harsh realities of entrepreneurship
by Tieja MacLaughlin
Lets cut to the chase - entrepreneurship is en vogue.
The millennial-driven, Silicon Valley-inspired desire to own a start-up, get rich overnight and fly your private jet to an island full of cash, cars, craft beer and Converse sneakers.
That's the dream, right?
Reality check - the "millionaire-by-30" thing is about as fictitious as the unicorns that have been trending this year.
Entrepreneurship is an outstanding challenge. Business ownership is tough. Scratch that. It's tough as hell.
No one - and I mean no one - can fully prepare you for the challenges you'll face. In fact, most small businesses fail at an alarming rate. Simply to sustain your business year-over-year can be considered success in and of itself.
Here are some of the harsh realities I've been slapped-in-the-face with so far:
GET USED TO BEING BROKE
Years 1-3, at least. Every cent of revenue should be reinvested into the company. You'll feel richer than you are when you settle your first big invoices, but don't be short-sighted. If you want to play the long game, and you want to stay in business, save your pennies for a rainy day. Be conservative - live in a shoebox, eat Spaghettio's, skip the bottles at the club. It will be worth it. I can promise you that.
GET USED TO BEING ON CALL
Going out to forget about work, unwind and enjoy a cold one? No such thing. You're always on the clock. And quite frankly, this is how some of your best deals will be made. My longest standing clients were acquired over an "after hours" conversation at a local restaurant or bar. Your cell phone bill will be expensive. Very expensive. And get used to dealing in different time zones, area codes and in accordance with a variety of industry-specific hours. Oh, and sleep? Hah. What is sleep?
UNDERSTAND THAT CASH FLOW WILL BE THE CAUSE, AND SOLUTION, TO ALL OF YOUR PROBLEMS
When I first transitioned from freelancing to business ownership, all I heard was "cash flow, cash flow, cash flow". I had no idea what it meant. All I knew was that I didn't want to take on debt if I didn't need to. While this is every bit logical and safe, your business can't operate without cash. Period. You need cash upfront to fund the services you're providing, or manufacture the product you're delivering. And you won't see any of that cash back from the client for anywhere from 30-90 days. For the longest time I used my personal accounts to float vendor and consultant payments and it was a slippery slope that led to a disorganized accounting mess. Think of it like a cash register at a retail store - you can't make sales without it.
YOU'LL LOSE FRIENDS
Through no fault of your own, your social circle will naturally shrink. Rather, it be refined. Not because you want it to, and not because you don't value your friendships, but simply because there are only so many hours in a day. The limited number of social hours you get will more often than not be spent with like-minded people who understand the intricacies, demands and responsibilities you're faced with. 9-5'ers? Forget it.
YOU'LL NEED PROTECTION
And I'm not talking about muscle. Today's fights are fought in the court room. I was raised on the handshake model, so naturally, that's how I started making deals with clients. It didn't take long for me to realize that others aren't as trustworthy. I have four lawyers on speed dial now. They're expensive, but worth every penny. Invest in a standard contract at the very least. Accountants are equally as important.
ROLL UP YOUR SLEEVES
Think, blue collar. You need to wear every hat, understand every job and get downright dirty. And be humble about it. You're not Steve Jobs, you're not Richard Branson, you're not Mark Zuckerberg. Yet, anyhow. Operating your business under the assumption that you are, will only leave a bad taste in the month of anyone you interact with. In my experience it's best to keep your head down, work hard and let the results speak for themselves.