Bitten by the entrepreneurial bug? Me too. So have a lot of us lately. Whether it’s a bad boss, a brilliant idea or a life crisis that has you on the hook, the reasons for starting a business are fairly common.
Budding business owners often begin a new venture because they either recognize a niche that needs to be filled, or they have experience from working in a larger organization and realize they can do it better on their own.
These are all valid reasons for starting a business, and they each have given me the motivation to start up solo myself. But as exciting and invigorating as it is to be your own boss, there are a number of common pitfalls that can make it all come crashing down - pitfalls that can be avoided by investing in one non-negotiable resource – advice.
What every single business owner needs without question is someone who is going to ask them the tough questions. These are questions you probably don’t want to be asked, and heck, might even be embarrassed to answer. They are the questions that might make you wonder why you’re starting a business in the first place.
People who invest their life savings into a business venture without including an advisor in the plan often baffle me, because in my opinion, advice is the single most important piece of ammunition in any business artillery. According to the U.S. Small Business Association, about half of all new establishments survive the first five years and only one third are around for a decade or more. Many have to shut themselves down simply because they’re not getting the return they expected and can’t afford to go on. So if most young businesses face the same initial hurdles, why aren’t they doing more to avoid them?
Nearly every successful business owner I speak to tells me that the first mistake they made in the beginning was underestimating the length of time and the money they needed to get their business off the ground. There are other notorious gaffes: investing more in the look of the company than the guts of the plan, buying too much or too little too soon, or getting caught up in the sexy stuff and turning a blind eye to the down and dirty necessities. These missteps might seem obvious but they’re the all too common business blunders that novices face when they don’t have the right advice.
The whole idea of a business advisor is having the comfort in knowing that there is someone on your team who has been there and done that. You don’t buy a new car without taking it for a test drive, so why would you start a business without involving someone who is all too familiar with how the process works?
Inspiration, motivation and drive only go so far. What every budding business owner needs is someone who will challenge the plan. Someone who will start by identifying the simple things like getting a compliance road map from your lawyer, developing a financial plan with your accountant and ensuring that your bank will deal with your new venture. Then it’s about having someone who will assist you in developing and executing your business plan in order to keep your company afloat.
It’s also having someone who will ask certain questions that are less obvious but equally as important. For instance, what kind of structure are you operating as? Will you take your income as salary or dividends? Will you employ or contract? Does your business name require a trademark?
Once your business is off the ground, the need for an advisor does not disappear – it becomes even more important. On a constant basis you will need a person who is going to dig deep, to challenge you and make you think as much about the possible setbacks as you will about the potential successes. You need someone who cares about your business and you as the owner, but you also need someone who will provide a constant reality check, and keep things in perspective.
Every new business owner starts their journey with motivation and inspiration, but what happens when the road takes an unexpected turn and things don’t necessarily go to plan? That is when your advisor will be invaluable – because they’ll kick you in the bum when you feel like giving up and challenge you to keep you going.
Even the strongest, smartest and most accomplished businesspeople in the world have had someone they look to for advice. There’s been someone who has done this for me throughout my career, and it’s the most valuable asset I will ever have.