So you’re thinking of starting a new business? Congrats! This is a very exciting time for you. Before you get into neck high water, I want to share some thoughts. Entrepreneurship is really hard. You will encounter significant roadblocks along this journey. Starting a business is not the same as taking a job at a big company or even joining someone else’s startup or small business. If you are the founder and CEO, then it is all on you.
Do you have the right mindset to be an entrepreneur? It takes a high appetite for risk, this is not for the faint of heart. You need to be OK with failure because there will be failures along the way, both big and small. You better have the resilience to get back up every time the startup experience knocks you down. You also need to be comfortable with uncertainty. While there are guideposts along this journey, chances are you will often be making decisions in the dark and the impact of those choices will take time to evaluate. Does all of this sound exhilarating or terrifying?
If you are still with me after evaluating your mindset, the next area to consider is whether you have a passion for the business you are considering launching and the problem you are trying to solve. Startups generally work best with passionate founders who feel deeply about bringing a solution to the world. Hopefully your business is filling a hole in the market that you have felt the pain of yourself. Hopefully you feel so strongly about fixing the problem that you are willing to sacrifice your safe career for the crazy startup life. If not, this journey is going to be a lot harder.
You’ve made it past the first two hurdles of mindset and passion, now let’s get down to the financial nitty gritty. Here’s a sad truth, most startup founders cannot take a salary for the first 6–12 months. And I mean none at all. And even after you have some revenue traction or raise some outside capital, chances are that you will only be able to take a limited salary for a number of years. Do you have the financial wherewithal to survive this type of cash drought? If not, you may need to put your entrepreneurial dreams on pause while you build a cushion in your bank account. Please note also that the big payoff of a monetization event through selling your business or taking it public is at least five years in the future. Can you wait that long?
Are you still excited about starting your own business? Awesome! Here’s the last mental hurdle to prepare for. As the founder you better be ready to do every terrible job within your company. When I ran a high school sports media company, I lugged our video production case up 50 stairs at a stadium after sitting in traffic for 1.5 hours driving to a Friday night football game. I also sat out in front of building at a high school basketball tournament we ran and sold tickets instead of sitting in the gym watching the game action. And I am sure there are founders who had to do much nastier and dirtier jobs than this in the early days. Being the boss at a big corporation may bring a lot of perks, but it is the exact opposite at a startup. In the early days, everything falls on you so be ready.
Thanks for reading today’s post, I hope this helps you prepare for the hard work and challenges of entrepreneurship and leaves you better set to be successful.