I recently put a poll out on LinkedIn asking people what they thought was their biggest obstacle to starting a business and the results came back that financing was the #1 reason they couldn't get started. While I wasn't surprised by this answer, my hunch that it wasn't true was confirmed in a conversation with a good friend of mine and business broker Kris Fuehr of Paulson Exchange. In my conversation with her, she confirmed that getting funding was not the hardest part of business ownership. In fact, there are a lot of people who want to put their money to use for the chance at a big return. It's a great model when you think about it. Someone else comes up with the idea, does all the work to get their business operational and, with luck, profitable. The terms of how much the investor is involved are negotiable, but I can say with a fair level of certainty that the investor would like to do as little work as possible in most cases.
When it works, it's a great model that's likely to net returns much greater than other investments. The flip side is they could lose everything, but for some, the risks are worth taking. The key takeaway is this: There are people out there willing to invest in good ideas.
Okay, so with the myth of not being able to get money out the door, what is the hard part of starting a business. It's both simple and complicated at the same time.....it's showing up for your business consistently and intentionally. The longer that I'm a business owner, the more I find business ownership closer to raising a child than anything else I can think of. So parents out there, listen up! You have transferable skills. For those of you who aren't parents, not to worry. All of these skills can be learned.
Growing a business is like raising a child
Here's how I see it. A business is formed as an entity. The definition of 'entity' is: a thing with distinct and independent existence. To take is a step further, the 'entity' is created. So, when you start a business, you're creating something from virtually nothing and bringing something new into existence, much like brining a new human into the world.
Going further with this analogy, the entity, like children will have growth spurts, tantrums, give you moments of pure joy and pride, go through illnesses, reach milestones, and push you as the owner/parent to limits of patience they didn't know existed, and challenge everything they thought about being a human on this earth. And, it's not until the business is about 10 years old do you feel like you can leave it on it's own for a bit and it won't burn the house down.
(Now, I say all of this not to diminish the gravity of raising a child. In no way am I suggesting that these are equivalent to one another. I get it. A business can be sold and a child can't. Businesses don't have as much at stake as raising a child, but it's the closest thing I can think of to describe what it takes to create and build a business.)
What all of this means is: you have to show up every day whether you want to or not. You have to push beyond your former ways of thinking and really get creative to solve problems. You have to think ahead and form strategies into the future to mitigate challenges. You will have to likely rely on others to provide for your business and accept that no one will be as good as you are when it comes to caring for your business.
This is what investors and lenders look for in an aspiring business owner. This is why they make you revise your business plan,
scrutinize every line in your proforma, and why you have to have some skin in the game too. Investors know that the people who keep coming back with answers and revisions are the ones who are more likely to succeed. It's not a reflection of how good they think your idea is, it's a test to see if there's evidence that you have what it takes to keep showing up for your idea.
Your vision, commitment to it and the ability to solve tough challenges are the cornerstones of a business that will withstand the headwinds on the horizon.
Oh, and that bit about it taking 10 years....don't let that discourage you. It doesn't mean that you won't make money or be profitable for 10 years. Not by a long shot. Every business is different.
What seems to happen universally at the 10-year mark is the business stabilizes and becomes established within the ideal customers/clients. It becomes known to those who are interested in knowing about it. At this point, the founder has a decision to make. Slow the growth or expand into a bigger market. I vote for the second option because business that don't sustain growth will, in almost all cases, start to deteriorate. The growth at this point is usually not 'life or death' but can be a more intentional evolution that aligns with the founders' values and vision in a new way. All of this to say, it's best to start out sooner rather than later because there's no better time than the present to start the journey! More on a CEO mindset later. For now, just focus on what directly in front of you.
If you've already started your business, where do you feel like you are. Newborn-awe, terrible twos, rebellious teenager? When we think about the growth of our business against the backdrop of what it takes to grow from a child to an adult, it makes it a bit easier to accept these phases and understand that they will pass if we just keep going!
