I was talking to a friend of mine, and he said:
“I want to start my own business, but I’m worried that I’m going to regret that I didn’t start twenty years ago.”
Yep. This hits so close to home. Honestly, I wished I had started my own company right out of college. This post is going to highlight the reasons why you should incorporate today. These musings are in no order of importance, just merely observations that I’ve made since quitting my job and being a full time entrepreneur.
Nobody wants to deal with poor people
It’s going to sound messed up, but it is so true. Nobody wants to deal with poor people. If you’re starting out, and you don’t have much money, you’ll quickly find that the only people that WANT to deal with you WANT to make you poorer. Typically these companies will try to sell you things you don’t need or want, and some will go as far as attempting to scare you into paying them. I once got a letter from a company that looked like a government fine, but in reality it was a company selling OSHA posters or something.
Oddly enough, being poor can be an advantage. If you commit to not spending any money, it’s only ever possible to make money. *taps temple*
Unless you already have a revenue stream, a line of credit, or a bunch of investment capital, there’s a good chance that no one is going to want to deal with you. It’s probably best to learn this before your business really takes off and there is real money on the table. There’s even a good chance that you might not see with your business advisors, peers, or even paid experts. Without money, revenue, or investment, you’ll find that you’ll be at the mercy of whatever you get. Nobody is going to want to deal with you except for maybe the SBA, SCORE, PTAC, and, in my case, CTSBDC. Luckily all of these resources are free.
If you had started your business, say, two years ago, a lot of these problems could have been figured out already. I’m not saying that by merely owning a business you’ll find investors and have investment capital… but I AM saying that banks, some investors, and some assistance agencies won’t even talk to you unless you’ve been in business for at least that long.
In as much of a catch-22 way as possible, you need to already be in business to be in business.
You will learn that there is nothing special about owning/running a business.
This whole adventure started off with a question. “What does my boss know that I don’t know?”
Well I’m six months in and I’ve answered that. The answer might shock you, though. Your boss doesn’t know anything that you don’t know, or can’t easily get an answer to.
Think of a business as a giant pool of money. Now stop thinking. Your boss isn’t smarter, more talented, or more favored than you… (I mean, maybe, but probably not)… your boss just determines how money is spent or not spent. In this sense, it will be up to you to determine how resources are allocated, and this is a job like any other job. Apparently this job is called management.
If you have a bunch of money, then a lot of this “running a business” stuff can have money thrown at it to go away. Don’t want to do your own books? Throw cash at it. Don’t want to make a sign for your business? Throw cash at it. Don’t want to make your own business cards? Throw cash at it.
But anytime you’re not throwing money at a problem, chances are you’re throwing people at the problem. By having a business already in place, you’ll have an idea of what you need to throw money at, and what you need to throw people at. After a while, the question won’t be “what does my boss know that I don’t know?“, but instead more specific ones like, “Who am I going to get to market this? Should I call <insert name>? Or should I do it myself?“
This is something that you can’t learn by reading or taking classes on. Every industry will have specific demands, and so the sooner you are engaged in your industry, the sooner you fully appreciate the finer details of it. Luckily, experience is often times free, so starting your business today is totally affordable.
People will treat you differently
I used to tell people that I was an embedded software engineer. This would inevitably lead to a response of “what’s that?” or “that’s nice.” People have no idea what the hell I do.
This conversation changed, however, when I started my own company. I think because everyone has at some point has fantasized about being “the boss” or if they are a boss then it’s “being their own boss.” It’s human nature to want to be in control of something, especially when that something is what you do for 40 hours a week. People still have no idea what the hell I do, but at least now there exists a follow-on conversation about entrepreneurship.
Make no mistake. My company has one person, and it’s me. I was forced by the state of Connecticut to take an official title, which technically means that I’m a CEO. I don’t think I’ve ever used the title to introduce myself, however. Heck, my business cards don’t even have a title on them, and I hand them out like candy on Halloween.
You will hear people will say things like “I know the CEO of <insert company name>” , or maybe they’ll ask you if you have any work without knowing anything about your company, or maybe they’ll just think you’re a scumbag for being a government contractor… and it’ll make you cringe at first… but just remember that you’re starting something. A movement, as it were. By having your business already formed, you will have had a lot of these interactions and know how to deal with them.
Only by having these interactions will you get past them, and starting out small isn’t a bad way to be.
You will see the world differently
Owning a business is like having a puppy. Except everyone likes puppies.
There are some real ups and downs to business that I wasn’t prepared for. Some days I think to myself “this is the best, I love owning a business!” and others still where I dread even getting out of bed.
I’m about six months into owning my own business and the roller coaster is starting to calm down. I don’t think the joy doing well, or the frustrations of doing poorly will ever go away entirely, but it’s a different feeling when you know that YOU are responsible for some of these outcomes.
In a way, this entire experience has changed how I look at things. When I walk into a store, I see some of these prices and I think “Wow, they’re out of their mind. They’re probably only paying a fraction of that to get it.” Or when I buy something I think “do I really want to spend the profit margin of <insert item that you sell> on this?“
Just knowing what is going on financially and how it relates to your daily activities is a bit of an eye opener. If you have a business already, and you’re trying to make money at it, you will know about the effort that went into it. You will be less likely to let that money go back into the financial ecosystem. In many ways this changed my behavior, and thinking.
Had I this foresight before starting a business, I probably would have had much more money saved in advance.
Starting today will give you time to think
You’re not going to have all of the answers. Just accept that as truth. By starting sooner, you will effectively be buying yourself time to figure things out. And, it’s cheaper than going to school for business. Heck, in about 10 minutes of talking I could guide something through the process of starting an LLC … but I didn’t know that before I started.
If you’ve already got a job that’s paying your bills it’s probably better to start now before you have too many obligations, financial or time-wise. This will allow you to figure out each aspect of your business before taking the plunge and committing yourself to being a full time entrepreneur. Even if you can only commit to developing and/or selling one product or one type of product, that is all you will really need to understand most things.
If you’re selling a service, then it’ll probably be more difficult time-wise, but at least you’ll establish a track record of performance. People like track records of performance if they’ve never dealt with you personally, and so having one is going to be critical to your success.
If you start small you can also form reasonable expectations as to what market demands are, what your profit model looks like, ect… All of this would end up in a business plan, and everything that’s in a business plan you’ll have to know by heart before you even start a business (which paradoxically you will have already started.)
I don’t know what else to tell you. I don’t think that there is any age where you will start a business and not say “I should have done this years ago.” You will. It’s a fact of life. Accept it and move on to actually doing it.