The Entrepreneur Insiders network is an online community where the most thoughtful and influential people in America’s startup scene contribute answers to timely questions about entrepreneurship and careers. Today’s answer to the question “What must every entrepreneur know about startup success?” is written by Allen Shayanfekr, CEO and co-founder of Sharestates.com.
The success of a startup can hinge on several factors. Often times, entrepreneurs will start a company without understanding the risks and time associated with startup success. As the founder of a real estate crowdfunding startup, I have learned a lot over the last two years and am eager to share that information with other entrepreneurs. So it here goes:
A 9 to 5 work-day doesn’t exist.
The first tip I would give any entrepreneur is to forget the concept of a 9-5 work day. There is always another email to send, problem to solve, or deal to close. For example, at Sharestates, we are very relationship driven. This inevitably means hosting dinners, lunches, and calls with our clients at their convenience. Fostering those relationships outside of the office, and typical hours of 9-5, has been a key to our success. If you start your company thinking that all of your responsibilities will be handled in an 8-hour day, you are setting yourself up for failure; this brings me to my next tip, which is hiring the right people.
Make sure you have a solid operations team or manager.
So many entrepreneurs that I have met have the same complaint — their team. I think the best way to tackle this is to ensure you have a strong operations team and/or manager. Your operations team should be responsible for ensuring that all company processes are effective. Without a solid operations team, the inefficiencies from department to department will end up costing much more in the long term.
Every penny counts.
Many entrepreneurs believe that they will be able to easily raise capital as soon as they need it. The capital raising environment is volatile and the key to survive a raise is to find the quickest path to profitability even if it means growing slower. Because raising capital is a long and tough process, you should make every single penny count. Sharestates started out with a $25,000 family loan and now has originated over $200 million in real estate loans since its inception in 2014. Since Sharestates has been bootstrapped to date, we try to ensure return in investment on each expense. When it came time to raise capital, we decided to take the crowdfunding route usingSeedinvest.com. Being familiar with the regulations around crowdfunding, this was the fastest and easiest route for the company. Until your company is ready to raise capital, be sure to be in touch with each department’s spend to ensure you are maximizing each dollar.
Make sure you have a good lawyer.
Startup success varies from industry to industry and from founder to founder, but leading with integrity, honesty, and hard work will never steer your company wrong.
Make sure you consult an attorney to ascertain all regulatory and compliance risks – not everyone is aware that sometimes their line of business is subject to some form of scrutiny. Being that I am a licensed lawyer as well as the CEO and Co-founder of Sharestates, we have a slight advantage in this regard, however we still make every effort to consult a legal team as often as we can.This is especially important in an industry as new as marketplace lending.
Leaders in this vertical understand that eventually, someone is going to fund a loan they shouldn’t, or comprise their user’s security — which will lead to tightened industry regulations. Preemptively taking routes to ensure user security and company compliance is the best way to make sure that your company will be able to withstand the test of time. Sharestates has voluntarily conducted audits on company financials and security to set us apart from competitors, as well as to ensure that we are prepared for any changes in industry regulations.