Never Count On Your Friends, And Other Harsh Realities I Tackled As An Entrepreneur
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 are some of the biggest misconceptions about startup life?” is written by Ed Mitzen, founder of Fingerpaint Marketing.
Being a startup entrepreneur definitely has its perks. You’re your own boss and you get to build something that’s truly meaningful to you and hopefully the consumers or clients you’re trying to attract. It’s great when things are going good, but the weight of responsibility and accountability can be too much bear when things turn south and it’s all on you. So here’s three harsh lessons I learned thus far:
Businesses don’t fail because they aren’t profitable. They fail because they run out of cash.
Cash is absolutely king when it comes to starting a business. You have to plan for slow times and unforeseen costs. There is nothing more stressful than not having enough cash coming in to pay your bills and staff. I’ve been there. It’s agonizing and can take your energy away from growing your company.
When we were starting Fingerpaint, there was a period early on when we had our largest client pull back their spend due to unforeseen issues. We made the decision to not layoff staff in hopes it would instill loyalty and galvanize everyone to find new clients. While it did that, we were literally two weeks away from defaulting on our financial obligations and closing the company. There was a period of about three months when I didn’t sleep and had health issues due to the crushing pressure. Fortunately, business turned around just in time and we pulled ourselves out of the abyss, but the lessons I learned in the beginning related to cash flow will never be forgotten.
If you think you will be able to take vacations and holidays like you did when you worked for someone else, forget it.
There are no days off in start-up life. You will be working around the clock just to survive. I’ve been in our office on Thanksgiving morning every year for the past 9 years, because to me, that morning is just another Thursday. While I’ve never missed a Thanksgiving celebration with my family, early on it was a struggle to “be present” when I was constantly thinking about surviving as an entrepreneur.
With all the companies I have helped to start, it was at least three years in before I could truly relax on vacation. Early on, you are always on. Emails, texts, voicemails and conference calls are a vacation reality. Several years ago we had an opportunity to earn some work at McDonald’s. Yes, that McDonald’s. The pitch was during my vacation, so I took two days in the middle of my vacation to make the meeting to try and win the business. We didn’t get the work (we came close), but if I had to do it again, I still would have made the decision to leave my vacation for a few days. That type of “do what it takes” attitude while you are taking a break is imperative for keeping your business alive in the start-up days.
Many people assume that their friends and past business contacts will be lined up to help with their start-ups. That’s rarely the case.
This headline may give an impression that people are heartless jerks. That’s not my point here. When you tell your connections that you are starting your own company, the typical response is “Good for you! I’m so jealous. I wish I could do that,” shortly followed by “Please let me know if there is anything I can do to help.”
The reality is, most people aren’t in a position to be helpful in growing your business. Either they don’t have the final say into a buying decision, or they have other close connections that already have their business, which they aren’t willing to disrupt. It doesn’t mean they are bad people. They just can’t help in ways you were hoping they could.
Be careful not to over rely on friends and family to help grow your business. They have their own challenges in their work life and it isn’t their job to help grow your company. While they will be with you in spirit, it can be a lonely road in the beginning when you start your business. Lean on friends and family for emotional support and encouragement, but don’t expect to have them help in a tangible financial way.