Are you one of the millions who has recently started a business in the last three years?
Have you discovered that owning a business has not at all been what you hoped or thought it would be?
I know when I started my first business in 2003 I felt a lot of different emotions at one time.
There was a lot of excitement, fear, apprehension, courage, and raw tenacity. I had to learn to things I never dreamed I would have to learn; and through the years I’ve learned that there are just no shortcuts to success, profits, scaling or growth.
It required a sacrifice that I never thought I would have to pay.
It required rising to a challenge I never knew I would have to meet.
No one talks about the real issues of entrepreneurship when you go to college. The Small Business Administration isn’t equipped to prepare you for all of the nuances, challenges and adversity that comes with owning a business.
No one tells you the one thing that can tip the scales in your favor because they don’t know how to think outside of their traditional business plans and boxes they put themselves and others into.
But I know how and it didn’t come through academics.
It came through experiences, pain and failures; combined with a few successes, the willingness to read (a lot), learn and understand the big picture.
Why are So Many Turning to Entrepreneurship?
For nearly thirty years American’s have been sold on a brighter tomorrow. Jobs would be plentiful if we got an education and worked hard.
My grandparent’s generation had a phenomenal, stable life. They could be assured that if they were good workers they would have loyalty and long career with one company.
The Baby Boomer generation witnessed and experienced it as well for a short time. But loyalty in the 90’s waned by both companies and their workers and it has since become common for someone to have upwards of ten different jobs in their lifetimes, or more.
Millennials are learning that in the new world great jobs are scarce and their education will take a lifetime to pay back. They are threatened with the reality of artificial intelligence, cheap labor and political unrest.
As of today:
- 94 million people have either stopped looking for work or are underemployed according to the U.S. Labor Department.
- 46.7 million Americans are in poverty and 45 million are on food stamps.
- Corporations like Disney are importing foreign workers and replacing American workers at a fraction of the cost.
- The U.S. Government and big business are driving down labor participation through free trade agreements as well as through low wage immigration.
- Generally, the cost of business is getting more expensive thanks to higher taxes, regulations and health care.
- A college education is getting out of reach for many young people with higher and higher debt required to attend.
- College graduates are finding it harder and harder to find employment that will pay enough to pay for college and their basic living needs. Recent studies show more and more graduates are moving back home with their parents.
Now for the good news!
Many are turning back to entrepreneurship and small business ownership instead of hoping or waiting for jobs that may never exist at pay rates they can afford to live on.
The first two points above spell that out clearly. Over 25% of the entire U.S. population isn’t looking for work or is underemployed. How many of have known someone who was laid off for more than six months? How many of us know someone who is working two jobs just to make ends meet?
With fewer people able to rely on good jobs, more and more are starting businesses.
The majority of businesses that I work with are young companies between 1-4 years in business.
They are finding it to be hard, challenging, and full of sacrifices. Yet, they have a drive and determination to push through the adversity and figure out what it will take to become successful!
Here is what each one of them has shared with me that they universally have learned about business:
- It’s harder to make money than they thought it would be.
- There is a big difference between growth and profits.
- They know what they sell and why they think their consumers should buy but they don’t really know their consumers and their needs, wants or desires.
- They weren’t prepared for entrepreneurship academically or practically and business ownership is an on-the-job training 24/7/365.
- Barrier to entry was low and it was easy to start. Therefore competition is high and breaking through takes too long.
For the average business owner that is starting today, in my experience they are starting a business because it was something they were willing to sacrifice and risk because they had a dream. Let’s be honest, striking out on our own is a bit scary, unsettling and uncertain.
There isn’t going to be a guaranteed paycheck and it’s going to be tough for a while.
They are doing it because they can no longer find meaningful employment or they know the writing is on the wall in their corporate job.
So who are these new entrepreneurs?
- They are between 25-55 years of age.
- 62.9% are male and 37.1% are female*
- They tend to start later in life at an average age of 34.9 years of age**
- The highest rate of entrepreneurial activity in the US is in the 45 to 54 age bracket, with the 55 to 64 age bracket not far behind.***
- Only 33% are college graduates ****
Who are they in my opinion and what is their experience?
- They are used to a regular income and an eight hour workday (or more).
- They have been taught that success comes through degrees and having a good paying job.
- They have high debt and monthly bills to pay: mortgage, car loans, school loans….
- They have less than stellar credit reports.
- They are usually married and have a family.
- Extended family is telling them that the sacrifice isn’t worth it and that the new business owner should stop and go get a job.
- Money is a huge stress point and they need it yesterday and they need it fast now!
(Please, take a moment and share your entrepreneurial journey in the comments section below and share your story – be an encourager and let others know they are not alone!)
This brings me to the heart of what I have to say today.
Too many are starting businesses with the expectations that it has to make money for you now and it has to happen fast!
The sad truth is that it won’t.
They’ve been led to believe that if they start a business, build a website and participate on social media that we can make it. People will just come and give them money.
Unfortunately, it doesn’t work that way.
In the first year of business you can expect your income to very low or you may not make a take home income at all.
Every week I talk to people who are trapped by their financial limitations because of the business.
They feel stuck, frustrated, desperate, discouraged, and defeated that they have been in business for one year, or maybe three years, and aren’t making it.
But the truth is they probably are and may be measuring their success by the wrong metrics.
Let’s consider an average, successful businesses trajectory:
- Year one – Establishing message, marketing, sales and product delivery. Very few customers and little to no take home pay. Yet, many new connections, networks and opportunities.
- Year two– New ideas, products and business development comes through experiences and evaluation and re-evaluation of one’s message. Some sales start coming in and the business owner can start to pay themselves a small amount, still little or no profit on paper.
- Year three – You’ve become more established, recognized and approached. Sales start coming more frequently and easily. The message is branding the business and scaling has become a new topic of conversation. Profits are becoming more possible.
- Year four – You’ve become an industry or community leader/resource and profits are stable and growing and the business continues scaling and starts looking for new opportunities to grow.
Here is the problem; too many in year one want year four results.
When someone goes to work in an entry level position is it expected they will be paid at the same rate of someone with five years’ experience?
Of course not!
It’s no difference as a business owner. Your business will not make the same revenue in year one that it should in year four.
A Simple Plan to Help in the Beginning of Your Business
In the beginning you will have to decide, and your family if you have one, what level of sacrifice you’re willing to pay?
Today you won’t have what most will so that tomorrow you can have what most can’t dream of!
That means something different for every business owner and entrepreneur. The key here is to start dreaming and never stop!!!!!!
In addition, you have to have a plan in place to cover the costs of your personal living expenses like the mortgage or rent while you’re finding out how to get to the point that you can live your dreams.
You will want to think bare minimum. How much money do you need in order to live?
- Business necessities
You will have to run as lean as you possibly can. That may mean less entertainment expenses. So, find things you can do that are free. Believe me, I’ve learned over the years there are lots of things you can do that cost very little or nothing and you can learn to find joy in new things and experiences as well.
Don’t Waste Your Time on a Business Plan
Hum… everyone is telling you that’s the first thing you have to do. All the experts, bankers, the Small Business Administration…
I’m going to tell you that comes later. Business plans are only useful if you’re going for funding in my opinion but even then you still shouldn’t do it first.
There is a step you should do before it and that is learn “what business you are “really” in.”
You have to learn how to message your business.
That’s where someone like me comes in handy. I know, you probably saw that one coming, lol…
Here is the truth, your message defines how the world see’s, feels and experiences you.
Can you see how that is the foundation of a business plan? All the business planning in the world isn’t going to make you a sale or introduce you to your audience or make your marketing magical.
Your message will deeply inform your business plan.
Here is what I mean. When I work with a client we spend from 3 -8 weeks (depending on the client; average is 6 weeks) working through the following questions:
- What problems are you passionate about solving?
- What are the tangible values your customers experience after they’ve done business with you and how did they feel about the experience?
- What “specific” problems were solved through each, individual tangible value?
- Who do you “specifically” solve each problem for?
- How is your product or service “a” part of “a” solution?
The answers to these questions inform your entire business:
- Vision for the business
- Marketing strategies
- Marketing reach
- Sales projections
- Growth projections
- Scaling opportunities
All things that a great business plan has in it and yet it isn’t a business plan… it’s a roadmap that influences every thing you do inside your business.
But the other benefits are more important and more numerous:
- Clarity – you have it around your entire business
- Simplicity – you can easily see what to do and where to go
- Communication – that’s relevant and meaningful no matter who you are talking to or with
- Networking – Powerful, relevant and meaningful both online and offline
Your message is your brand and your brand is your message!
Use it, leverage it and always be open to developing it further as you grow.
There are no shortcuts to business success. The truth is it takes time to develop and grow a great business. There is no such thing as an overnight success.
I know it doesn’t seem like it, but almost 100% of the time businesses that look like overnight successes were in the planning phases for a long time; and they were in the execution of the plan for considerable time.
Even the fastest growing companies didn’t come out of nowhere.
Take Facebook for example; it started in 2003 at Harvard and let’s just say it wasn’t necessarily for a good reason. The point was to identify who was the “hottest” people on campus. (https://en.wikipedia.org/wiki/Facebook)
I’m sure glad that one evolved and changed. Aren’t you?
It took seven years before Facebook roared onto the scene as we knew of it in 2009 and 2010.
Here is the point and I’m going to say it again; it takes time!
You may be saying you don’t have time or that you’re running out of time.
Then you may have to:
- Get a part-time or full-time job
- Dip into your savings
- Your spouse may have to carry the burden of supporting the family
- Push past the negativity, criticism and hurt from those who feel they have your best intention at heart.
You will have decided, with your family, what the level of sacrifice is that you’re willing to pay.
As I said earlier, there will be sacrifices that must be made so that you can get what you want. There is a risk with starting a business and that is unavoidable.
You will learn to think very differently about life, work, finances, “things”, employment and relationships.
You will see life very differently from the world around you does who is telling you to “just get a job like a responsible person.”
But, who provided that job and what was their sacrifice for that “responsibility?”
The key to success is not found in a business plan, hard work alone or just aimlessly attending one online or offline event after another just hoping for a sale.
Success is not found in blogging or social media.
IT’S FOUND IN YOUR MESSAGE!
Most businesses skip developing their message completely because they either have never thought about it, think they are clever enough to do it on their own and waste a lot of time and resources trying, or they don’t think it’s important and don’t value it.
Yet, 80% of all businesses will fail within five years and of those 70% will do so within eighteen months.
Failure is almost always tied to a lack of message; and your message as I outlined above drives and dictates your:
- Marketing strategies
- Business strategies
- Product or service delivery
- Customer service
Miss this and you will struggle and likely fail.
How do I know this?
A recent IBM study came out and in it consumers by 80% said that businesses are not relevant to their needs, wants or desires.
So what good is your website, social media, video, networking or a business plan if you are not identifying with your audience relevantly with a compelling message?
As a business, isn’t that why you exist? To fulfill needs, wants and desires?
If you’re not messaging appropriately to them why should they buy from you? Why should they spend money with you over your competitor?
Why… why… why…
That is a messaging problem and it’s one that has to be solved for your business.
Do you want to learn more about messaging, statistics behind it and why it’s so important? If so, check out my “Begin Here” page for relevant information, videos and yes options to learn how I can help you.
If you want to learn right now how to discover your message and you don’t need more information, click here or on the image below and schedule a FREE, no-obligation, one-on-one time with me on my calendar to discuss your business and where you are at today. I would love to learn your story and about your business as well as offer a few practical tips and insights that you can use immediately.
Do you have a question, comment or idea you want to share? If so, leave it in the comment section below and let’s talk about it!