Lessons for Aspiring Entrepreneurs
The lessons below are taken directly from the book, The Agile Startup. In total, there are over 200 lessons that can help you turn your idea into a thriving business.BUY THE BOOKGet it on Amazon
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People like to think that there’s a typical entrepreneur personality. Yes, entrepreneurs are all passionate, good at selling, and diligent about follow-through. Beyond this, there’s no such thing as a typical entrepreneur. Entrepreneurs come in all shapes and sizes. Every now and then you’ll see a personality profile quiz that purports to help you understand whether you’ve got what it takes to become an entrepreneur. These profiles are pure, unadulterated BS. The personalities of successful entrepreneurs are all over the map, from neurotic and obsessive compulsive, to kind and easygoing. Your personality does not determine whether you should start a business. However, it does play a role in what kind of business you should start, and what kind of culture you will create. Don’t let a personality profile tell you that you don’t have what it takes. As long as you have the prerequisites of passion, salesmanship, and follow-through, then you have what it takes to build a business. There’s a place for everyone, so find your niche and pursue your dreams with everything you’ve got.
If you’re dying to start a business, but don’t have much experience, a franchise might be the way to go. Franchises are great because they are turnkey. They teach you everything you need to know to run the business, and help with everything from choosing a location to figuring out the right marketing mix. The franchisor has already figured out a winning formula that works, and you get the benefit of this knowledge when you sign on. Since you don’t have to reinvent the wheel, you will have fewer startup headaches, and can save a lot of time and capital. On top of all this, the franchise headquarters wants nothing more than to see you succeed. They make money when you make money. Plus, they have to show successes and failures to future franchisees, so their success rate is important. Instead of being on your own, you have a highly experienced team that you can call on for help or advice.
Franchises aren’t for everyone. Everything is already scripted, and you have to follow the franchisor’s directions down to a tee. If you march to the beat of your own drummer, then a franchise probably isn’t for you. But if you’re not sure where to start, or want guidance, a franchise could be a great option.
Aspiring entrepreneurs often ask how they can tell when it’s time to make the leap, quit their jobs, and really go for it. There are two indicators you can look for to know that “it’s time.” First, it’s time to get serious when you’re emotionally ready to make the leap. In a way, the emotional aspect is kind of like being in love. You know that you’ve struck upon the right idea . . . when you know. When this happens, you’ll have a gut feeling that this is “the one” and there’s no choice but to move forward.
Second, it’s time to go for it when you’re financially prepared. Starting a company takes time and capital, so you must have cash in the bank before you leave your job and eliminate your income. The general rule of thumb is that you should have at least 12 months of expenses in the bank (this includes both personal and business expenses). If you have a spouse and kids to support, your expenses will obviously be higher. Many bright entrepreneurs with promising ideas have failed unnecessarily because they didn’t have enough money to get the company off the ground.
It’s always debatable whether you should start out as a full-time or keep your job and work on your startup on the side. Starting a company in your spare time significantly reduces your risk and opportunity cost. But, if the deck weren’t already stacked against you, succeeding on a part-time basis is a lot more difficult than doing so full-time. When your company is a part-time project, your business will be hard to prioritize consistently, your competition will run circles around you, you’ll miss opportunities, and—most importantly—your back won’t be against the wall. If you have the stability of a full-time job, it’s much harder to get out of your comfort zone and do what it takes to get the job done.
It only makes sense to work on an idea part-time when you want to study its feasibility. When it becomes apparent that you have a winner on your hands, your best bet is to dive in headfirst. There’s just no way around it—you have to dedicate everything you’ve got to your startup. This is especially true for investors. If you want to be taken seriously, you have to be serious about your business. And that means quitting your job and building this business full-time.
A common way to get your startup going is to keep your full-time job, and be an entrepreneur on the side. This can be smart, or it can be incredibly stupid, depending on your current employer. When you first start a job, you sign a lot of contracts. If you read the fine print, you’ll see that the employer almost always retains intellectual property rights. This means that your employer might own the rights to your ideas—even those you think up in your spare time. In a moonlighting entrepreneur’s worst nightmare, it’s not inconceivable for your previous employer to sue you, claiming that it owns the rights to your invention or company. Annoyingly, they’ll usually come after you only after you’re successful and fought through the risk. Obviously, this is a situation that you want to avoid. Before you moonlight, ask a lawyer to read through your employment agreements. Make sure that you will own your company free and clear when you decide to take the leap. Even then, don’t use your employer’s resources to build your company. It can come back to bite you.