Time is a very safe investment to make, especially in something you really love. But money will get you into trouble when it's lost.
How can you tell what a wise amount of borrowing might be? Economist Kathryn Stafford, in an interview with The Wall Street Journal, reminds us that under capitalization is one of the three biggest mistakes an entrepreneur can make (the other two are underestimating the amount of work it takes to get a business going and failing to run the business like a business, through solid record-keeping and a combination of communications and marketing techniques). You must be realistic about what the financial needs will be to get the business going, having enough to not only develop the product or service, but also to sell it.
However, many see comfortable financing as the enemy. "I believe that, for the new and growing business, too much money is a greater problem than too little," says Paul Hawken. Gary Grappo agrees: "Too many get a grandiose idea, plop down $5,000 or $10,000 from Mom and Dad and fail to build a real foundation for their business because they have enough cash at the beginning to not worry. But those whose ship is in more danger of sinking at the outset learn more about how to stay afloat."
I'm with them: Following the same line of thinking as reducing grand ideas to first achievable steps, don't spend or even budget money for stuff you don't really need. Don't borrow money you can possibly live without and keep your overhead low. Everything you make will go to the bottom line.
Should I Work at Home?
This is one of the great debates of entrepreneurship for people who've never been in business for themselves. The answer is an unequivocal yes. But let me explain.
I feel strongly that in order to be successful in any self-directed career, you can't separate it entirely from your home life. If you seek to start a business of any kind and think you can "leave it at the office," you're either fooling yourself badly or lack the passion that will be necessary to succeed. It's natural, expected and in my view a requirement that at least some of your "space" at home be devoted to business planning and the myriad chores and activities that come with being self-directed. Put whatever limits on it you feel are necessary in order to recharge yourself for your work. Establish priorities for time with your family. But don't expect total separation of work and home.
Guess what? Knowing how to work at home is a blessing and may be a critical factor in helping you get off the ground effectively and inexpensively. Open a home office today, whether you intend to carry out all of your work there or not. If you can make that investment in time and money while you're otherwise employed, you will have already cleared a basic getting-started hurdle.
Gary Grappo says he's been able to launch several ventures for only a few hundred dollars each partly because he's well-set-up at home with computer and communication equipment, and doesn't have to make such an outlay part of every business plan he considers.
Also, remember our talk about transferability of skills at the beginning of this chapter? Consider these rather mundane but critical skills that are part of almost any business pay most for, which your accomplishments (not self-assessment) prove you can do?
- Your most impressive achievements. What have you actually done that demonstrates you'll perform the job (deliver the service or make the product) you want to be hired for (you're selling)? What achievements show you were outstanding in earlier and lesser positions (businesses)?
- You're most enthusiastic and prominent supporters. Who are the outstanding people in your field who know from first-hand experience that you're outstanding, and are willing to put their credibility behind you?
- The likeliest and strongest reasons not to hire (buy from) you. Why are you most likely to be turned down? What's likely to be held against you, correctly or incorrectly, fairly or unfairly? Only by identifying your vulnerability can you defend and launch a counteroffensive.
- What do you really want to do? If you want work you'll enjoy (your career will flourish when you find it), you'd better carefully consider what positions (enterprises), industries and companies (customers) would be best for you. And target your search toward them.
Note also the importance of the final question: What do you really want to do? Find a path with heart.
