So you got a degree. Now it’s time to face the realities of running a business, including these lessons you didn’t learn in the classroom.
At the end of our first year in business I got on my knees and prayed to God for a sign: whether we should continue our business. Even though sales were coming in, we had zero profit to show for it. A week later, we closed a deal with a large airline to have our wines served on their international flights. Although we got the sign, there are certain other things I wish I would have known back then. I wish I would have known the real skills required to be an entrepreneur.
I’ve learned a lot in the past few years—and a lot of the necessary skills to start and run a fast-growing business just aren’t taught in the classroom. Here’s my list of five things school didn’t teach us about starting a business.
Starting your own business requires vast sacrifice. OK, I’m aware it’s cliché to say this. Everyone who writes about entrepreneurship says this. But I can’t emphasize this enough. No one can prepare you for the mental, physical, social, emotional, and spiritual stress starting a business will put on you. It’s an all-encompassing endeavor that will test you in ways that working a 9 to 5 will not. For us, it tested our relationship in ways that almost tore our young marriage apart. For example, in the past seven years of marriage we’ve had both the time and money to take one single vacation. During the first three years of marriage we rarely had time to date—you know, continue that courtship that led to marriage in the first place. We were performing the equivalent of the jobs of six people with two people, and that meant physically not having time to eat or sleep. It meant missing out on some of the little things that make a marriage successful. We had little time to develop our young marriage and we lost contact with both family and friends. As you consider pursuing an entrepreneurial venture, ask yourself if you can handle the personal sacrifice that comes with this venture.
Success rarely comes fast. People read stories about Facebook, Google, Youtube, LinkedIn, Amazon, and all the other expeditious rises from start-up to powerhouse, and think that success comes quickly. This is rarely the case. In fact, Amazon and LinkedIn took several years before they made a profit. In today’s world, particularly us Gen Y-ers have been trained to love—and expect—immediate gratification. We have DVR, iPads, Netflix and the like technologies all catered to give us what we want when we want it. Starting a business isn’t so fast or seamless. If you want to start a business and want it to be meaningful, be prepared for it to be something of a slow process. With the economy in the midst of a recession, getting the resources, both human and capital, may take a longer than you’re expecting. This doesn’t mean that the business will not be a success; this just means that you have to have some patience to realize that success.
You need to be prepared to shift gears. In starting our company we had a vision for what we wanted to accomplish with the company. We created an initial strategy that was e-commerce based. But this strategy also coincided with the downturn in the market, which saw our e-commerce sales drop by 50 percent. Not to mention within the wine industry as a whole, 70 percent of wine is consumed within six hours of purchase. My wife and I did not let this kill our business. Instead, we shifted strategies quickly and began to think outside of the box to assess which consumers would have the most pressing desire for our products. This led us to the airline and hospitality industry. Now 30 to 40 percent of our business is done in that area.
The real “sales secrets” can’t be taught. Whether you are selling a product or a service it is crucial that when you get in front of customers, clients, or consumers, you can close the sale. Only you cant teach someone all of the elements of closing a sale in a classroom. Being able to read people, or have the right charisma in front of a customer is something that can’t be taught. Thankfully for our company, this hasn’t been a struggle for us: Selena has an uncanny ability to sell in our company’s products. This clearly comes from her experience in sales and her passion for our business that shines through. I believe great salespeople share certain characteristics that go beyond teachable skills: they must like engaging and interacting with people. They must like being a problem solver. They must have an eye for creating mutual value between you and the client. If you don’t have those skills, it does not mean that you can’t sell well—it might just not come naturally to you. If that’s the case, hire or partner with someone who does. The value of a good salesperson is immeasurable early on.
Think big, even when you’re small. When starting the business we thought early on about how to quickly scale. We tried to gain national distribution rather than establish a solid footprint in one market. What we didn’t know is that it’s OK to start small and grow once you’re steady. The name of the game early in a business’s life is to generate sufficient cash flow to support the growth of the business. For businesses that are self-financed, or those in which the founders have significant skin in the game from a cash perspective, this is crucial to the longevity of the business. By pushing to scale your business fast, you place the business in a situation where it needs added investment and resources to grow that you may not have. This may result in you losing control, taking on partners that you would otherwise have not, have others empowered to impact your strategy in ways that are not aligned with your vision for the business. So, take your own pace.
I wish I would have known all these things back when we were starting out. Sure, these tips aren’t necessarily the most glamorous, but they are essential in determining whether you have the appetite to do what it takes to ensure a successful outcome in founding a business. There are no guarantees, but if you’re reading this article, you at least owe it to yourself to reflect and ask your self how you’d respond to being placed under the worst of all “what if” possible scenarios.