Most of my friends dream of escaping the rat race. One of the most popular options is to build their own startup company. Most people will take part in part-time schemes like trading in futures, or doing a side gig. We have done all these, hoping that our very “own business” will bring us nearer to our goal of financial freedom.
Truth be told, none of my university friends were interested in a startup company life when we graduated. We wanted to climb the corporate ladder. Me especially. I was so mesmerized with movies with the corporate theme like Wall Street, that I looked forward to being a corporate raider. The lone wolf that won’t hesitate to take over another firm in a hostile takeover. I knew I am built for this.
However, life always takes a detour. One of my friend, who was in pharmaceutical sales, took a career gamble, and ended up becoming a top sales in the insurance line. In fact, many of my buddies come out to start their own new startup in their mid-forties. We have a food manufacturer, a corporate trainer, a restaurant owner, an owner of an online business, a master franchisee of a chain of Subway outlet, and what have you.
Amidst all the success stories, are you prepared to own a startup company?
1. Are You Ready To Risk Your OWn Money?
Put it in another way, are you an entrepreneur or are you simply, entrepreneurial? There are vast differences between these two individuals.
Being entrepreneurial means, you act, just act like an entrepreneur in front of your colleagues. You could be the CEO, the COO, the GM or the Marketing Director of a large corporate setting. You put in a budget of a Million Dollar for next year because you want to set up a new e-commerce platform to showcase your company’s product on the internet. But you needn’t risk a dime because you are comfortable being entrepreneurial. Give a 5 year plan and move on to the next job by the third year.
An entrepreneur uses either his own money or his creditworthiness to secure funding for his startup company. You can’t just walk away if your venture fails because like it or not, the debt belongs to you. But the fact is, most of the business owners take a calculated risk when they invest. We invest, we don’t gamble.
2. Market Uncertainties
When you are living in the new startup life, you won’t be sipping pina colada by the beach…at all. Jeff Bezos founded Amazon in 1994, and it was officially in the red until 2009. What makes you think that you would have it different from the founder of the biggest e-commerce business in the world?
Living a new startup’ life is crazy. Well, you might think that your training with that mad micromanaging boss would have prepared you for the startup adventure. It’s different. When you are working for others for a good income, your only worry is about your pain point. Your boss perhaps. I had my fair share of difficult bosses and yeah, I can relate to that. But once you are the boss, your “paradigm” shifts. This time, your ability to generate income might just be your new pain point.
You want to know uncertainty, try selling insurance. You could be talking to a potential customer yesterday, who was literary dying to sign the premium contract that you proposed. When you approach him today, he turns into a cold and uninterested carcass. As in other businesses, even when you have found yourself, regular customers, you will come across “dry” seasons. My client told me once, “How can I not worry. I have overheads to feed!” All industries are cyclical in their own rhythm. Therefore, know your own market’s down season and make sure you plan your holidays during these periods.
3. Persevere Even When There Is No Breakthrough
This is the hard part. My own trading business is doing good, after a short lull in the first year. Thank God, His provision is growing right now. However, I could talk a bit about this in my online “hobby” in this blog.
The moment I’m writing this, this blog averages about two unique users per day. Every time I put out a new post, the traffic might jump slightly to 10 uniques, maybe less. No thanks to Google’s punishing probation period for websites ranking. Am I perturbed? You bet I am. It’s coming to 4 months and every day when I check my Google Analytics, the stats are a tad disappointing. This is one of the reasons that I started this blog. I really want to remind myself about the experience of waiting.
There are two analogies in starting a startup company. The first analogy compares a new startup to working out in the gym. You might work out diligently, and unless you are taking steroids, you really don’t see much progress for months. You might be aching all over after the fourth month but, the mirror doesn’t show much (Google Analytics??). But deep down something is happening. Your muscle is repairing itself every time when they ache, and your bone becoming denser from the resistance training. Slowly, if you persist long enough, your girlfriend might just give you a compliment about your new six-pack.
Another analogy is from me. Working on a new startup business could also be like putting hair tonic on a bald scalp. After years of application, nothing happens. As a former employee with a fixed paycheck, are you mentally prepared when your “hair tonic” fails?
4. You Realize That Your Own Business Model Is Broken After A Few Years
This could be far worse than “the hair tonic not making hair growth” above. Imagine yourself in this situation.
I know a former colleague who used to be a sales supervisor in the FMCG industry. He started a mini market with two partners about a decade ago, and for a while, all of us thought that he was doing extremely well. From one mini-market, they grew to a chain of four to five premises at different locations, servicing the Malay heartland in Malaysia. And guess what? When I met him last year, he told me that he had given up on his business and should be going back to working for an employer again. Now, what went wrong?
The grocery business is a razor-thin margin business. Suppliers will usually extend a 20 % margin, the difference between what they offer and the selling price as recommended. Popular brands like Nestle, Gillette may offer a lower profit margin, hovering around 15 % to 18 %. Some even less. Imagine the inventories my friend and company needed to put up in order for their retail to be presentable. I don’t know how much they have to pay to cover their overhead, but the nature of this business is such. You can’t afford to overspend. If you want to live a luxury lifestyle, you need to have more retails. In order to keep the business rolling, as the musical chair, my friend resorted to doing delivery. Imagine husband and wife taking care of both retail and delivery of God knows how many medium-size mini-marts in one go!
My friend’s predicament can happen to you too. The situation could be worse if each partner carries their own agenda on the way the business to be run.
5. When Business Partners Become Your Worst Nightmare
I observe this all the time. People love to be passengers. When you announce an intention to start your own business, many would love to hitch a hike. Friends and relative would voice their intention to invest in your new startup company, hoping to be a part of a possible success story. To those of you who are already in your own business, how many times have you had that urge to invite your best friend to join you in the startup life? I have my moments too because life as a new startup owner is lonely.
Remember the guy who started a chain of mini-marts? There were three to four partners when they started. And what happened when the going got tough? All the partners left. Nightmarish partners come in all forms and sizes, regardless whether they have any business experience or none. Their true colors usually surface when problems plague the business. There were also cases when the partners themselves were the cause of the business downfall. These usually transpired when partners have different aspiration about starting a new project, like a real story of a pair of uncle and nephew.
Simon, the former owner of a medium size manufacturing business “conspired” with his uncle to take over a stake of another partner to make it an uncle and nephew team. Everything was well and dandy, with Simon taking charge of the business operation and his uncle, taking care of the latter’s own metal ore business. Sadly, good time seldom last when the world’s commodity market came crashing down in 2008. The uncle kept coming to Simon for cash to inject into the failing metal ore business until Simon thought enough was enough! They broke their partnership and sold the profitable business to a third party, who later hired me as the general manager of the manufacturing business.
6. Being A Startup Owner Ain’t Glamorous
When yours truly was working for others, usually, I had a tie on. Occasionally, I would be in my suit if I attended board meetings or conference. Now, I’m mostly in my t-shirt and jeans. Customers who used to see me in my best clothes now see me carrying cartons upon cartons of ingredients into their premise alone. If I’m lucky, my son will help me during his school holiday. Even my wife was not used to seeing me going to work on my t-shirt initially. Gone was the handsome guy of the yesteryears.
When your startup company is new, never hesitate to do your own business alone. No salesman will sell better than you and as you progress, no deliveryman will carry the goods faster than you. People will call you crazy and names like a control freak or small timer mentality. If you give in to these name calling, you will risk compromising your profit to look glamorous. To look like a real boss, just to say. But let me ask you, why are you in business? If your motive is just to look good, you do you really think your startup company will sustain? I am in business to make profits, not to have an easy life. Period.
7. The Intense Urge To Go Back To Employment
This is too real for human beings who have been working under a slave master for two decades. I still scour the job directories from time to time for opportunities that match my credentials. It’s like a fix.
Years of following various companies’ SOPs have taken a toll on our mind. The false security of coming under a leash is ingrained deeply in our soul. A few of my friends went back to work despite having started their own venture, delegating their startup company to their wives. Frankly, I might resort to doing the same because, during the infancy of my new trading business, I received two lucrative offers from two different companies. However, unlike my friends, I do not have the privilege to delegate my own business to someone else. If I took the jobs, I would have to give up the startup company. When we have asked God to take charge, He will work in such that, it’s either His way or the highway.
Recall how God bless me with my current business I trust in God. When I wanted to give up and take the easy way out, I will meditate in this:
Go, assemble the elders of Israel and say to them, ‘The LORD, the God of your fathers, the God of Abraham, Isaac, and Jacob, has appeared to me and said: I have surely attended to you and have seen what has been done to you in Egypt.
And I have promised to bring you up out of your affliction in Egypt, into the land of the Canaanites, Hittites, Amorites, Perizzites, Hivites, and Jebusites— a land flowing with milk and honey.’
You will experience a kind of withdrawal syndrome, similar to the kind when you try to cut yourself off from your smartphone. I feel guilty for almost a year when I see my wife going to work while I get to continue my deep slumber.
8. Many Fail Self Discipline
After all said, you gotta ask yourself this. Now you have achieved a new kind of freedom, where you are the Star or the Sun (read entrepreneurial journey), are you disciplined enough to walk this journey alone? You need not to punch card, and there ain’t a boss to breathe down your neck no more. Are you a wolf or do you prefer to go back to being a doggie ?!
I thank God for my His new freedom for me and yet, due to my appreciation for His provision, I have to work when I need to. When sales are slow, I must go out to look for a new account or to follow up on existing customers. Who knows, my absence might have given my competitor a chance to gnaw at my fruits. Rest and be diligent in your “farm” at the same time.
I have written quite a long post for this topic. To my fellow business owners and entrepreneur wannabe, feel free to leave a comment about your thoughts. Will love to hear from you!