Most importantly it takes guts and lots of support. At the age of 38 with a wife and two young children to support, I am leaving a secure and stable employment to relocate half way across America, to the mid-west, to start a new company in one of the worst economic environments the world has known. Making this decision consumed a lot of thinking time and with this uncertain background, produced by the media, conventional thinking does not leave you in a sane place.
I have been looking for this opportunity to begin a new business for over 6 years now, I still do not have enough guts of my own to start this – and this is why I say you need lots of support. To give you an indication of the support I am using to get this off the ground:
Business Partner – I have a business partner that already has a very successful business in the same vertical that can provide operational expertise and contacts within the industry to minimize the lead generation and prospecting phase of starting out.
The partner approach allows for the lowering and distribution of start-up overheads, much like an Incubation start-up.
Laws, expectations, codes of conduct, processes that can take so much time to learn and often expensive when starting out, can be circumvented.
Financial – contrary to what you may think about business, it does not all center around the business plan, it centers around the execution. You can make all the sales in the world but if you cannot cash-flow the operation then you can never think about being profitable.
Most companies will need capital to start. I have acquired a reasonable amount of assets, which are valuable to me but they are not all seen equally valuable to my financiers. Start to think about what instruments you can use for financing before you want to begin your business.
What type of assets do you hold? – as that affects the ratio by which banks will offer/secure lines of credit.
What is your credit score? – what can you do to minimize the impact on your credit score leading up to opening your business.
What do you need to execute your operations – transport, utilities, insurance, offices, systems, subscriptions? They all send bills regularly and all expect payment regularly.
Industry Knowledge Partners – if you are like me and are wanting to start in a field in which you are not an expert, you will need knowledge experts that can guide you through the rapids in your journey. Look to building relationships with people such as:
Lawyers/ Regulatory Bodies
Customers (though customers do prefer to deal with experts so use this avenue selectively)
Personal Support – we all have our moments when we think we are the Lone Ranger and we can do it all on our own. As I have written about before, consider the impact one decision may have on other aspects of your life.
One such aspect is your family and close friends. This opportunity wasn’t an option until it became an opportunity for my family too – and I thank them for their support.
So yes it has still taken all the guts I have to make this exciting start, my sanity could be questionable and it sure was not due to conventional thinking that I was able to choose this – it is only possible to rationalize and make this choice because of the support and help that is in place.This article was contributed by Guy Ralfe, co-founder of Active Garage and co-author of the upcoming book ProjectManagementTweets. You can follow Guy on Twitter at gralfe.