Entrepreneurship

Use Buttons to LIKE & Share This with Friends!

Picture (Device Independent Bitmap) 1

Newsletter from
Steve Richardson & Company, Certified Public Accountants

September 1, 2015

Entrepreneurship

Starting a new business is a daunting and often life changing task.  To say difficult is to make an understatement.  The rewards are however significant!

The Problems First

My staff will tell you that I am an expert in talking people out of business ventures.  I can see the problems with their plans and budgets and I ask the really difficult questions. My philosophy is this: if I can talk you out of it, I’ve saved you a lot of grief.  If you listen to me and adapt to the problems I point out, well then, you may have a winner!  Adapt is a point we will discuss more below.

In 1978, I started a new business. It has proven to be successful (for which I am immensely grateful!). I started Steve Richardson and Company, Certified Public Accountants.  I will tell you in plain language, it was difficult.  If I had known going into this business venture just how difficult, I’m not sure that I would have had the courage to do it.  But I did; thank God, now!

At one point, I was ready to merge into a larger CPA Firm but a client and dear friend, now deceased, Mary Relfe, talked me out of it.  Having encouragement is very helpful.

Here is a look at my experience:

  1. You won’t make money right away.

Frankly, I have an advantage over most business start-ups.  As a CPA, I am a professional.  A professional, among other things, is a person who has most of what he needs to make money stuck between his ears.  It’s called intellectual capital.  I made a large investment of time, effort and money into these key capital assets.  That means that I did not need to invest in large amounts of equipment.

The reduced need for equipment and other assets means that I needed less money to open up a business. That’s a big deal; the number one problem of 99% of all business start-ups is being “under-capitalized”.

Even so, I was not able to draw a pay check from my own business for a year!  I had a young wife, a newborn baby and a mortgage to support.  I still have nightmares!  I biggest ace was my wife Jane who had total faith in me then and, thank God, she still does.

  1. Your personal life will suffer.

Without Jane’s faith in me, I would have given up.  As you can easily tell, I have a very high opinion of my wife; my commitment to her is unwavering.  This business venture was hard on our relationship.  No matter how committed you are to protecting and prioritizing your personal relationships, they will suffer as you invest large amounts of time and money into your business.  Long working hours are only part of the issue.  I was working nights and weekends, and bringing work home. Thinking about work instead of Her!  Well, I can tell you, it was not always pretty.

  1. Trying to juggle everything will take its toll on you.

We are human, not supermen or superwomen. As the CEO and Janitor of your new business enterprise, you will be working long hours and constantly changing hats.  This will take its toll on your mind and body.  The work is going to be fun, at times; at other times it will simply be grueling.

  1. Your emotions will get the better of you.

Your time, your money, your family and your health are all invested in your business start-up; you cannot escape the emotional implications.  You will overreact; you will be too happy when things go right and too depressed with the little failures that are inevitable.  Fear is real; can I make enough money, fast enough, to take care of my family?  Emotional decision making in business is almost always bad decision making but separating emotional decision making in your own small business is very nearly impossible.  The most successful small businesses are the ones that make the fewest emotional decisions.

  1. Nothing will happen the way you think it will.

A key to success is this: Adapt!  You need a well-researched budget and business plan.  A budget and business plan are essential to your success; but, nothing will happen as you envision.  Your plans are made of sand.  You will adapt or you will go out of business.  You will want to toss your budget and business plan in the trash – don’t!  Revise the budget, revisit it, restudy it and re-plan it.  Those who redo the budget constantly and recast the business plan have a much higher success rate than those entrepreneurs who simply toss the plan out!

  1. You’ll make decisions that will haunt you.

Your business will succeed or fail based entirely upon your decision making skills.  You will make difficult and stressful decisions often.  This is an inevitable truth: it is impossible to make good business decisions all the time.  You will make bad decisions.  You hope you make more good decisions than bad ones.

Even good decisions will often haunt you, especially the decisions to hire or fire staff and employees.

  1. You are going to fail.

You are going to fail! How could I get more negative?  But, it’s true; your entire company could go under.  Eighty-five percent (85%) of all business start-ups fail.  That is a fact.  Even if your company manages to stay in business there are other failures; some massive, some minor, but each failure will limit you and your vision of success.  Failure is an inescapable part of running a business.  How one adapts to failure (re-drafting the business plan) is a good indicator of future success.  Working through failure is an essential skill of any successful entrepreneur.  Your success depends upon it!

  1. Your Success is not about Luck

Being lucky is not going to keep you in business. It may help; but, staying in business is a combination of many factors. A few of these factors are: how well capitalized is your start-up enterprise, how good are the marketing projections in your business plan, how strong are your professional or technical skills, how good is your staff, can you consistently make good decisions, how well do you recover from mistakes and bad decisions, and, I admit to it, how lucky are you.

  1. A good business plan

A good business plan is essential to your success.  A good business plan is not based upon dreams or best case situations; it is based on the best facts you can find.  It is well researched and it includes a look at the key elements of success.  All your market and cash flow projections are based on the business plan.  Do not start a business, even a very small business, without a business plan.

  1. We can help

You should not do this alone.  You need a person, like your CPA, who is emotionally disinterested but is also deeply committed to your financial welfare to scrutinize this essential business document.

Sincerely

Steve Richardson, CPA

Use Buttons to LIKE & Share This with Friends!