Business Leaders Aren’t Born — They’re Made. Here’s How to Start Your Entrepreneurial Journey.

by Peter Bravo Online Marketing

You know that most new businesses fail during the first few years. You’re just betting that your new business is different. Will that bet pay off?

Maybe, maybe not. Some of this is out of your hands. Call it luck, or bad timing, or “macro” — forces much larger than you and your little company that could conspire to wipe out your investment.

But you can do a lot to tilt the odds — or whatever you call them — in your favor. A lot of this work has to be done early on, though, perhaps before your business has earned its first dollar.

Follow these guidelines as you begin your entrepreneurial journey.

1. Don’t Scale Before You’re Ready

Resist the temptation to get too big too fast. This is easier said than done when you have a great product and hungry investors, but it might as well be the golden rule of startups.

You can’t undo the unwanted effects of rapid growth, even if your company has to right-size (voluntarily or otherwise).

Take inspiration from the story of Steve Streit, who started the pioneering fintech Green Dot at his kitchen table and scaled it into a billion-dollar business.

Streit was careful not to scale Green Dot before it was ready — in fact, he methodically built the business and forged partnerships with retailers before it became the name brand and unicorn that it is today.

But the slow-and-steady approach paid off; Green Dot is now one of the biggest names in fintech.

2. Bootstrap as Long as You Can…

Relatedly, self-fund as long as you possibly can. This is also easier said than done because it means raiding your savings, slashing your discretionary spending, and possibly borrowing against your home or retirement accounts.

It’s scary, which is why starting a company is not for the risk-averse. But it’s also better than the alternative, which is giving early investors a much bigger stake in your company than they deserve or saddling yourself with debt on very lender-friendly terms.

3. Then Turn to Friends and Family (Carefully)

You can’t self-fund forever. When the breaking point comes, tap friends and family first. You’ll get better terms from them than from profit-hungry investors.

Do it carefully though. Failing to pay back a loan from a close friend or relative could sour the relationship for years, maybe permanently. You — and they — should treat the arrangement like any other borrower-lender relationship.

4. Protect Your IP ASAP

Applying for a trademark is annoying and time-consuming, but it’s absolutely worth it.

And if you have a complicated product — something more than a brand name and a logo — you’ll want to apply for a patent as well.

IP theft is a multibillion-dollar business, and once you’re undercut by a competitor, the damage is impossible to undo.

5. Don’t Try to Do Everything Yourself

Good entrepreneurs hustle. Great entrepreneurs delegate. (And hustle too.)

Even before you’re ready to scale, you’ll have more to do than you can possibly get done in the course of your day. No matter how long you spend at your desk.

So get comfortable delegating: farming out lower-value tasks for sure, and also any higher-value tasks that you’re not good at or really don’t enjoy.

Delegating burns cash, of course, but that’s par for the entrepreneurship course. You have to be willing to reinvest capital in your growing enterprise.

No One Said It Would Be Easy

Starting a business might not be the hardest thing you ever do in your life, but it’s up there.

This is a multi-year investment with no certainty of paying off — and a good chance that you’ll never recover your investment, period.

Still, you’ll have a better chance of success if you follow these guidelines early on and stay on track as you grow.

Do your best and you’ll at least be able to say you gave it all you could.