The Index of "Why Didn`t They Tell Me?"

st8icst8ic subscriber Posts: 11
edited October 2008 in Business Planning












Preface

There`s nothing like advice from people who have been there! There is certainly
a lot of advice floating around these boards. What I want to do is have one
centralized thread to sort of index the best of it. Please please please, if
there is a piece of experience that you have that is missing from here, add it
in a reply!Banks don`t like you as much as you think.Banks don`t care very much about your business plan or your projections.
They care about your personal credit (it`s on the line because you have no
business credit yet), and the assets that you can put up as collateral. It`s
the same as any other type of loan. If they do happen to give you a credit line
or a loan, because you`re a high risk, you`re going to get a high interest
rate.
Angels are rare.Unless you have a rich uncle or lots of personal connections, you probably aren`t
going to find a stranger with $250,000 to give you. Sites like the Go Big
Network are useless because they are full of agents and no real investors.


The Law of 2x.

Everything you do will take twice as long and cost twice as
much as you had expected.


You will fail.
Deadlines will be missed, checks will bounce and you will be
rejected.


This does NOT mean
that YOU are a failure.


Everyone has failed at one time or another. It doesn’t mean
that you or your business model is a failure. One of the partners in Second Cup
Coffee was once homeless, now his company hauls in $23 million a year.


Keep your day job.
I know a lot of people who made the mistake of jumping ship too early. I
did it myself. This goes back to The Law of 2x. I predicted that I would have
clients in my second month, but it took me six months to become grounded enough
to accept clients.



Credit is fragile.

It only takes a few late invoices before you start losing credit
references.




It really is about who
you know.


Relevant personal connections are possibly your most important tool and you
can’t buy them. You have to earn them.





Subcontract.




It isn’t below you to subcontract for larger companies in your field. I know a
guy who owns a courier business and he was barely breaking even with his own
clients. He now exclusively subcontracts for a larger courier and he makes
$150,000 a year.





You won’t always be
busy.




The archetypical entrepreneur works 25 hour days and 8 day
weeks. This certainly isn’t always the case. As a matter of fact, you may find
yourself bored at times.
st8ic10/31/2008 3:11 PM

Comments

  • robertjrobertj Tampa Bay, Floridasubscriber Posts: 0 Member
    st8ic,
    Some interesting thoughts - even if a bit "jaded" in spots.
    I`d just like to comment on a couple of your points.
     

    Banks - It`s really not about like or dislike. Banks are what they are. Their lending business operates on a fairly narrow margin - so they can`t "afford" very many problems. We`ve all just witnessed what happens when they get "aggressive" and don`t have sufficient collateral to secure their loans.
     

    Angels:  There are a LOT more people with the means to provide support to a private company than you think. Unfortunately, most do not wear signs or otherwise identify themselves to the general public. I agree that people rarely invest in a "total" strangers company.
  • st8icst8ic subscriber Posts: 11
    thanks robert and chris, your input is really appreciated. I especially agree with being as nice as possible. If you`re not sure, hire a bookkeeper.
    It may save you money now to do your own books, but if you aren`t experienced then you may end up paying your accountant hundreds or even thousands to correct your mistakes at year end.Look big, act small.
    Putting up a large corporate image has its benefits. You need to appear as reliable as possible, while still operating and growing within your budget.
    Look before you leap.
    Market research is a very important step. Don`t just assume the market is there for you, ask around about it.
  • CreativeTopicsCreativeTopics subscriber Posts: 0
    Just because you can, doesn`t mean you should:I`ve noticed a lot of people starting out (mainly with online services, or something similar) start by underselling their competition.  While I promote this idea for new customers (discounts to new clients, trial editions, that sort of thing) you need to remember, if you want to make more money you can`t keep underselling the competition.
    You need to make a better product/service, so you can make a better paycheck.
  • patentandtrademarkpatentandtrademark subscriber Posts: 103
    Identify and register your trademarks and other forms of intellectual property.  Your name and commercial identity are priceless.
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