This one might ruffle a few feathers.
Entrepreneurship is all the rage nowadays. I meet many employed executives, some who are very highly placed in C-Suite positions and they begin to tell me, excitedly, how they plan to start a business, jump out of corporate slavery and shake up a certain industry that they have their eyes on. I have become more and more cautious on the advice I give to such friends or acquaintances because after being an entrepreneur for close to 9 years’ full time after a brief employment stint, I’ve observed some mistakes and hard lessons that former corporate employees and particularly C-Suite executives make when they jump ship and begin to row their canoes. Here are the top 10:
- Expensive lifestyle
They maintain an expensive mortgage, going out to expensive restaurants, maintain the same expensive school for their kids that the corporate employer paid for, big cars that are fuel guzzlers, club memberships… until they begin to wipe out their account balances and savings and that is when reality hits home and they begin to reconsider some of the choices they make with their new circumstances.
- Expensive office kick-off
They get an expensive office in an expensive address, with hardwood furniture and with the underlying belief that this will impress clients. They top it off by hiring expensive employees because they came from an office which drummed in the mantra “always hire the best talent, even if it means paying a premium”. With time they realise a loyal hard worker with unimpressive qualifications and experience could be the best asset an entrepreneur has when starting out.
- Wrong Investments
They invest in a business, a tool, a software or a type of infrastructure that they don’t know how to use. Some do this with their generous pay out from their retirement and instantly go into a cash crunch. They go into a business they don’t understand. After all, after managing billions of shillings in a corporate organisation and a team of 100, what can be so hard about running a cake business, wedding planning, construction or growing tomatoes? Well, it turns out everything can get quite complicated. Each business has its rules, gatekeepers and cycles and figuring it all out can take a lifetime.
- Wrong expectations
They expect that their big company friends and colleagues whom they bid goodbye as they pursued their dream will give them business easily. Only to realise that their friends will have to justify to their CEO why they gave business to a “no-recognizable-name” company rather than a well-established brand. Sometimes they find the tendering hoops and due diligence processes that they set up before they left automatically disqualifies them from supplying their former employer despite an impeccable track record.
- Unrealistic expectations
They expect business to take off quickly since they are used to things moving at lightning speed in their former employer’s empire. They soon realise that the army of analysts, researchers, HR team, accountants and worker bees that their former employer attached to them, were the reason why they could do in 1 day what they now take 2 weeks to pull off. They also realise that their former employer’s name is the reason why people never let the phone ring twice, but now, they don’t even call back after sending the message that says “I’m in a meeting, I’ll call back.”
- Misplaced Confidence
They take for granted that a lot of their previous results had a lot to do with the brand they worked for and that they have to rebuild their personal credibility from scratch.
- Idealistic approach
They create idealistic products based on their experience and proceed to do an expensive idealistic launch with confetti, pyrotechnics and fireworks in an upmarket hotel. They go back to the office and wait for phone calls and after a few days realise that they have to knock doors and possibly even beg for deals.
- Undervaluing clients
Having come from companies with established brands where clients flocked to them, some carry this mentality to their hustles and end up taking customers for granted instead of killing themselves to deliver superior value to their clients. Clients do not care about who you worked with before, all they want is value for what they pay otherwise they vote with their feet (and refuse to sign your cheques).
- Expect compliance from clients and suppliers
They expect people to pay or supply on time, and get really baffled when it doesn’t happen. They also expect people to adhere to their strict contracts but only realise later that it happened in their blue chip company because they had attack dogs for lawyers on the company’s payroll and cannot afford those lawyers now. It’s only until they begin to default on their own bills, that they realise it’s a vicious cycle they have gotten into and they are now a vital part of the default chain. At this point the harsh judgement they previously had towards those that looked seemingly disorganised entrepreneur friends, mellows.
The reality of running a business will hit hard and what I’ve seen is that they end up giving up too early, possibly just before their business idea takes off. Granted, there are bills to pay and families to take care off, but seasoned entrepreneurs also go through the same challenges but find creative ways of surviving, overcoming the challenges and eventually thriving. Hanging in there a bit longer might make the difference between success and going back to your former boss. Knowing when to quit is a topic for another blog post.
I have to admit that it’s not always doom and gloom and people’s experiences will vary. I’ve watched a few people get lucky and their businesses take off quickly. However, these tend to be outliers. Entrepreneurship has a way of humbling people.
So what can you do to increase chances of success? Conserve cash religiously, take advantage of your networks, build a good product and brand, go into a business you understand and have expertise in and don’t despise small money or beginnings. Finally, be patient and surround yourself with veteran entrepreneurs and proven advisors who will keep encouraging you and helping you see that your problems are nothing compared to the nightmares they endured earlier. It helps.
Joram Mwinamo is a strategy and entrepreneurship consultant and founder of WYLDE International. Are you interested in a solution that can help your business grow? Contact Joram at [email protected] or visit http://www.wyldeinternational.com. You can interact with Joram on LinkedIn.
This article first appeared on InspiringGreatness001.