In 2005, I wrote my first blog post on an unknown personal finance blog that would eventually grow beyond my wildest dreams. A few years later I would quit my comfortable stable job in the defense industry to work on a “blog” full-time.
In the ten+ years since, there are a few things I wished I knew. While I wouldn't change anything in the last decade, a few of these lessons would've made the ride a little less of an emotional roller coaster and more of an exhilarating rocket ship ride. 🙂
1. It's hard. Really hard.
Like Sisyphus pushing that boulder up hill, running your own business is hard. There are a lot of three steps forward, two steps back type of situations… and some zero steps throw in for good measure. Sometimes that boulder doesn't budge an inch.
And you spend a lot of time on the brink. Sometimes it's a financial brink, sometimes it's an emotional one, but you end up living on that edge. If you're doing well and hiring, you run into cash flow problems since employees get paid every week and vendors only pay you after 30 or 60 days.
When you talk about it with other people, you'll share the good stuff because no one likes to hear the bad stuff and there's no fun in reliving the challenges, especially the emotional ones that sound silly when you say it out loud. The only people who understand those are those folks in your industry.
The solution: Find other business owners you can talk to, preferably in a variety of businesses. Build your own community or find one to join, it'll help your sanity in ways you can't imagine. If nothing else, find at least one person in a similar situation you can talk to. Just one will change your entire outlook.
2. It's lonely.
There's no foxhole mentality like you have with a regular job. Whether you're tapping away in an office, pouring drinks at a bar, or packing crates in a warehouse, there's a sense of community. You're in it together.
When it's you're business, it gets pretty lonely. You have a lot of responsibility and it's yours alone. It helps if you have co-founders or business partners, but even then the buck will stop with one person and that person will carry that burden alone.
You combine that with the difficulty of the task and it's easy to see why so many businesses fail.
The solution: The solution to this is the same as before — find at least one other business owner you can relate to and, if nothing else, be able to safely vent to. 🙂
3. Growth is bumpy. Very bumpy.
When I look back on the growth of my businesses, it looks so smooth. Each month is higher than the last month.
Dig deeper and the daily numbers jump all over the place. Sometimes one month is saved because of a single good day of sales. One day out of thirty made the month. Or one month out of the year made the year. The month looked great and the year looked great because of a single day! (then there's the pressure of having to repeat next year so your year over year results are increasing!)
Whether you measure growth by revenue, traffic, or some other measure – realize that it'll be bumpy.
The solution: Once you realize that life isn't this smooth curve that goes up and to the right, you give yourself permission to not freak out when it just goes to the right like a Geiger counter. You take that bias out of your thinking and now you can stop beating yourself up because you didn't make progress. Progress is messy, especially if you look at the numbers!
4. Your friends & family won't be customers.
There are no free lunches in life. Your friends and family will want to support you, sometimes financially by being customers, but you shouldn't count on them day in and day out. It's not that they don't love you or they don't support you, it's that they have lives too and their job isn't to keep you in business.
In the beginning, I joked that the only people that went to my website were me at home, my girlfriend (now lovely wife!), and me at work. My friends asked about it and said they visited, but I knew they didn't. And at first it bothered me a little… until I realized there are no free lunches. If I want them to visit, I have to give them a good reason to. I don't get a free pass just because we're friends.
Nowadays, I enjoy getting the occasional email from a friend who said they saw something I wrote because it popped up on a Google search or on social media.
The solution: You cannot assume that your friends and family will remember but even if they did, it's not like their patronage alone would sustain your business. Make a business that demands their attention and not only will you get it, your business will thrive because of it. And you won't be upset at them for something as stupid as this.
5. Find something to fuel your drive.
When I first started, I told my friends all about it. One of them would ask me, every time I saw him, how it was doing. It wasn't a friendly “things going well?” type of ask, it was a “heh, how's the blog doing, making any money yet?”
I remember the last time it happened too, like it was yesterday, and whenever I feel down on myself because things around going as well as I'd like — I think back to that moment. It's like Popeye squeezing that can and getting his spinach, I'm ready to push even harder.
We all have this fire in our belly to do more, it's why you may have started a business, but sometimes the challenges of the work dims the light. Keep motivation at the ready to get it roaring again.
6. There's a safety net. But it sucks.
You may think that there's no safety net when you start a business, but there is. It's called going back to work. It's not a good safety net, because it's really hard once you are on your own to go back to reporting to someone else, but it's there.
And while your friends and family won't automatically become visitors and customers, they will be there to pick you up if you happen to fall.
This means that you can afford to take calculated risks. Don't play it conservatively, especially in the beginning when you're trying to make a name for yourself, and be willing to try things that are outside your comfort zone.
6. Reinvest in the business.
Your goal with your business should be to grow it to a size and then sell it. To that end, you should be trying to grow it as much as possible in the ways that will appeal to a future financial or strategic buyer. Reinvesting your profits back into the business is the best way to grow it.
Do not conflate business income with your personal income (beyond your salary). Remember, capital gains tax is much much lower than ordinary income tax so if you can grow your business to a point where you sell it, and get a balloon payment at the end rather than a regularly constant drip, you win.
7. Pay attention to the numbers.
Numbers will tell you everything. If you want to understand a business, ask for the numbers.
How much does it cost to get a customer? How much is that customer worth to the business? If the cost is greater than the worth, you have yourself a problem. If the cost is less than the worth, you need to invest in ways to get more customers!
If you don't know those numbers, you're in big trouble.
And don't be afraid of the numbers. If you're one of those people who says “I'm not good with numbers.” then you need to save yourself some heartache and not try to run your own business. Or get better at it and the only way to get better is by running towards them and not away.
8. Celebrate little victories.
A business is a grind. It's a lot of the same thing over and over again, even if you focus on innovating, and, especially in the beginning, the little victories will be few and far between. Sometimes it'll be a good financial day, sometimes it'll be a good PR day, and sometimes it'll just be a customer telling you that you're business is awesome or that you helped improve their life in a small but meaningful way.
As your business grows, the victories become relatively bigger, more frequent, and hopefully you reach an escape velocity where things start to soar. But to reach that point you have to continue grinding onward and upward, celebrating those little victories so you remain emotionally invested.
With my first blog, it took nearly 7 months before I earned enough advertising money from Google to have them cut me a check ($100 payment threshold). And that was only because I was featured in the New York Times and received a nice flood of traffic.
Financially, not a big deal… but I celebrated the crap out of that little victory.
9. You need to know when to quit.
Know when to hold em, know when to fold em, know when to walk away… this is the hardest decision to make. After pouring all your time, energy, sweat, blood and tears into a business, there comes a time when you have to say goodbye. Maybe you're fortunate and it's a sale, so the business is replaced with a pile of money (still sad, but something positive came of it). Maybe you're not and you have to shut it down.
How you reach that decision emotionally will vary from person to person but usually if you are no longer passionate and energized about the business, it's time to shut it down. You can be dispassionate at a 9-to-5 without the risk and sacrifice!
Sometimes the decision will be made for you, financially, and those are often easier to take because there's not much ambiguity. If you don't have the money and can't get more, it's time to shut the doors.
10. Have fun.
I originally had #9 as the final thing but I didn't want to leave on a down note! So here's the last one.
It's hard to celebrate little victories and have fun while you're in the trenches. When you have your head down and you're working hard, taking a break and having a little fun seems counterproductive. Why take a vacation when I need to keep pushing?
But those vacations keep you sane. Those breaks give you the opportunity to think about your business instead of just grinding away and working in your business. When you're sitting on the beach or hanging out in a cafe, the down time will give you a chance to re-energize, re-focus, and think about your business. You'll realize a lot of things because much like how you can think of solutions to a problem while you're in the shower, your brain will keep working on the problems while you relax. 🙂
Good luck and if you ever need a friend to talk about business, let me know!