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Things I wish I knew a year ago – The truth about becoming an entrepreneur

I founded 2 companies last October after Denver Startup Week. One failed and one is successful – learn from my many mistakes and hear my keys to success.  There are 3 parts

Part 1. How to pick the right company to start.

People struggle with coming up with an idea for a company and 90% of startups fail.  See how picking a business with the correct business model and profit margins that align with your passions can increase your chance for success.

Part 2. How to get customers – lessons learned in targeting and marketing

People assume that if they have a great product then customers will buy it.  They need to realize that customers need to know about their product before they can buy it.  Getting customers is hard and I made a lot of mistakes around choosing the wrong target customer and wasting advertising money.

Part 3. Opportunity cost, financial stress and the truth about becoming an entrepreneur

Becoming an entrepreneur is one of the most exciting experiences there is, but it is also really hard.  We hear about all of the success stories that help us to take the leap of faith and quit our corporate jobs, but after a few months the reality of paying bills and dipping into savings sets in.

Here is my draft article.  I am currently only 9 months into the year but I wanted to start listing out my lessons learned –

Lesson 5 – go for it

There is no time like right now and there will never be a perfect time.  If you are reading this and are on the fence then make a list of what it would take to get started.

The first few months of a startup are super exciting.  You have the opportunity to create something from nothing but a thought or idea.  Each many milestone feels awesome – getting a website up, getting your first client, and maybe even making a profit.  The lows are hard – trying everything humanly possible to get more clients, having a client give a bad review or having to tell a client that you can not provide them the services they want, and that sucking sound as your bank account gets lower each month as you pay your mortgage and credit cards.

All in all the last 6 months have been awesome – the opportunity to found 2 startups and to learn so much about marketing and how startups and a lot of business really work is awesome.  In my mind it was better learning than most of college or any other course you can take.

Lesson 6 – Make mistakes quickly and adjust and move on

Do free trials.  For both businesses I did a free trial for my first customer in exchange for being able to use them as a customer testimony.  It let me work out some issues such as out scheduler for EasyGlitz being on the wrong timezone and getting feedback on the purchase flow.

Analyze customer interactions.  Originally when we launched EasyGlitz we required customers to pay with a credit card to book an appointment.  We didn’t want customers canceling at the last minute after a stylists had driven out to someone’s house.    After a few months of not getting many bookings and thinking of how I could lower my cost to acquire a customer I looked at our booking software data and realized that over 60% of customers were getting to the last step of the checkout process and bailing because they did not want to pay with a credit card.  Once I realized this I quickly changed it and had customers pay at the time of the appointment.  By making this change we also had a few customers pay with a check, which saved us on credit card processing fees.

One other change we made is requiring people to have to book 24 hours in advance.  Originally we only required a 4 hour notice, which was usually doable…..except for the people that booked an 8am appointment at midnight the night before.  Needless to say there were some frantic mornings where we woke up to appointments that were nearly impossible to staff.

Get a minimum viable product and see if you can sell it.  For Finance Pals I launched as Heffner Consulting without a website and managed to get 3 clients by only updating my linked in profile and networking.  The idea changed from forecasts for business plans which people can complete for free to forecast help to get investors so that people could see the value in the service.  Even after 8 months and 5 clients I am still tweaking my pitch but the key was to launch as quickly as possible.

Lesson 7 – Consider working for a competitor or getting a full time job while your business grows

IT takes a long time for your business to grow and time in most cases means loss of your money.  I see a lot or financials of companies and most are not cash flow positive even after 5 or 10 years.  I think that most people think the answer to this is to spend half or more of their time on getting funding and a lot are unsuccessful at getting funding.

  1. Have a good financial support network. Either through a spouse or savings. The first month you will be ok not making any money and spending it on the business.  By month 3-6 of not making any money and credit card bills, mortgages, etc piling up you will need to have a good plan in place.
  2. Work for a competitor. I remember talking to multiple people and telling them what I do and the ones who knew startups and the industry well would always say – “oh do you know XXX, he does what you do to”. At first I was always a little disappointed that they already knew somebody that did what I did.  Then one day I was talking to one of my customers and they said that if they could do it all over again then they would have gone to work for a competitor when they were first starting out.  It solves two huge problems – 1 you get paid some money while your business is growing and 2- you will probably learn some things about what they do to operate successfully .  For a good month I thought the risk of them knowing about my business or worrying that they would not hire me because I was a competitor was huge.

One day I looked at my pipeline of potential new clients and thought about what upcoming work I had for the month and I knew that this would be the first month that my company would not grow, so I nervously sent out some emails.   I was 100% honest about my intentions and my experience and I heard back from 3 / 4 of my competitors.  I talked to 1 competitor and he encouraged me to talk to more competitors.  I talked to another competitor and found out that they liked doing the accounting work because it had greater realibabilyt in recurring revenue and I liked doing the finance work because it was more interesting.  We are still talking working on partnerships.

  1. Consider a side business – A lot of great businesses have started as side businesses.  Google it and you will see.  I will try to list some examples here eventually.

Lesson 8 – Prioritize your time and leave some tasks undone.

It is really hard when you have worked on ad campaign all day and you are so close to finishing and then some user / computer error occurs and it takes another 2 hours to get the picture to be the right size or to have a border.  My wife still using EasyGlitz as adjective for spending too much time working – “don’t EasyGlitz me again”.  The tipping point when had a list of about 20 to do’s and prioritized to do 1.  Then I added more and eventually decided that I wasn’t going to do any of the items on the list because I wanted to focus my time on Finance Pals.

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