I learned many valuable lessons over the course of the 8 years that I owned my consulting business. Many were positive, a few were negative, but all were educational. These lessons shaped my perceptions about and approaches to business, and in general have served me well. This post will just be the first of many on the topic.
The lessons learned covered many topics: How to structure the business; Business Goals; Risk; Growth Initiatives and Investment; Employees and Benefits; Culture; Marketing and Selling; Hiring and Firing; Bringing in Experts; Partners and Contractors; The need to let go; Exit Strategies and more. In my case these were compounded by efforts to start a franchise for the consulting system we developed, and then our international expansion to the UK.
It’s amazing how more significant those lessons are (or at least feel) when the money is coming out of or going into “your pocket.” Similar decisions at larger companies are generally easier, and (unfortunately) often made without the same degree of due diligence. Having “skin in the game” does make a difference.
Businesses are usually started because someone is presented with a wonderful opportunity, or because they feel they have a great idea that will sell, or because they feel that they can make more money doing the same work on their own. Let me start by telling you that the last reason is usually the worst reason to start a business. There is a lot of work to running a business, a lot of risk, and many expenses that most people never consider.
I started my business because of a great opportunity. There were differences of opinion about growth at the small business I was working for at the time, and this provided me with the opportunity to move in a direction that I was more interested in (shift away from technical consulting and move towards business / management consulting). Luckily I had a customer (and now good friend) who believed in my potential and the value that I could bring to his business. He provided both the launching pad and safety net (via three month initial contract) that I needed to embark on this endeavor. The first lesson learned is to start a business for the right reasons.
More to come. And, if you have questions in the meantime just leave a comment and I will reply. Below are some of the statistics on Entrepreneurship that can be pretty enlightening: