Advice To A Novice Entrepreneur Part 1: Trust Not Yourself Alone

I have yet to have any success in my businesses as far as turning a profit goes, but I have learned a whole lot about what mistakes not to repeat. Learning by doing, as long as you do not repeat your errors as a madman, is a great way to learn. There is nothing better than adversity to teach you about your limits, and you will likely be surprised at how much you can endure if you have a north star. The challenging but rewarding road always starts right at the beginning, your first steps. So let's begin there right at the beginning.

I can see clearly that, most often than not, I have been the murderer of my own small business. This is the norm for most of us novice entrepreneurs. We often err on either or both of these aspects: setting ourselves as the ceiling that limits growth and/or choosing to invest our time in an idea with no future hope of scaling. In this blog, we will deal with the first one.

Advice #1: Trust Not Yourself Alone

No formula will help you to know if you are ready to start your own business. However, being aware of your limitations and getting yourself surrounded by a great team will help you to accomplish more by being focused on what matters. This is critical during specific seasons of your business. This alone can define your success or failure. Here are some key points to note about what kind of people you want near you.

A Mentor

Get a mentor or a group of business people and entrepreneurs if possible. Run your ideas with them. You make the decisions, but ask them to question and challenge you. It will help you to navigate this long road more confidently if you have people who have walked it before as your sounding board.

"You can make do without a co-founder. You can survive for a while without a team. But you can't make it without a mentor." Tony Fadell, Built.

Not everyone has mentors, but most successful people do. I am personally impressed by Mark Cuban as an entrepreneur; shockingly though, in an interview with Inc. magazine, he commented on why he does not have any mentors. However, he indicated he has people he admires and wants to see what they have done successfully and hear from them. In short, to me, that still counts as a mentor.

A Co-Founder

I like the idea of doing it all by myself, and I want to have control over essential and life-changing decisions. But along the way of creating a company from zero, you realize that it is very lonely, and you will feel the need to share that dream, work, and success with someone that cares as much as you do for the success of this new business.

I have been privileged to have run multiple businesses with my brother. It has pros and cons, but I can assure you there is about nothing that can solidify your relationship with a friend or family like doing a business for many years. A business partner is like a spouse in a marriage, so you want to choose well and be ready to be shaped and challenged by each other.

Communication is critical, and you want to be able to speak your mind and know that the other person always understands that your feedback is backed by a common goal and good intentions. Even when they may hurt. Effective communication is a two-way street, you want to hear and be heard, and each one is an art in itself. We will dive into that in another post.

An Accountant

Undoubtedly in business, you need a good accountant. A good one is worth his or her weight in gold, and you could save much money avoiding rookies' mistakes if you have a great one. An accountant helps you to report your financial record, bookkeeping, and tax management to stakeholders, especially the government.

In the beginning, you should do your own books. Becoming familiar with every penny spent and every profit made will make a big difference in your decision-making and sales processes. The idea is not to delegate this fundamental task initially but to learn how your company runs, how to have a good record of your finances, and explain them to any possible stakeholder.

You want someone who can ensure you do things right from the beginning. Sometimes you may be required by law to use a CPA (Certified Public Accountant) to submit or review your books for tax purposes. Check your local laws to see what is required in your country, state, or province. (Guess what? A good accountant will be able to tell you that!)

You will have many taxes of various kinds, some you need to pay, some you need to collect from customers. Beyond that, you also will have different legal business structures, payroll, cost structure, invoicing, and much more that may overwhelm you. Start thinking about all this from day one.

You will experience firsthand the difference between finances for managerial purposes vs. bookkeeping and tax-related finances. This will help you grow in your financial intelligence, and a good accountant is a great partner to start with.

A Lawyer

Often I have overlooked the work of a lawyer because I have not had the budget nor the sales to sustain hiring one. But there have been many times I wished I had the advice of one. In my case, usually, all questions I would want advice on have been related to hiring contracts, legal organization structure, and protection from legal actions.

When you hire new employees, what type of contract do you offer them? You need to know from your accountant what the government expects from you as the employer to sustain the expense of an employee. You need your lawyer to know the best legal options to hire employees and terminate them later if needed while all along respecting their labor rights according to law.

Collaborators

Unless your company is a one-person job and you do not plan to pass it on to a future buyer, family, or other, you want to form a team. There are legitimate reasons why you do not want a company to be handed off, but if you want to create an independent organization that can live without you, you need a team.

This is one of the critical elements for success, you cannot do everything, and more importantly, you should not do everything. If you are not yet capable of understanding that you should hire and train a team to run the company side by side with you so you can focus on growth, then you probably are not ready to start a scalable start-up. You will be on the path of creating an all-consuming job for yourself. But then again, you have to learn by doing some things for yourself.

Right at the beginning, your hands probably will be tied up by a small budget, so you will have to do most things, but as soon as you can, you need to decide to pay to get some operations running without you so you can manage and pursue your growth. That decision will cost you money but will allow you to make more; this decision alone will be crucial when significant opportunities come your way.

Final Thoughts

As we mentioned before, we often fail in one of two areas. We discussed the first area in this post, "setting ourselves as the limit of growth." Remember the saying of John Donne, "No man is an island," is true for a reason, and it applies to business relationships as well. As for the second pitfall, "choosing a poor idea with little to no potential to grow," we'll need to develop this in a following blog.

Until the next one,

Javier