Entrepreneurship Comes With A Heavy Price … And Rich Reward
With reports painting contrasting pictures of failed business startups versus breaking success stories, the signs of whether or not now is the time to make the transition into entrepreneurship can be hard to read.
Numbers from a 2017 report showed signs of entrepreneurial optimism (albeit slow and cautious). “In the previous year, 84 percent of new entrepreneurs were ‘opportunity’ entrepreneurs as opposed to ‘necessity’ entrepreneurs,” says Leigh Buchanan, referring to the Kauffman Foundation 2016 Index of Startup Activity. “With 550,000 new businesses launching each month.” But dipping one’s toe into the uncharted waters of business ownership has its rough waters. “Going from corporate to entrepreneurship was the hardest thing I’ve ever done,” said Mario Martinez Jr. , who spent over 21 years in corporate life, managing $300 million in revenue. “People talk about aspirations to go from corporate to owning your own gig, but if you are solely responsible for feeding your family, you have to make sure you replace that lost income.”
I spoke with Mario about three essential steps to making the transition from employee to entrepreneur. Although a change like this isn’t without risks, a foundation built on preparation, scale, and adaptability is a promising place to start.
You have one opportunity to make this endeavor successful. A strong desire is important, but that is just the beginning. Before you take the plunge, Martinez emphasized that a few things need to be in place including a specific plan and timeline. “Have your plan and vision all laid out,” said Martinez. “Otherwise, you’re trying to develop the vision, plan, and find clients all at the same time.”
It’s common for aspiring entrepreneurs to feel overwhelmed by the loss of reliable income while embarking on a new (and expensive) endeavor. A good gauge is to set aside enough income to sustain your household for one year. “If you think about it, you don’t need as much as you think you do in order to make this work,” says Andy Ayim. “It is tough struggling from month to month, but think of minimum monthly income as survival mode.” Ayim added that while you won’t have to live under these tight financial constraints forever, you will likely have to do some cutting back in the early stages.
Finally, this decision and subsequent lifestyle changes require buy-in from significant others who are sharing this journey with you. “Having people close to you to keep you on course, encourage you when you face challenges, and cheer you on when you succeed are very valuable assets,” says Michael Cole. “It can also be helpful to use your spouse as an idea board to bounce things off of or give you a new perspective on a certain project.”
One of the biggest entrepreneurial challenges is the lack of staff. “I had a hard time replicating myself as a soloist,” said Martinez. “So I decided to merge together many of the soloists with the same challenge and create the largest digital sales transformation service provider globally. Building it on my own could be done, but I realized I needed and wanted to get to scale fast. So I did a few things.”
It’s important to assess your skill set and identify your deficiencies, then tap into your network to find people who can offset those shortcomings. “When you bring everyone together with different efficiencies, you scale yourself times four,” said Martinez. “You’ve got four times the firepower and four times the skills.”
At the same time, you’ll also want to decide what kind of company structure to register, whether you choose to incorporate, form an LLC, or create a partnership. “Get this taken care of legally and carefully define the roles and investment of each of your leadership team members,” says Entrepreneur contributor Sujan Patel.
Despite your commitment to a business plan and vision, circumstances like market demand or capital may require some adjustments. In this business, there are no guarantees. But that doesn’t mean you should avoid trying new things or consider changes. “If you must make mistakes, make them early,” said Martinez. “And make necessary changes quickly.” He finds tools and technology that makes the biggest impact and leverages them. “Social media is a phenomenal way to create massive visibility,” said Martinez, who believes brand drives demand.
Although adaptability is a prominent fixture in startup companies, the need for flexibility is constant to ensure business longevity. “The most successful people in the world are always taking the opportunity to grow when and where they can,” says Entrepreneur contributor Aj Agrawal. “They don’t just adapt when the time comes. They adapt whenever, wherever.”
The key is to get out of your own way to drive your brand. “Don’t do normal,” said Martinez. “Challenge the thought process.” By preparing a clear business strategy, recruiting collaborative support that complements team skills, and tracking pivotal marketing trends, the transition from employee to entrepreneur will move forward with exciting results.
Ryan Westwood is the CEO of Simplus, a Platinum Salesforce Partner. An experienced entrepreneur, he is also a bestselling author and speaker on entrepreneurship.