Monthly Archives: September 2010

Business is never easy.

I heard two Chinese Americans talking over a year ago about business. They agreed that if it were easy, that everyone would do it. I think they were talking about Real Estate business, but what they were talking about applies to anything in life. Nothing in life is easy, especially not business. My father always used to say that business was a “know-nothing” profession. This is true in his case, because he knows nothing about business. I think he meant that it didn’t require any “real” knowledge like book knowledge or scientific knowledge.

The type of skills and knowledge that you need for business are not taught so much in schools. Sure, during your MBA, they will talk a lot about many higher level business concepts. But, if you are starting a business from scratch, you need more nuts and bolts knowledge which schools typically don’t know how to teach and probably don’t want to either. Too pedantic!

People who are young and new to business often make many mistakes. Here are a few.

(1) They choose the wrong partner.
In business, it is hard to choose the right partner. Everyone is the wrong partner. If you have no skills or money, you will not attract the right partner. So be your own partner. 99% of partner relationships experience serious problems. One partner loses interest, or they don’t want to do particular tasks, or they don’t want to work as hard, or they just aren’t that talented. You might have more serious problems if a partner is stealing from you. It is common for a partner to want to sell out early. The fact is that no two people are ever completely on the same page which is why partnerships generally don’t work — even if they are close family members. As a general rule, try to do it yourself, and team up with others in a way where you are not dependent on them. You can hire them as a consultant, subcontractor, or they could have an investment relationship with your company as well. That way if it doesn’t work out you can easily replace them.

(2) Quitting your day job
Don’t be in a hurry to quit your day job. I have quit my day job several times, and the time I waited a long time was the best time. Sure, you’ll be busy, but businesses have ups and downs and take time to get stable. If you quit prematurely because you made money the previous month, what about next month. You don’t know what’s going to happen. Take your time, and develop your skills and client base first. I’m talking about taking a few years even. Go slow and steady — be stable!

(3) Trying to predict
As a young entrepreneur, you will be likely to have big dreams and huge predictions. The reality is that you don’t know what is going to happen. Thinking positively translates into thinking wildly unrealistically. Picture yourself succeeding, but be careful of assuming that things will go one way or the other. You don’t know what is going to happen, even if you have been in business twenty years! Sometimes even when you do a good job, growth is slow, and often you might end up in a new direction due to market conditions. Expect the unexpected. Business is like life — unpredictable. Business planning consequently doesn’t make sense to me. It is good to have a formal written direction, but you need to change course a lot in business, so try to be flexible in your thinking. Accept change.

(4) Lack of critical skills
One of the reasons so many entrepreneurs fail is that they lack critical skills. I believe that if you have the conviction, you’ll find a way to make it even if you lack a lot of skills. But, it takes time to develop skills, and you also need to focus on it. Instead of focusing purely on making money as fast as possible, try to focus on the skills you are worst at and really work on those for a year or so. In the long run you’ll need those skills. I’m talking about five, ten, and twenty years after the fact. Try to think long term without predicting a particular outcome. Regardless of outcome you will need skills. What type of skills am I talking about?

You need industry specific technical skills, analytical skills, you need to pick good locations or market segments to target, you need hiring and firing skills, marketing skills, accounting, and time management skills too. This is a lot for one person to master. So, work on your skills one by one. I’m bad at hiring, so I am working on that more this year. You can’t really expect big success in business unless you have attained functionality in your basic business skills — all of them. Even if you hire others to do particular tasks for you, you won’t know if they are doing a good job or not if you are severely limited in your own skills.

(5) Lack of experience hiring people
I covered this point in a previous section, but I’ll mention it again. You can’t survive in any type of business if you are not good at hiring people. How you determine who is good is up to you. But, it is complicated. Some people are smart, but not reliable. Others are kind, but not punctual. Some are boring, but get the job done, while others have bad attitudes. You might find someone perfect who can only work ten hours a week. How do you choose from all of these diverse characteristics? You choose by trying people out and seeing what happens. Your choices ideally should be ones that are good for the long run, not the short run!

(6) Willingness to work non-stop
As an entrepreneur, you have to be willing to work non-stop for a goal that you might never achieve. I worked three years on my first serious business as an adult before breaking even. I worked 55 hours a week as a mobile notary and 15 hours a week building my online directory business. It paid off big, but boy did I commit to it when it wasn’t paying off. I had unbreakable passion and fanaticism about what I was doing. If I had lacked that drive, I never would have made it. If you are considering being an entrepreneur. Consider this point before you devote your life to your business. If you don’t have the drive, when the going gets rough, you might crack. You might have it fine in the beginning of your business and then have problems years after, or like most, you might have most of your problems the first five years. Personally, I always have problems. It is my drive that gets me through them — not my brains!

Business is hard, but don’t despair. It is meaningful when you get your reward. You earn your freedom and you make big money if you do it right. I make it a practice to go to five-star restaurants from time to time to remind myself that I worked hard and made it. Maybe I should remind myself in more ways. But, after my rewards, it is back to the computer for more work! If you succeed, you need to keep that success alive by keeping the ball rolling!