As many of you know, I kicked off Divergent Dynamics, Inc. in April 2014. I started with no money in the bank, no insurance, bills pouring into my mailbox like raindrops in a monsoon, and no idea where to start or what to do. I started, like most people, with panic. That was soon followed by more panic, which then led to a series of rookie mistakes. Hey, what can I say…I’m a rookie. I’ve never started a company BY MYSELF before. In previous ventures (CWNP, Peachtree Wireless, and the biggest (and funniest) failure I’ve ever participated in: Vestivus), I always had teammates to share the load, the blame, decision-making, and the experience with. Not this time. This time, it was just my ego and me, and both of us have issues, as any number of my friends can attest to. This blog is for the budding entrepreneur who has decided to go it alone, at least in the beginning. It’s my hope to share some wisdom, derived from experience, that will allow others to bypass at least some of the pain I’ve been through.
Rule #1 – Focus
You must focus. Ruthlessly focus. Mercilessly focus. If you don’t know exactly what you want to do or what you want to accomplish, then spend your time thinking, planning, discussing with more experienced friends, researching, and soul-searching. Don’t move until you know what you want to do or where you want to go. There’s an old saying, “If you don’t know where you’re going, any road will take you there.” That’s exactly right. If you start your venture by running somewhere, you may (and probably will) have to spend a significant amount of time and resources later, back-peddling. It’s better to sit tight for a bit than to run in an unknown direction thinking that your hurrying could equal success. Think, then move.
Early-on, I cast a wide net. It was my first, and biggest mistake. I’ve spent months cleaning up my own mess. If you can’t pitch what your company is about in 10 seconds or less, then you haven’t defined it well enough or don’t know it well enough. Focus!
Rule #2 – No Man Is An Island
There have been so many friends, acquaintances, and even total strangers (who have become friends) who have stepped up to help me in unbelievable ways. Some have taught me, some have fed me, some have enabled me, and some have encouraged me. It was all needed and appreciated.
Never think you have to do everything yourself. You don’t. I’m typically the definition of “Mr. Independent”, and I can testify that no man is an island…certainly not me. If you think that you can go it along, be my guest. I don’t recommend it. I can transparently say that were it not for my friends, the last 6 months would’ve been disastrous rather than mere difficult. Even now, multiple friends give me their time and share their wisdom without asking for anything in return. I look forward to a day in the near future that I can repay their love, dedication, and confidence in me manifold.
From speaking with esteemed colleagues, I’ve literally had lists of items to “keep in mind.” Some of these “tips” were so valuable that they’ve defined how I run my day-to-day business, and I find myself repeating them to others quite often. I’ve been able to shortcut years of pain by listening to those who shared their wisdom with me, and I will always be grateful to each of them. Oh, and if you think I’ve “arrived”, think again. I still gladly accept feedback and input from those who are clearly more experienced than I, or have a better perspective on things than I. I’ve learned to listen more, talk less, try new things, and be very appreciative.
Rule #3 – Seek Wisdom
There was a young, new bank president who wanted to seek the wisdom of his predecessor. He met with his predecessor and asked, “Sir, how did you become so successful?” The older man replied, “Good decisions.” The young man asked, “Sir, if I may, how does one come to make such good decisions?” His predecessor replied, “Experience.” Persisting, the young new leader asked, “I see, but how does one gain this experience?” The reply came softly, “Bad decisions.”
I very much equate wisdom with experience in my own life, and I believe that most people will readily share their knowledge and experience if you just ask. Experience is an amazing teacher. If you don’t have experience in a given area, then ask for the wisdom of others. It’s always better to learn from the experience of others rather than making all of the mistakes yourself.
My old friend Habib Collector taught me that a person is more valuable when they share knowledge than when they horde it. Thanks Habib. Your wisdom has rang true since you shared it with me in 1993.
Rule #4 – Be Efficient
Time is your most precious resource. Nothing else is even in the running. You must be efficient if you are going to be successful. This tidbit of wisdom deserves a category all its own because every conceivable thing and every person you’ve ever known (and some you don’t) will try to use up your time. You have to prioritize, focus on what matters, and don’t let inefficiencies eat up your time. This applies to marketing, project paperwork, sales and business development processes, letting customers get out-of-scope with their requests, spending time on the phone, doing your invoicing/billing, and every other task involved with running your company. If there’s a time-suck anywhere, get rid of it immediately.
I had to break ties with a business partner (who was bringing me work) because his company was so dreadfully inefficient that I would lose all of my time working on a project with them. His projects were costing me 4 times as much time as working with any other company, for the same income. Therefore, I was making 25% as much working with them. So, “So long, and thanks for all the fish.”
The worst time-suck in the world is paperwork, and yet, paperwork is all-important. “No job is finished until the paperwork is done”, right? Right. However, that doesn’t mean that every Scope of Work (SoW) or RF Site Survey report has to be 150 pages long. Nobody will read something that long anyway. Most reports of that type are reference documents that likely begin gathering dust, sitting on a shelf, just 15 minutes after you finish writing it. Doing business is about relationships, trust, and value. Do as much as possible on a “handshake” because anytime one party (you or your customer) has to refer back to some entitlement within a SoW, something has already gone awry.
One last thing on efficiency… hunt smaller game in the beginning, and work your way up. I like to jokingly say, “rabbit, squirrel, rabbit, squirrel, deer…..rabbit, squirrel, rabbit, squirrel, elephant.” Kill your daily food, and then let the big stuff come when it comes, often due to referrals.
Rule #5 – Do Your Own Finances
There’s a million things I could say about finances, but there are a few critical ones. First and foremost, learn to CORRECTLY do your own day-to-day bookkeeping, if this truly isn’t an option and numbers can confuse you easily, you will more than likely be better off at researching into different accounting firms in NYC or other locations to handle your finances. Don’t farm it out to your cousin, a friend who “does accounting stuff” for another company, or anyone else. Do it yourself. If you don’t know how, then it’s time to learn basic bookkeeping. It will take you one day to learn everything you need to know in order to run your daily books. I use Kashoo, which is quite nice for accounting n00bs like me. Bookkeepers are cheap. Good bookkeepers are not cheap. Accounting errors are time-consuming, confusing to fix, and expensive. Accountants are CRAZY expensive. Do your daily bookkeeping yourself, and at the end of the year, take your books to an accountant for auditing, with whom you will now be able to speak intelligently.
Other important financial items include:
- choosing cash vs. accrual accounting (usually cash is better in keeping things clean for small businesses)
- understanding basic tax law (e.g. what you can/cannot deduct, the benefits of tax-deferred income, etc.).
- getting a business checking and credit card merchant accounts set up early-on.
- finding the right cloud providers for essential services like a website, email hosting, accounting, web-meetings/webinars, phone services, and so on.
- speaking with a financial advisor who can give you guidance on setting up retirement plans, such as a Solo 401k. If you are not sure on which retirement plan to go for, research is the most important route to take, looking up results such as ira vs 401k can help you with your decision.
Stick with the less-expensive, less-complicated packages because it’s YOU who has to figure out how to install, use, and upgrade everything. Efficiency is good, and cheap is good.
Don’t forget to do all of your diligence on setting up payroll (I recommend Kashoo’s integrated function or SurePayroll), setting up a sales tax account with your state (if you’re going to sell products), the legal documents to form your company (e.g. C Corp, S Corp, LLC, Proprietorship, etc.), setting up an account with a distributor (if you resale for a vendor), setting up a corporate credit card (with a high limit, and that gives you airline points), and all the rest. There are many moving parts to operating a small business, and it takes time to work through them all.
Rule #6 – Learn To Say No
Steve Jobs famously said, “People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully. I’m actually as proud of the things we haven’t done as the things I have done. Innovation is saying no to 1,000 things.” He was right.
In the beginning, you will think that you need to say yes to everything just to get some money coming in. That will lead you down all sorts of bunny trails that are difficult to recover from and will assure that you can’t focus that way. That’s why my number 1 rule is to stay Focused. Set boundaries within which you will do work. Those boundaries can include your daily rates (never hourly unless billed by-the-day), where and how you will travel, how you will charge for services (e.g. daily rate, block time, etc.), what types of work you will do, and so on. Do what you’re good at, and partner for the rest. Others will gladly give you a referral fee/commission for feeding them business.
Well, that’s it….my “Top 6 in 6” as it were. Maybe you’ve had some different experiences, and would like to share them with us. We’d love to hear from you.