Read Never Get a ”Real„ Job Online
Authors: Scott Gerber
The last thing you want to do is end up in a sketchy partnership without reciprocated loyalty. This can lead your so-called “partners” to take advantage of your good graces. If you even have the slightest of hesitations about where your candidate’s loyalties lie, kick him to the curb before he has a chance to hurt you.
Work ethic
. Does your candidate work hard or hardly work? Obviously, there’s a big difference. Will the individual be as passionate, persistent, and dedicated to your business as you are? Does he back up the talk with one hell of a walk; or does the hour of the day or day of the week dictate his level of commitment to the cause? Is he or she an outgoing self-starter who will push you harder, or an unmotivated handholder who will slow you down? Is this individual always ready to get his or her hands dirty, or do certain tasks seem to be “beneath” him? Does he or she believe that now is always better than later and does he or she know the difference between business and busy-ness?
If someone isn’t likely to be beside you in the trenches—fighting every battle with every ounce of his being—boot him out of the foxhole before he gets you shot.
Finances
. Knowing your prospective partner’s credit score, financial status, and fiscal past are vital to predicting your potential partnership’s economic health. Does the person live frugally or extravagantly? Is he or she a spender or a saver? Does he have a lot of debt or liabilities? Do you have similar savings and financial resources at your disposals, or totally uneven net worths? Does the person know how to spend money smartly and effectively, or does she have a history of pissing it away?
You and your partner will be the bankroll and financial backbone of your business. For that reason, you need to be able to support company initiatives in both good times and bad. Make sure that the person with whom you partner is completely honest about her financial picture and provides data to support her claims. Don’t get stuck with the bill. If you aren’t comfortable cosigning on a corporate credit card or you determine that you’ll be the only financial lifeline to which your company has access, then walk away—and take your credit score with you.
Personal issues
. Know everything there is to know about your prospective partner’s life before you enter a partnership with him. In what stage of life is your candidate? Is it similar to yours or entirely different? Is he married with children, and/or have a healthy home life? Does he or she suffer from any debilitating addictions such as drugs, gambling, or alcohol? Will the individual’s personal life affect the company, its finances, or its reputation?
True partners must be able to talk about
everything
—without hesitation. Be sure that you’re ending up with a basket of joy and not a basket case. Do a full background check and discuss every imaginable topic—from business to politics to family life—with your prospective partner.
Trust
. Trust is
the
most vital piece of the partnership puzzle. Without it, you have nothing between you. Break down your levels of trust into degrees of severity when ascertaining someone’s reliability, starting with small offenses and ending with the most serious deal breakers. Would you trust this person to watch your pet? How about your home? What about your spouse, significant other, or child? Would you lend the person $100? Would you tell them your bank account password or ATM pin number?
Do not sugarcoat your trust questions. You are putting your well-being and future in the hands of another individual—so you must be
absolutely certain
that this person can be trusted with that responsibility. There mustn’t be a shadow of a doubt that if a rock were falling off the cliff and you were standing underneath that your partner would push you out of the way or trade his life for yours. If you believe there’s a chance he’d stand idly by, walk away before a boulder has the chance to crush you.
Have “The Talk”
Sit down with your potential partner in a room, turn off your cell phones, put away your computers, and lock the door. Before you become blood brothers (or sisters), you must openly and honestly discuss each of the 10 topics below in detail to ensure that you are the right fit and on the same page.
Listen carefully to the responses. Any answers that seem unclear, incomplete, half-assed, or so brief that your potential partner appears to be hiding something should immediately set off red flags in your head. Unresponsive answers such as “none of your business” or “I don’t know” should set off sirens and launch fireworks. Who knows? By the end of your talk, maybe your partner candidate won’t want to partner with
you!1. What debt or financial obligations do each of you have?
2. What information would be revealed about each of you in background and credit checks?
3. What are both of your religious views, political affiliations, bad habits, and working styles?
4. What personal, educational, business, or third-party obligations, if any, will take each of you away from your company responsibilities? How regularly and for how long will these commitments be factors?
5. In your business bank account, how much of the money would each of you spend and how much of it would you save?
6. Do either of you have any open legal disputes, past personal or corporate legal issues, or potential legal issues that may come out of the woodwork at some point? If so, what potential ramifications do each of you and/or the business face?
7. How would you like to structure the partnership in terms of equity, capital outlay, and other such deal points?
8. What do you expect from the company and the partnership? What are your goals and objectives for the business?
9. What situations and circumstances—both business and personal—would lead to each of you wanting to end the partnership?
10. If any of the answers to these questions were proven false or incomplete, what actions would you expect your partner to take and what consequences would you expect?
NEVER JUMP RIGHT IN: THE WATER’S NOT FINE
People who dive headfirst into partnerships because it “feels right” are, quite honestly, morons. When you consider others’ needs before your own or think with your heart instead of your brain, your warm and fuzzy feelings are sure to trick you into entering into a miserable partnership. Just because you’ve managed to find an individual who survived your most intense examination doesn’t mean it’s time to hold hands and leap into the deep end together—that is, if you don’t want to drown.
Before you move forward, there are five big questions you need to ask yourself:
1.
Do I really need a partner at all?
Weigh all the pros and the cons of taking on a partner. What can a partner do for your business that you can’t? Are there ways to fill the knowledge or talent gaps without taking on a fellow shareholder? Can you replace the need for a partner by, for example, hiring an outsourced third party? Consider all of the alternatives before moving forward. Remember, once you give your equity away, it might be gone forever.2.
Are there other mutually beneficial options besides a standard partnership?
If your potential collaborator invented an amazing gizmo but has less practical business knowledge than a Chia Pet, getting stuck with him could very well hamper your ability to execute the company strategy as you see fit. However, that doesn’t mean you both can’t prosper from your individual strengths. Before gulping down the partner Kool-Aid, look into suitable substitutes such as licensing deals, joint ventures, or strategic partnerships and see if it makes better business sense to keep other people’s hands off your equity.3.
Do I need this partner?
Would you be able to unequivocally defend your partnership decision to your strongest critic? Are you partnering with this individual for the right reasons? Does he or she undeniably add value to the business? Are your collective skills complimentary or redundant? What tangible assets and resources does the other person bring to the table? Are your short-term and long-term goals in sync? And finally, in the best of all worlds, is this individual the best possible partner for your start-up? Answer these questions as truthfully as possible. If you aren’t completely satisfied with your responses, then don’t settle down with your candidate. Walk away until you find the right fit. Partnering with someone despite your reservations is a terrible decision, and is guaranteed to put the future of your start-up in jeopardy.4.
Are you absolutely certain that the partnership works for both parties, in both theory and execution?
Live together for a while before you get hitched. Test it out. Determine some achievable milestones and focus on accomplishing those goals together. This will give you time to see how the roles in the partnership will be structured. In my experience, most partnerships show signs of failure in days or weeks, not months or years; so you’ll know relatively quickly if you’ve met the “partner of your dreams.”5.
Do you have the agreement locked down?
Your partnership document must define the roles each partner will play, as well as outline equity ownership, corporate responsibilities, voting powers, and how company stock can be bought or sold. During the honeymoon phase, it can be hard to imagine a world that isn’t filled with champagne wishes and caviar dreams. However, in dire times, fear and anger can quickly turn your best friends into your worst enemies. Shit happens. Be protected. “He said, she said” claims will not hold up in court—and that napkin you signed over a beer won’t be so legally binding if your one-time partner in crime sues you for everything you’ve got.
PART III
From The Ground Up
7
Act Like a Start-Up, Stupid
The original concept behind the
company that shalt not be named
was pretty straightforward:
To combine marketing and creative media to produce exciting and targeted solutions that generate results for our clients across all mediums
.
Simple enough, right? However, my partners and I were so concerned with making our start-up into the “next big thing” that we completely lost sight of our core principles. What we created ended up being nothing more than smoke and mirrors held together by hopes and dreams.
We effectively transformed our unproven, unprofitable media production company into a money pit creative agency/technology firm/investment company that sought out clients who had no money either:
Company X is the premier one-stop-shop venture management company, with a primary concentration on media-based start-up enterprises. Our mission is to combine multichannel marketing, creative media, and innovative technology to offer start-up enterprises exciting, inventive, and consumer-specific solutions that generate or enhance topline revenue growth. After conducting comprehensive due diligence, our Company will select clients with minimal financial resources and offer them a wide array of multidiscipline media and business development services. Since marketing and media costs are extremely prohibitive for start-ups, we will provide strategic services to its clients in exchange for gross revenue sharing opportunities.
Now
there’s
a mouthful of crap for you to swallow.
So how did we let this happen? How did we take something so simple and convolute it to such an absurd level? Several reasons:
Building a business is like constructing a house. If you don’t take time to lay a solid, sturdy foundation, the whole structure is doomed to come crashing down around you. Putting the right protocols, systems, and thought processes in place in the early stages of your start-up will reduce the chances of your roof caving in.
Now it’s time to teach you how to act, think, and operate like a start-up to ensure that your house won’t collapse around you.
SURVIVING A “REAL” DAY IN THE LIFE
There is absolutely nothing glorious or glamorous about starting a business. Don’t let the lifestyles of the rock star entrepreneurs or reality TV fool you. Forget about fancy offices, fast cars, and fat expense accounts. That level of success is rare and never built overnight. In most cases, it takes decades.
While launching a start-up is undoubtedly an exciting and liberating experience, managing the organization on a daily basis can be anything but a dream. If you let your visions of “the life” blind your good sense, you’ll find yourself disappointed and looking to quit with every misstep.
The entrepreneur’s lifestyle is not 9-to-5
. Entrepreneurship is both a lifestyle and a state of mind. Becoming a business owner means that you’re becoming more than a person. The goal is to form a symbiotic relationship with your business—in effect,
becoming
your business.
Though the entrepreneurial lifestyle can be truly rewarding, you will only get out of it what you put into it. So give yourself completely to the cause. Reassess and rearrange your priorities. Figure out what’s truly important, and abandon what isn’t.
Need to work late hours? Do it!
Have to do grunt work to save cash? Hurry up and get it done!
Need to downgrade your lifestyle to accommodate your cash flow? Well, what are you waiting for?
That being said, don’t become an entrepreneurial martyr. The term “start-up” refers to the earliest phase of a business’s life cycle; it’s not where your business is meant to stay for all eternity. Every aspect of your company’s success will fall solely on your shoulders during its earliest stages, but this working methodology will be heavily taxing on your body, mind, and soul. It is not sustainable, and at some point, it will work against—rather than for—your business growth. Again, this is why it’s imperative that you work your ass off to get out of this developmental stage as quickly as possible. You want to get to the point where you can hire people and transition from being dependent on bus passes and chicken noodle soup into a stable business owner who works on—not in—his business.
Rise above the grind
. Entrepreneurs can’t afford to see the world through rose-color glasses. You won’t be chauffeured in private black cars, no one will think you’re important, and rarely will you spearhead life-altering meetings. Chances are you’ll spend most days working out of your apartment, sending out countless introductory e-mails to prospective clients, and rationing takeout into multiple meals.
The reality is that the world is an unfair, unpredictable and full of hard knocks place where a day without a sale is one day closer to bankruptcy. There will be good days when you’ll feel like you’re king of the world and bad days where you’ll want to crawl up into the fetal position in a dark corner. There will be moments of victory followed by weakness, doubt, and defeat; times when you feel as though you can’t even think about your start-up for another second. You’ll undoubtedly fall down and won’t want to—or think you can’t—get back up. If you truly want to become a stable and successful self-employed business owner who lives on her own terms, there is only one thing I can say to you.
It’s your choice: Accept the entrepreneurial lifestyle for what it really is or go find a “real” job where you’ll never truly reap the benefits of your labor.
Don’t just sit there crying or looking for sympathy when things aren’t going your way; instead, figure out how to get back on track. If you find yourself in a dark hole because cash flow is drying up, dig yourself out by bootstrapping, and improving your marketing and sales tactics. If times get tough because of the economy, restrategize your price structure, retool your service offering to make sense under the conditions, and push forward with a new sales campaign geared to spin a negative moment into a positive bottom line.
Your days won’t be easy, especially in the beginning. However, if you work hard with passion and purpose, they’ll certainly be more fulfilling, rewarding, and fruitful than any “real” job. Never forget why you decided to become an entrepreneur in the first place. Many times, those convictions will serve as the only light at the end of the tunnel.
There is an “I” in team
. As president, CEO, and chief bottle washer, you can expect to wear many hats; most of which you’ve never worn before or never even thought you’d try on. Perhaps this will be your first time writing a client proposal, or figuring out how to shoot a video for your Web site. Either way, my point is that some hats will fit right away—and others won’t fit at all. For those that aren’t so snug, fear not. You’ll figure it out. How am I so sure? Because in the beginning you have
no choice
but to figure it out. If you don’t do it, it won’t get done.
Ten Ways to Avoid Quitting or Failure in Your First Three Months
1.
Amass clients, not capital
. Don’t sell a business idea to people who won’t care—sell products and services to people who
might
care. Fund your company on consumer revenues and build your business with
only
your business in mind—not hypothetical future investors.2.
Sell! Sell! Sell!
Concentrate on selling—not planning—the plan. Create income, not paperwork.3.
Perfection is the enemy
. Good enough is better than perfect. Forget crossing your t’s and dotting your i’s; your priority is to find the fastest routes to generate immediate cash flow.4.
Productivity at all costs
. Stay organized and efficient, but don’t get caught up in busy work. If your tasks aren’t directly related to your bottom line, scrap them in favor of efforts that are.5.
Automate, delegate, or outsource remedial tasks
. Automate tasks you can’t scrap (like paying bills and bookkeeping) with online tools and cheap services so you can keep your eye on the revenue-generating tasks.6.
Be penny wise, not dollar foolish
. Always attempt to save money wherever and whenever possible. However, don’t try to save money at the expense of productivity as your start-up begins to generate positive cash flow; rather, invest in productivity when necessary to increase your effectiveness. Outsourcing select activities (such as those mentioned in number 5) will dramatically free up your time and keep your attention where it needs to be: on sales and marketing.7.
Be realistic
. Stay reasonable and grounded. Keep your sales, marketing, and business growth assumptions and expectations in check. It’s better to surprise yourself with positive results than it is to consistently disappoint yourself with negative ones.8.
Fix it as it breaks
. If something isn’t working, determine the root cause, assess the possible solutions, and fix it—right then and there. Don’t make the same mistakes twice, or the second time might be your last mistake.9.
Don’t be a procrastinator
. Tomorrow is
never
better than today. Wake up every morning knowing how you are going to get the most out of your day. Get off your ass and find ways to make money.10.
Connect with people who know what you don’t
. You don’t know all, nor should you try to. Find mentors who can answer your questions, help you move your business out of ditches, and set you straight when you’re being a moron.
From photocopying to paying bills to cold calling, you’ll need to do
everything
in the earliest stages of your start-up. Don’t expect to be able to hire an assistant or intern right away; many times, you’ll have to do grunt work. Yes, it’s important to win bids for service contracts, but it’s equally important that you remember to fax the client an agreement, follow up on the status of unpaid invoices, and collect your fees.
No matter how remedial, unpleasant, or boring a task may be, you’ll have to master each process in your business from the bottom up—until you have the means to outsource, delegate, or eliminate them. If you’re a plumber, you need to be able to fix a toilet before you can teach an employee to do it in a manner to your standards. If you’re a childcare provider, it would behoove you not to work with the loudest or messiest kids; how else would you be able to teach your future employees how to handle such kids? Don’t let your ego and delicate sensibilities get in the way of getting things done. Do whatever it takes to be successful with your own two hands. The faster you grow your company on your own back, the quicker you’ll have access to more hands, options, and resources.
If you feel stumped or lost, take a deep breath, step back, and figure it out. Good advice and answers are always available; you just need to know who to ask, where to look, and be able to sift out the gold from the dirt.
Though entrepreneurship certainly isn’t easy, it’s not all that complicated either. At its very core, going into business for one’s self is the process of selling something to someone else. That’s it. Whenever you feel overwhelmed, calm yourself down by remembering that simple fact—and get back to basics.
Always sweat the small stuff
. The smallest, seemingly insignificant issues have a funny way of snowballing into major disasters. Little blips on the radar once deemed unimportant may actually be warning signs of dangers on the horizon. For example, dismissing a cash-flow problem as the result of a slow, off-peak month—rather than further investigating to determine if your collections process is too lenient or your services are priced too low—might lead to real problems down the road.