From the June 2002 issue of Startups

I've known my friend Bryan for more than 10 years--really, ever since he entered the work force. Now the 38-year-old is getting ready to enter the world of the entrepreneur, and he's developing wrinkles on his forehead faster than he's building his customer base. No doubt he'll be getting Botox injections sooner than some of his older friends.

Even though he has been hugely successful as a salesman in the high-tech universe, like every other first-time entrepreneur, Bryan's a little scared. He examined a couple dozen businesses that were for sale, by broker and by owner, and decided instead to start his own consulting business from scratch. When looking at businesses to buy, Bryan saw a landscape littered with the shattered dreams of once-young hard chargers like himself. To his credit, Bryan realized the carnage lining his highway of dreams was not the real picture. He knew the millions of successful small businesses were the rule, not the exception.

Luckily for him, Bryan's exercise gave him the advantage of seeing what could go wrong with his own start-up. But he wasn't sure just seeing the end result of a bunch of poorly run businesses actually equipped him to avoid others' mistakes. It sure enabled him to ask the right questions though.

One thing he noticed was the difficulty in actually being the boss of the entire operation, small as it would be, after only being the sales wunderkind responsible mainly for his own performance.

I told Bryan that although his new business would begin life with only two employees, these would be the most significant employees he would likely hire in the next five or 10 years. That if he established some good employee relations rules and personal habits now, they would serve him well later. These are the "rules" Bryan and I discussed:

  1. Don't hire those first employees with the idea they'll be gone in a few months. Your first couple of employees must be the rocks upon which you will build your business. You should assume you will have zero revenue for at least the first several months and insufficient revenue to fully pay any employee for at least six months or longer. Make certain your financial plan allows for their full salaries.
  2. Don't be too much of "Mr. Nice Guy." Employees don't expect to be treated as indentured servants, but they want to see a few sensible rules that offer them guidance. For instance, if you're expecting a lot of call-in business to your East Coast office (your only office at this point) from customers on the West Coast, they need to be accommodated. That's accomplished by very clear office hours. Your business can't support the attitude "as long as you get the work done, you can set your own hours." The nature of this business requires coverage into the evening hours.
  3. Offer small company benefits, not big ones. You can't match the big guys in the array of employee enticements, so don't pretend you can. Sure, you have to offer the basics--health insurance, life insurance, vacation and the like. But beyond that, capitalize on the free benefits you can offer that the big guys can't--things like rapid decision-making and immediate access to the boss. The benefits you can offer are, in their own way, more valued by your employees than anything the big guys can offer.
  4. Develop good habits immediately. Don't have a vision of the kind of boss you'll be when the orders start coming in; be that kind of boss from day one. Primarily, what I mean is: Be a mentor, not an intimidator. Remember, the authority of the intimidating boss reaches only as far as his or her arm. But the authority of the mentor lasts a lifetime.
  5. Don't fear decision-making. Quick decisions are better than deferred decisions. The first time Bryan has to make an important business decision, he may freeze. All of a sudden, he'll realize he's responsible for the consequences. Too many new entrepreneurs start deferring decisions, afraid of the results. You got into business to make decisions--well, now's the time to start making them.

Like millions of entrepreneurs before him, Bryan is taking the first steps in what should be a lifetime of business success. Although his initial plan to purchase an existing business didn't pan out, he learned a lot. Now he can put that free education to use.


Rod Walsh and Dan Carrison are the founding partners of Semper Fi Consulting in Sherman Oaks, California and the authors ofSemper Fi: Business Leadership the Marine Corps Way.