4 Things Entrepreneurs Should Think About That May Not Be in the Business Plan
A Note From The Editor
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Walking away from the comfy confines of the corporate world to start our own business was not only scary but we also encountered considerable skepticism from family and friends. What about job security, room for advancement, a 401(k) and insurance, they asked. Some wrote us off as simply two naive, young women. Others thought we were crazy to walk away from everything our burgeoning corporate careers appeared to offer for a situation in which success was far from guaranteed.
We weren’t just making this decision on a wing and a prayer, though. We had identified a tremendous potential opportunity. Having recently helped several entrepreneurial friends market their new businesses, we recognized the positive impact that social media offered for brand awareness, reputation management and lead generation. We learned how to successfully target large numbers of business prospects in a cost-effective way. Once we were able to begin quantifying results and demonstrating a return on investment, we launched our own social-media-marketing agency.
We carefully constructed a comprehensive plan of our strategy for capitalizing on this opportunity. We had a mission statement and planned how much money we personally needed to invest to get the company running and cash to set aside for lean times.
We projected how many clients we needed to sign and what to charge. We identified our target industries and our competitive advantage over other agencies.
With dollar signs and dreams of autonomy dancing through our heads, we ceremoniously offered our resignations the same day.
Yet we quickly learned how much we hadn’t accounted for.
There was way more to worry about and address than we had ever envisioned. Panic quickly began to set in. Perhaps the naysayers were right and we were in over our heads. Maybe we were, in fact, just two naive young women who had foolishly given up their corporate careers. Was it too late to call American Express and Marriott and beg for our jobs back?
We are happy to share that we never did make those calls. As bleak as things seemed, we somehow found ways to weather the storm and our company survived. Four years and seven additional employees later, the company continues to grow.
Ye it took more hard work, sweat and tears than we ever imagined. This is where our pain becomes your gain: We want to help those about to dive into the entrepreneurial pool by sharing four items that are critically important to consider.
1. Find a good lawyer.
Shortly after launching the business, we received a cease and desist letter concerning the use of our company's name. We were unsure about the ramifications and what would be needed to be done to rectify it. If it were not for a competent business attorney with experience representing companies similar to ours, we could have lost more than just time and money. (We ended up changing the name to the current Socialfly.)
Partnering with a trustworthy attorney who is knowledgeable and savvy in helping entrepreneurs is pivotal. Establishing the right relationship is key, as the right or wrong advice can make or break your firm. Take your time, perform due diligence and don’t simply go with the cheapest option.
2. Work with a knowledgeable accountant.
Being so new to running a business, we did not know how much we actually did not know. Very early on we were introduced to an accountant who seemed smart, professional and pleasant. A big draw for us was that his rates were also very affordable. Everything was running smoothly. But as tax season hit, disaster struck. He did not sufficiently prepare us for how much money we were responsible for in taxes. Since we had a small cash-strapped business, the tax bill had the potential to cripple our firm.
Upset and seeking a second opinion, we were put in touch with a veteran certified public accountant who specializes in helping startups. Not only did he help us lay out a plan (which allowed us to meet year-end tax obligations), he pointed out several other items on our return where we had been missing out on an opportunity to save.
He also demonstrated how closely he works with clients throughout the year to help them manage and improve cash flow, all while setting realistic expectations and preparing them for the tax season. While it was a humbling experience, we learned the value of having a strong CPA. The right one isn’t just your accountant: He or she can be a partner to and an extension of your business. So do your homework.
Related: What Your CPA Isn't Telling You
3. Hire people better than you.
Early on, we were challenged in trying to attract great talent to build out our team. In addition to having a brand new agency with no proven track record and a tiny roster of clients, we were unable to offer salaries competitive enough to procure experienced individuals from other firms.
We felt that if we were lucky enough to find someone pleasant, professional and competent who was willing to take a chance with our firm, we should hire that person.
Once we got some people on board, we quickly learned how some individuals were not as experienced or hungry as they had advertised. Their work was OK but it was simply the bare minimum of what was required. We needed a certain level of quality to help differentiate our firm and attract other businesses to work with us.
We were now stuck with these staffers until we could find better support. This illustrates the importance of thoroughly scrutinizing and vetting candidates. This became our first lesson in the importance of being patient during the hiring process, regardless of the need for help.
Hiring the right person can take your business to new heights. Conversely, hiring the wrong person can quickly drag down a business. You can never be too careful when analyzing a potential hire. If you aim to hire people whom you perceive to be as talented and driven as you (or even more so), it will pay off.
4. Prepare to always be networking.
The biggest culture shock during our transition from corporate employees to business owners was the demands on our time. There were so many logistical and operational challenges peripheral to our brand’s mission that took our attention. But if we were busy dealing with lawyers and accountants, while interviewing, hiring and training support staff, how could we generate awareness of our brand and uncover new clients?
This is when we discovered the power of professional networking. As we accepted the reality that our professional lives no longer took place just between 9 and 5, we learned there were opportunities to attack all at once several areas involved in running a small business.
We were delighted to discover the wealth of events, trade shows and networking groups designed to connect us with professionals who could help our business from top to bottom. Most important, they put us in direct contact with the types of organizations we hoped to target. The connections we made at these events were invaluable. It also demonstrated to us that the work we did during the day was only half the battle.
If we weren’t personally out there spreading awareness of our brand and making strategic business connections, then no one else would do so for us. We were hunters now and would be able to eat only what we could kill. Therefore, we needed to always be prepared to network and connect with anyone and everyone we met.
Remember, your next client, deal or referral partner can come from striking up a simple conversation while waiting in line at a store or standing on the subway. Be prepared to introduce yourself, talk about your business plan and share your elevator pitch.
In addition, be sure to identify all events and opportunities that will allow you to connect with the right audiences. Fill your calendar. You are your brand’s best publicist.
Editor's Note: This story has been updated to clarify the former employers of authors Courtney Spritzer (American Express) and Stephanie Abrams (Marriott). It now also includes the outcome of the letter challenging their firm's name: a new corporate name.