What type of experience best prepares a person for starting a business? While you might think being a corporate executive or manager provides a good background for launching your own business, that’s not necessarily the case—as many ex-executives have discovered the hard way.
“What?” you say. “I’ve already got business experience, learned how to run a department and how to manage employees. Compared to my corporate job, what could be so different about being in charge of an entire company?” Plenty. Here are a few things you need to know before starting a business.
- Managing a company is different than managing a startup. Yes, if you’re fortunate and work hard, at some point your startup will become a bigger business—one that your corporate experience may well have prepared you to operate. However, for the foreseeable future, you’ll be in the startup phase. That means you probably won’t even have employees, much less multiple departments. Rather, you will be playing the role of accounting, marketing, sales and business development (not to mention admin and janitor) all at once.
- Managing yourself is different than managing employees. While starting a business, you’ll work harder than you’ve ever worked in your entire life. This requires managing not only your productivity, but also your emotional, intellectual and physical energy. There’s no backup for you, so you must ensure that you’re operating at your peak, or your startup will suffer. No matter how productive you are now, it’s surprising how much harder it can be to manage yourself effectively when there’s no one else higher up holding you accountable.
- Managing startup employees is different than managing corporate employees. Of course, not every startup is a solo venture. Perhaps you’re lucky enough to have some employees from the get-go. You’ll discover that motivating employees in a startup is more challenging than doing so in a corporate environment. For one thing, the work is often harder, and the rewards are less defined. You have fewer carrots to dangle in front of your employees—big raises or bonuses aren’t really in the picture at this point, and even stock options may seem like pie in the sky. You’ll need to come up with your own creative ways for motivating workers.
The biggest difference in running a startup rather than being part of a corporate team, of course, is that the buck stops with you. Are you comfortable with that? Maybe you’ve always dreamed of being the one to call the shots. But maybe you get a little nervous at the idea of not having anyone to back you up or provide direction. If that’s the case, here are a couple of options to consider:
- Investigate buying a franchise. In a franchise business, you purchase a franchise opportunity from a parent company, the franchisor, that has already created a system for doing business, developed a brand and provides training and marketing assistance for franchisees (that’s you). Buying a well-established franchise puts you in business “for yourself, but not by yourself.” You’ll get guidance and support from the franchisor that can help ease the transition into starting a business.
- Find mentors. Tapping into the wisdom of those who have “been there, done that” is a great way to ease the nervousness that every new business owner feels. Work your connections to see if you know someone who knows someone in the industry are considering entering. Set up a board of advisors for your new business, made up of people whose business experience and opinions you value. Take advantage of the services provided by the Small Business Administration (SBA) and its partners.