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Chapter One

Finding Your Calling

You learn to Recognize, Articulate—and—Capitalize on Your Passions and Strengths

When Tom Scott and Tom First launched Nantucket Allserve in 1988, they had no great plans to build a world-class beverage company that many people recognize today as Nantucket Nectars. The two had both recently graduated from nearby Brown University, and they just wanted to run their own business. This urge, of course, was synonymous with a desire to run their own lives. Tom First always considered himself a “staircase person.” When confronted with the choice between an elevator and a staircase, “I will always take the stairs over the elevator,” he says, “because the elevator will stop anywhere—and on the stairs I can control my own destiny.”

And so the two formed the company to avoid having someone else tell them where to get off, as it were. In their early days they ran a boat business, hustling for any work they could find. They towed and fixed boats, hauled fish, and delivered everything from bread to newspapers to the fishermen in Nantucket Harbor. The two set up a shanty for fishermen to open their scallops; they helped people wrap their boats for the winter. And then, during a slow stretch in the winter of 1989, Tom First made a peach juice concoction at a dinner party that everybody liked. And right away the two said, “Let’s sell this off the boat next summer. We’ll call it Nantucket Nectars.” And from that spark they grew a company that today does more than $50 million in annual business, and is a model of spirited management.

Mary Baechler hadn’t intended to build a $10 million company with more than 100 employees when she first started selling baby strollers. She just wanted to save a little time. In 1984 she and her husband Phil, new parents at the time, were having trouble finding time to jog. So Phil cobbled together a device that let him combine his daily run with time with their new child. When people began asking where they could buy one of these strollers, the two would build one in their garage and sell it to the customer. Thus was born the Baby Jogger, Inc. Today the Yakima, Washington, company has diversified into crib liners and other baby gear. And Mary, who remains head of the company, has learned a great deal about business through a venture that in its early years was conducted at their kitchen table. Yet she credits the emergence of the thriving and complex enterprise to the simple impulse to combine her time for jogging and being with her children.

Finally, consider Amy Miller. While studying to become a doctor at Tufts University outside of Boston, Miller started scooping ice cream at a local ice cream store named Steve’s. At the time the store enjoyed the celebrity of being an early “boutique” ice creamery, offering high-premium sweets in a funky setting that drew crowds that formed lines literally around the block. The more Miller scooped, the more she fell in love with the business. And the more she discovered that she’d rather spend time tending to individual stomachs than to curing colds. Over time Miller learned the ins and outs of the business and in 1984 launched Amy’s Ice Cream in Austin, Texas. Today the company has eleven stores and does more than $3.5 million in annual sales.

Three different successful businesses--three different paths to success. None of these successful company builders were seasoned or experienced when they launched their nascent ventures. In fact, none of them had any practical experience about running a company. Rather, they were fueled by a passion for what they produced, and by a restless urge to control their own destinies. Though each brought different strengths and knowledge to their enterprise, they all grew their company at a pace comparable to their own personal development of skills. For each of them, as it will be for you, the simple process of running their company taught them what they needed to know. You can learn all you like from courses and books, but the act of running your company will always be the greatest source of growth and learning for you. It’s similar to the difference between reading about a foreign country through guidebooks and movies and actually traveling there. Proficiency comes through practice, and business will teach you what you need to know.

The experience of these three people, and of many more entrepreneurs, reveals a truism about business start-ups that flies in the face of most dreamy legends about perfect jobs and dream companies. Even though many small business owners report a sense of control and happiness with their companies, they aren’t all working on fantasy businesses based on childhood dreams or abstract ideals. Many of them “found” the right business through the process of being in business. This is not to say that they aren’t basing their businesses on something they care about deeply. The two Toms couldn’t be more passionate about making juice; to hear them talk about a new design for a bottle is not unlike a Formula One Race car driver praising his or her car. Although your passion for what you produce should be at the heart of your business, it might not be the sole factor in determining what kind of business you should start. There are other critical factors. Now is the time to look at what they may be.

This chapter will teach you to listen to your own dreams and passions, link them to skills you have, identify your resources and opportunities, set personal goals and a mission, and then determine the most likely business that arises from this gumbo.

Or…not?

But before you start borrowing money and building storefronts in the air, it’s a good idea to be sure that you really want to embark on this journey. Before we analyze your individual venture, you must ask one fundamental question. Do you really want to start your own business? Launching a business is a massively time- and soul-consuming project with the potential to destroy your personal life, cripple your self-confidence, obliterate your personal (and family) resources, and pretty much leave you with nothing to show for it. It’s wise to think long and hard about whether you really want to embark on this journey. (See the sidebar “Should You Keep Your Day Job?")

Personally, I don’t believe that there’s one easy-to-define “entrepreneurial type.” Rather, anybody with commitment and the right mindset can master the skills and take the actions that make one an entrepreneur. As Peter Drucker puts it, “Everyone who can face up to decision making can learn to be an entrepreneur and to behave entrepreneurially. Entrepreneurship, then, is behavior rather than personality trait.”

Which is not to say that starting a company is for everybody. There are many considerations to take into account when considering whether to launch a business at all. First, you should match up whether you are at some fundamental level a good fit with starting a company. Try looking back over your life, for example, and asking whether you have acted entrepreneurially before—in anything from finding or creating a market for funky earrings to creating something you wanted but couldn’t find elsewhere. For a quick check on how you might be tested with your endeavor, see the sidebar “Who Wants to Be an Entrepreneur?”

Launching a business is not as risky as you might imagine. There’s a huge distinction between risk, which can be characterized as the possibility of loss, and uncertainty, which refers to the lack of knowing what lies in your short- and near-term future. In many ways, launching a business is less risky than sticking it out at an uncertain job in today’s fast economy. Just look at the continued layoffs from established companies, which even in the best of times are striving for ways to streamline staff in the name of efficiency.

Moreover, start-ups are more resilient than most people think. Research done by economists at the Small Business Administration (SBA) shows that more than half of all businesses last for more than two years, while another half of that number lasts for four years. The actual stories behind these statistics reveal ahealthier scenario than these numbers indicate. These statistics include the large number of businesses that are sold, or whose owners retire, or close shop for greater opportunities. Granted, certain industries are more failure-prone than others. But don’t forget: You aren’t starting a statistical probability. You’re starting your own unique business.

As opposed to risk, start-ups do introduce a highly revved-up uncertainty to your life. You will have to learn to get better at answering questions and get better at figuring out what the salient questions in your business life are. You’ll have no guarantee of steady income, professional validation, or the simple psychic comfort that comes with having an established job. You may not know where your next round of capital will come from, or how you will produce the next generation of your product, or whom you will be working with tomorrow, or next month. And you may just not know how you’ll solve some pressing problems—life will come to resemble my favorite exchange from Shakespeare in Love, where Henslowe assures Fennyman that, “Strangely enough it all turns out well.” When asked how, he replies, “I don’t know. It’s a mystery.”

Just remember that you will be making a conscious decision to integrate your personal and work life with your company. This decision brings both pros and cons. On the plus side, you have more control over your own destiny—and realize a more immediate link between your behavior and the success of your business. You enjoy greater ownership, both literal and psychological, over your work. You increase your opportunity for wealth. You have the chance to truly design the job you want, and to create a product or service you deeply believe in. You pursue knowledge and increase your expertise on an ongoing basis. You satisfy people.

Of course most of these conditions bring with them a dark side. Owning the company, for example, often results in just the opposite—feeling completely possessed in life by a time- and energy-sucking enterprise that leaves you with no other life whatsoever. Moreover, launching a company often deprives you of all those lovely perks and benefits that are second nature to established companies. (Are you prepared to fix your copier when it breaks down and do your own FICA paperwork?) Starting a company means abandoning all the fixed structures and the order they bring into your life. Finally, starting a company can be an invitation to loneliness—not merely because you give up the water cooler and other huddles of friendly support, but because you will be constantly asking strangers to validate your endeavor, and only sometimes succeeding.

For these reasons, and many others, launching a business just isn’t right for everybody. There’s nothing dishonorable about working for others, nor is there any shame in honestly assessing the toll that running a business takes—and deciding against it. Consider the choices made by Jim Collins. This former Stanford Business School professor had the opportunity to build a lucrative consulting company based on the success of his book Built to Last. After the book’s 1994 publication, Collins could have earned significant money consulting, training, and going on the lecture tour. Yet he chose to follow the precepts he laid out in his book. And so he defined his own mission and values, and chose his life accordingly. This meant being an educator above all else, which forced him to make a few key decisions.

First off, Collins decided not to hire anybody full-time. “If you start hiring people full-time and building a firm you build in fixed overhead, which means that you’ll have to sell something to support it," he says. And Collins couldn’t do this and remain aligned with his personal goals. “I don’t sell and I have no interest in selling,” he says. While he does see some clients and gives an occasional lecture, he has set ground rules for himself. He limits all clients to a maximum of three days per year. He limits his consulting or teaching activities to less than 25 percent of his time. And he devotes at least 50 percent of his time to the creative work that is at the heart of his books. The tradeoffs for him have been to forgo greater financial gain for a better realization of what he values most. “If I were to start a Built to Last consulting company I would have made five to twenty times what I made over the past five years,” he said recently. “Instead I am my own self-endowed chair.”

Collins understands that building a business calls for a massive commitment in terms of time, resources, and attention. Don’t kid yourself—starting a business is a huge leap, and it’s critical that you be clear about the demands that starting a business imposes on your life and on those around you.

What is a business?

Let’s start by defining just what a business is and does.

There are several ways to think about a business. You could define a business as the various activities and processes that you conduct in order to produce a bottom-line profit. This definition is perfectly acceptable…for an accountant or a professor. Yet the point of this book is to help you see an equally valid definition of a business that tilts this equation. You should also consider a business to be all those financial considerations that enable you to produce something you care about. Is your business the first, or second, type of entity?

This, of course, is a trick question. You must think about your business as both.

At its very core, a business is an organized entity that provides goods or services to customers in exchange for money, or some other form of currency. Ideally, eventually, and finally, consistently, it does so for a profit. That’s because businesses add value, through sweat or smarts or processes, or scarcity, in ways that customers can’t or won’t do on their own.

The range of value-adding activities is vast. You might apply your sweat and muscles to turn a pile of bricks into a sidewalk, or a mass of construction materials into a new room. You might use your thinking hat to ease someone else’s technical confusion. You might have a knack for turning scraps of cloth into clothing or quilts. You could be a natural matchmaker between companies and executives seeking jobs. The possibilities are as unlimited as the number of stars in the sky.

Regardless of how you add value, the word exchange forms a critical part of this definition. Businesses always exist in relationship to a web of customers, employees, partners, vendors, and other community members. Businesses by definition exchange and relate to a wide skein of people and organizations. We’ll explore the notion of customers, and selling, and meeting needs throughout this book. But it is critical that you understand the importance of your business as an entity that conducts social intercourse with other people and organizations. At this very early stage in your business, even though you are determining what it is you have to sell, be sure to hone your listening skills. One identifiable trait of most superb entrepreneurs is their ability to read other people.

As you begin to conceive of your own individual business, it’s important to think through how you will add value for your customers. Every business structure and type carries advantages and disadvantages. Companies with low barriers to entry (meaning that they are very easy to start), for example, are often great starter companies for novice beginners. Endeavors like cleaning houses, swapping collectibles, or consulting on something you know about all require few resources beyond what you have. This means you can get started easily and hopefully hustle your way to success. This inviting opening has definite drawbacks. First, anyone else can enter the field as easily as you did, giving you a run for the money. Second, you are probably relying more on your individual hustle than on the creation of something that is uniquely yours. While you can earn more simply by working more, your profits are ultimately related to, and limited by, your personal hours.

You can also pursue a venture that adds value at a much higher level than a simple lifestyle type of business. Yet this too has its pros and cons. There are pie-eyed entrepreneurs who have sought to build new satellite systems creating new communications networks. Great idea, and, should the venture work, it would be very, very hard to knock off by others. But of course one needs vast financial and organizational resources to make such a plan pay off.

What do you want from your business?

Figuring out what you want from your business requires you to answer one simple question first. What do you want out of life?

Sure, this question may seem a bit daunting. While it’s very helpful if you can come up with your mission in life, going through this exercise can sometimes become grueling and distracting. So for the sake of starting a business, let’s define this question in some specific ways. You should know enough about what you want to achieve in life to be able to make some important decisions concerning your business goals. In particular, you need to consider what you want, and need, your business to achieve for you.

There are several fundamental areas to consider. The first, for lack of a better word, is lifestyle. What kind of life do you want your business to accomplish for you? What type of people would you like to spend your time with? How much personal time do you need? Where do you want to live? What types of conversations do you want to have every day? What kind of objects do you want to handle, to learn more about?

Your particular business must match up to your own personal goals. Remember that dreaming of building the next Microsoft is not only unrealistic, but brings with it huge sacrifices. Many people want an enterprise that provides a living while keeping them hooked into something they care about deeply. “We didn’t want to set up a business,” says Tom First of their early days, “We wanted to set up a lifestyle—and the business came out of it. Initially the business was the vehicle for the lifestyle.” At the outset the two designed a simple enterprise that enabled them to live on the island, deal with folks they liked, and maintain a degree of control over their lives.

Your business ambitions should be aligned with your personal goals. Will you be happy to have a simple, profitable, though low-growth venture? If you dream about opening a bookstore, or making children’s sweaters, can you live with just one location or a regional business? How close to the operations of your business do you want to be (for example., do you want to be in the kitchen cooking the meals, or in the office running a string of restaurants?)?

Also, you should consider your aspirations. In other words, what do you want your business to help you achieve? Do you really want to change an industry, change the world? Is it critical that you design a business that addresses a social issue, directly or indirectly, large or small? What effect would you like it to have in the world?

And then, of course, you should consider what this business should do in terms of your financial goals. Remember that in all likelihood your business probably will not make you superwealthy. It will certainly not bring you immediate riches. The vast majority of entrepreneurs who leave steady jobs to launch companies take at least several years to earn their former salary; many don’t ever match their former income. Yet the value of doing work they love, or the satisfaction of ownership, or the equity they build in their company, are often more than compensatory.

Of course, realizing your dreams certainly could lead to riches. I wish you well in that regard. But here’s a simple point: Launching a business simply to become rich is almost certainly a path to failure. Shift the equation from simply trying to maximize dollars to creating value, and you will achieve financial success in the course of creating a good business. Most entrepreneurs who realize fortunes do so as a result of achieving a specific, and often nonfinancial, goal. I defy anyone to find a mission statement of Bill Gates that reads “to become the richest man in the world.” No, his Croesus-like wealth came as a result of his realizing a far more ambitious plan: to put a personal computer on the desk of every person in the world.

Certainly your company must generate enough income to support you and your family—if that is what you determine to be your goals. Perhaps you have a spouse or partner to handle that end, or maybe you have something to fall back on. The trick is to weigh your financial goals against your personal goals, and then conceive of a business that addresses both. The answer to the financial question always boils down to a far more important question: What do you really want from your business?

I can’t stress enough how important it is to be very clear about why you are launching this venture. For as you grow, you will always need to return to your simple goals as a compass.

What’s your business?

Businesses, even small start-ups, come in many different shapes and sizes. How about yours? Let’s try to think about what you would like to provide, and accomplish, with your business. Let’s start by looking at the four key ingredients of skills, passions, resources, and opportunities. Again, remember that businesses are not some abstract idea, but a viable enterprise for which you will serve as the heart and soul. And so you must now begin to take stock of what is possible for you.

There are four key areas for you to assess in deciding what type of venture is appropriate for you. Your passions, skills, resources, and opportunities. You need to assess each with an open mind and then think through how they might translate into a business.

As you go through these exercises, be sure to ask your closest friends and family to keep you honest, since you need others to keep track of where you have not been fully able to recognize hard truths. Unfortunately, a business will amplify your individual weaknesses, as your flaws will emerge miraculously as operational quirks and liabilities. So the best way to manage this element is to be open and out front with them from the beginning.

Of course the first person to listen to when starting your business is yourself. Your business begins when you identify your strengths and passions and they manifest as a business or service. As entrepreneur and author Paul Hawken states, “Your business must be an extension of who you are and what you are trying to learn and achieve.” So ask yourself: What do you love? What are you good at? What change do you want to realize in the world? Let’s look at how to take the first steps toward this goal.

Passions: Quite Simply, What Do You Care About?

What matters to you? What hobbies do you have? What do you want to change in the world? What do you enjoy doing? What do you go out of your way to learn about? What is important enough to interrupt your daily routine? What makes you cross the street? Look back over your life and identify the interests or callings you’ve pursued that have been meaningful to you. Think beyond simple hobbies or vocations and include personal themes or causes to which you’ve devoted your time and energy.

Try answering this question without any consideration whatsoever. Don’t edit. Just write down five things that really matter to you. If you can’t come up with five, that’s okay; perhaps you are absolutely certain about your top two or three. But do be open-minded.

Remember that you will be spending countless days and hours on the guts of your business, so it’s important to identify areas that compel you, offer opportunities for your own growth, and enable you to produce something that others will care about deeply.

Many great businesses arise from matters that the founders care passionately about. Founder and owner Wayne Erbsen of Native Ground Music grew a simple business from his passion for traditional American music. Originally a hobby of his, Erbsen launched a business gradually by recording and writing about music from the time of the Civil War and regions such as Appalachia. Working out of his home, Erbsen has produced CDs and books that form the basis of a company that sells more than $200,000 of products a year. “I’m tied to my products,” he says, “I’ve put my heart and soul into my product and it means so much more to me when someone calls me, I can say, ‘I wrote the book and I sang the songs, how can I help you?’”

Or consider Laura Peck Fennema, who was making a great living as a stock analyst for Rothschild, Unterberg, and Towbin in the late 1980s. By day Fennema would pore over data and write reports on communication equipment; at night and on weekends she would turn to her passion for concocting aromatherapeutic products such as facial cremes or bath remedies from natural botanical oils. Fennema would share these products with her mother and three sisters, who all encouraged her to find a broader audience.

And finally, in 1989, Fennema did. “I came upon a real defining moment: whether to spend my whole life focusing on how much money I could make, or how to spend it focusing on what I loved to do and had a real passion for,” says Fennema. After a year of preparation, learning the market and testing the viability of a venture based on her passion, Fennema took the leap. She launched Essentiel (spelled to reflect the French origins of the word) Elements in 1989, and today the company has more than forty employees and did more than $6 million in business last year.

Skills: What Are You Good At?

The categories are broad and range from technical chops in computer programming to a proficiency at writing zippy prose to more abstract personal skills such as being good at listening to people or understanding how to gather and make sense of information. Your skills comprise everything you have learned in school or in previous jobs, as well as any innate talents and capabilities that you have. This exercise is most akin to analyzing what you offer prospective employees; yet now you are thinking about applying these talents to your own venture.

Don’t focus simply on the most valuable skills you have, the ones that you believe will lead to the most money in the market. For now just write down everything that you believe you are good at. For Shari Fitzpatrick, her skill was making chocolate-dipped strawberries. That’s right--chocolate-dipped strawberries. She was making a fine living as a mortgage broker in Sacramento, California, partly because she would pamper her realtors with baskets of chocolate-dipped strawberries. The gifts became so popular that Fitzpatrick eventually began selling them out of her home, and then opened a shop in 1991. Today her company has four stores and a booming Internet presence.

Resources: What resources are readily available to you? Cash? Tools? Expertise? Contacts? Property? Fame? In many ways the crucial link between an idea and its realization are the resources that make it happen. You may just be able to derive a meaningful business from the resources to which you already have access. “People tend to overestimate the importance of the resources that they have—and underestimate the importance of the ones they don’t,” says restaurateur and serial entrepreneur Scott Shaw. In the next chapter we’ll explore how to realistically assess the resources your venture will need, and how you will gain access to them. But in the meantime, you should think about how your resources on hand may suggest a viable business.

Opportunities: Finally, think about what you could do immediately.

Perhaps you could ply the trade you now practice within a large firm on your own. Maybe you could tweak it just a bit, and launch a company on that. Try to answer this question. Say you are reading this book on the weekend. What type of business could you begin operating this coming Monday?

Is there a product or service that you need but can’t find somewhere? And, is this something you know enough about to provide to others? That’s what Ann Handley and Andy Bourland did when they launched a Web site named ClickZ in May of 1997. At the time, the two were just looking for a quick way to realize some extra cash. Bourland had been hit with an unexpected tax bill and needed supplemental income from his job as director of business development at the Internet company Andover.net. He and his friend Handley, a journalist who had written for trade publications but lacked Web experience, realized that they were both frustrated with the lack of information available on how to market online. They couldn’t find the type of site they wanted.

So they created their own. Handley and Bourland launched ClickZ as a Web site where people who worked on the net could share their marketing expertise. Because Bourland was familiar with the technology, he could quickly learn enough web design skills to present a rudimentary site; Handley tapped her skills as a freelance journalist to produce copy. Before long they had formed a community of people who did business on the Web; and by providing information from folks in the trenches, and providing a place where others could learn, the two had created a profitable company. The site grew slowly but surely, earning them a profit from the early days, and in 2000 they sold the company.

From idea…to company

Okay, now you must take these four areas and brainstorm how they might lead to a business. It’s likely that you have already begun to focus on one product or service. Yet before settling, go beyond literal thinking—try lateral thinking as well. In other words, don’t edit yourself. Just write down your ideas and possibilities without judging how good they are. You may surprise yourself with an opportunity you hadn’t considered.

Finally, begin sifting through your prospects and decide on your first choice. Don’t worry about whether this will be your absolutely final decision. Your business in all likelihood will evolve as you begin the process of testing its viability.

Congratulations, you’re in business

At this point you have defined your goals, and identified your skills, passions, resources, and opportunities. You have begun to match a type of business with your own goals and assets. You have acknowledged how much work lies ahead of you; and you have begun to think through the resources, in terms of cash and people and general wherewithal, that you will need in the months ahead. Now you should take the next steps. As you do, here are a few final thoughts.

Trust your heart

At this stage in your nascent venture, concentrate more on what you care about rather than simply what you are good at. Choose a path that is formed by your passions more than your skills. You can always learn new skills, but you won’t stop caring deeply about the things that really matter to you. Finally, don’t worry so much about the market for your product—yet. Start with what matters to you, and whether somebody else will buy it. You are your first customer. Once you are passionately convinced of your offering, then you will be able to persuade customers (or investors or partners, for that matter) simply and naturally.

Start Talking

The strength of your business will be fundamentally tied to the strength of the networks that you form. While you may not know everyone you need to get your business running, now is the time to begin to create formal and informal networks that support and nourish your venture. You begin these ties with a simple telephone call. Call ten friends, ten potential customers, ten competitors, ten vendors, ten potential investors. Ask them what they think of your venture. Ask them what they need for theirs. Ask them about what works for their company, and what has been their greatest failure. Ask why. Great entrepreneurs are naturally curious. They achieve breakthroughs and see things differently because they have more information at their disposal. Keep in mind that many successful people are willing to share what they know. So if you respect their time by preparing for an interview and limiting the time you will be surprised at the information you can glean from unlikely sources.

Get Started

According to research from Paul Reynolds, it often takes a lot longer for individual businesses to become viable, profitable enterprises than many people imagine. Some businesses take as long as seven years—yes, seven years—before showing sufficient profits for the owners to support themselves from the enterprise. Naturally, your particular business probably won’t take this long—but you should never assume that profits will come immediately. That’s why it’s important to get started now—to take those first steps toward putting your energies into a business context. You’ve begun to identify what you have to offer and merged with a thought toward how it adds value.

Moreover, you won’t necessarily end up where you start out. Professor Robert Ronstadt of Pepperdine University says the entrepreneurial process is guided by the “corridor principle,” by which the act of moving forward makes it possible for you to land in the right entrepreneurial place. “The learning process allows you to see opportunities you didn’t see before,” he says. So don’t censor yourself. Already we’ve heard of businesses such as Nantucket Nectars that began simply as a vehicle for two young college grads to live the lifestyle they wanted. Yet many of today’s largest corporations also started life as vehicles for their individual founders. Perhaps the most famous is Hewlett-Packard, which also grew out of the lifestyle choices of the two founders; the company produced a variety of different products before finding a successful and profitable market.

Congratulations. You’ve started your business. There are all kinds of indicators for when a business begins—when you give it a name, when you record the first sale, when you incorporate, or when you file a tax form. I believe that the fact that you have conceived of a business means that you are in business. Now let’s move on to thinking about what makes your business unique and valuable.

Who Wants to Be an Entrepreneur?

Here is a set of questions that will test your entrepreneurial mettle. Don't worry about being graded on your responses. I don’t believe that this comes down to a pass-fail distinction. But these questions are designed to help you examine whether you will find the entrepreneurial life to be a good fit with your disposition.

Can you afford the time, energy, and consuming distraction?

Are you comfortable making decisions?

Do you learn new skills quickly?

Are you willing to admit, and compensate for, your weaknesses?

Does selling come naturally to you?

Have you ever started a business before?

Can you live with rejection and loneliness?

Do you have personal and emotional support for the enterprise?

Do you mind giving orders?

Are you willing to brave uncertainty?

Do you believe, truly believe, in what you are about to do?

Are you prepared for your life to change completely?

And, if you answered no to every question on this list, are you still willing to start? Today? [back to top]

Should You Keep Your Day Job?

Tempting as it is to jump into your new business with both feet, it makes sense for most people to hang on to their day jobs, at least for a while. Your new venture may very well be an extension of your activities at your current job. Maintaining continuity helps in several ways.

First and foremost is simple cash flow. Your business may not be profitable enough to pay you a salary for some time, and the longer you can keep regular income flowing in, the more time and energy you will be able to dedicate to refining your product and developing loyal customers.

Along with a salary, of course, are benefits—which should never be taken for granted. Health insurance is a major expense, assuming you can even qualify for the same level of coverage you have. If you have a chronic health condition, such as high blood pressure or diabetes, you may have trouble finding coverage at all. Moreover, having your company withhold taxes and pay half your social security is a blessing. Start-up entrepreneurs are often shocked by their first year of taxes as a separate enterprise; having extra taxes withheld from your salary can soften the blow.

Finally, existing businesses often root you in the industry you want to be in, and keep you connected with potential customers, partners, and other supporters. For many small-business owners, especially in service sectors, their employer may be their first and most important client, or may even be an initial source of capital. And the right day job can be an apprenticeship as valuable as a graduate degree. While you’re working, you may also be able to take advantage of job-related training programs that will help you later on: professional continuing education, computer training, human resources workshops, and more

There’s no reason you can’t start a company while holding on to a job. Yet if you choose to do so, you need to be honest with your employer about your plans. “You have to have an agreement with your present employer, because starting a business is time-consuming,” says Ann Marie Stanton, who was able to start her own business as a Los Angeles–based antique jewelry dealer, while working as an assistant to HMS, an established dealer. Stanton kept close ties with her former employer after branching out on her own. “It was important not to burn any bridges,” she said, “and Harriet [her former employer] is a big supporter of mine” [back to top]

QUOTES

“Successful entrepreneurs do not wait until 'the Muse kisses them' and gives them a 'bright idea'; they go to work. Altogether, they do not look for the 'biggie,' the innovation that will 'revolutionize the industry,' create a 'billion-dollar business,'or 'make one rich overnight.' Those entrepreneurs who start out with the idea that they will make it big—and in a hurry—can be guaranteed failure. They are almost bound to do the wrong things. An innovation that looks very big may turn out to be nothing but technical virtuosity; and innovations with modest intellectual pretensions, a McDonald’s, for instance, may turn into gigantic, highly profitable businesses. The same applies to nonbusiness, public-service innovations.

“Successful entrepreneurs, whatever their individual motivations—be it money, power, curiosity, or the desire for fame and recognition—try to create value and to make a contribution. Still, successful entrepreneurs aim high. They are not content simply to improve on what already exists, or to modify it. They try to create new and different values and new and different satisfactions, to convert a “material” into a “resource,” or to combine existing resources in a new and more productive configuration.”

Peter Drucker, Innovation and Entrepreneurship, p. 34

“I think one of the things that has been a big learning experience has been to fess up to what your strengths and weaknesses are. That is a really hard thing to come to grips with. If you want your business to grow you have to really make sure that the people you are working with tell you what you are doing wrong. And you must be willing to listen. Otherwise you get stuck between wanting to grow your business and being willing to take the time to really address your shortcomings. And that is a big learning process. You can sort of fudge it in a big company, where somebody may pick up the slack for you. But in that large company you may not have enough leverage for that weakness to have consequences. In a small company it might mean everything.”

Roxanne Coady, owner R. J. Julia Bookstore in Madison, Connecticut

“I think that opening a business is a leap of faith. You are abandoning a lot of your old life, you can’t return to anything. And there is an unnerving aspect to it. Most small business owners think about that stuff, and forget about it. They aren’t necessarily triumphing over their fears—they are just setting them aside.”

--Gus Rancatore

“Persistence, and the act of believing in yourself is the most powerful and underrated attribute needed for starting a business. When you start a company everyone else’s mission will be to tell you you can’t do it. Competitors will beat up on you, investors will try to reduce your worth to get a better deal, and on and on. You need to have a reason to believe in yourself.”

Gary Hirshberg, Stonyfield Farm

“I don’t know how people design or plan every kind of business, but I usually think that any business starts with a product. It’s hard to think of a business where you shouldn’t build a great product before anything else. Entrepreneurs are cluttered with the concept that systems, business plans, margins, investors, advisors, press releases, etc. have something to do with starting a business up and running. BS. It’s all about a product and telling your story to the customers. If the product is great, it’s an easy story to tell. If the product sucks—it’s a hard story to tell. Refine your product and design it in a way that it can be reasonably available to your target customers and you have a business. Eventually you have to figure out the economics. But if your product sucks and you have all the economics figured out, you will have wasted your time (and your investor’s money.”

Tom First, Nantucket Nectars

“Business will occupy an enormous amount of your living, breathing hours. I don’t really know much about working for someone else’s company, but I know that I bring my work home with me every day of my life. It has its benefits and its problems. I suppose that employees can put it behind them when they walk out of the door. But as an entrepreneur you need to carry the little picture in your mind all of the time, but still be able to step back and look at the forest.”

Tom First, Nantucket Nectars

“Prior success, confidence, and the ability to sell are all absolutely vital to becoming an entrepreneur, and can be cultivated. The things that have helped me are a track record of prior successes, a well-rounded skill set, and a knowledge of the market.”

Desh Deshpande, Sycamore Networks

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THE BOOK

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Read the book reviews at Inc and 1-800-CEO-READ.

Read the publisher's press release.

Buy this book from Amazon.com.

Visit the companies that Tom discusses in the book

Hear a recent lecture by Tom on the Startup Garden

STARTUP KIT

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TOM'S WRITING

Just Managing – articles that Tom wrote for The Industry Standard and some Business Articles written for Inc., Fortune Small Business, Harvard Management Update, and other places.

Read about other books and web sites about starting your own business.

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