Remember your first year as an entrepreneur? Or would you rather forget it? That was when you let yourself get wet behind the ears and learnt many lessons, mainly through trial and error. Ouch, some things still hurt!
Here are some lessons all new entrepreneurs- can benefit from. They are lessons learnt the hard way.
1. Don’t take investors just at their word
Investors or would-be investors may get very enthusiastic about your start-up idea. They will tell you it’s a winner and would be happy to back it. So you relax. The money is going to come rolling in. Right? Wrong (in most cases). These investors, you discover to your dismay, don’t part with funds so easily. They have a fund of excuses and will probably leave you high and dry. Don’t bank on their promises till you find out what’s coming into the bank.
2. Make your pockets deeper
You have little or no experience when it comes to managing money. In your earlier job, taxes were deducted from your salary before you got to touch it. Now you get a gross amount and it looks good. Till you discover that you are paying out more than you expected, much much more. Whatever expenses you expected to incur, just double the amount. You’ll be paying out of your pocket for a lot of things you didn’t consider and everything adds up. Those meetings at the coffee shop, for instance. They can make a serious dent.
3. Count twice as many chickens before they hatch
Someone tells you he has a ready market for your idea. All you have to do is come up with the goods. Well, you think, if he takes on one-third of your inventory, you’re in business. But then the possibilities begin to fall out and you have to come down to earth with a thud. Please double the number of chickens you count before they hatch.
4. Read the fine print again and again
You need to be specific about your contract or terms of agreement. Lots of clauses and conditions may slip past without your paying close attention to the fine print . You may discover later (when it’s too late to make corrections) that you haven’t specified things like a kill fee for a project that doesn’t go through, haven’t made it clear that you need 50% upfront and so on. Sometimes a client wants you to get the work started without a contract. That’s just a formality, you are told. Don’t do it, however attractive the assignment. Get it in writing.
5. Those who haggle over the price will keep doing it
People don’t change all that much. And when you find someone haggling over the price, be warned. Your price tag stands to be lowered and there goes your cushion. You may even end up taking a loss. There’s a big difference between haggling and negotiating. Every time you discount your rates because you need the work or were trying to be nice, causes stress. Set a floor price under which you won’t go. Then quote a price significantly higher than that figure.
6. Strike a work-life balance
You may be tempted to put in 16-hour days but then your life outside work is bound to go for a toss. You will find yourself neglecting your family and friends and may find out, perhaps too late, that the price you paid is just not worth it. Steel must go through fire to be strengthened. Don’t fret over the mistakes you made in that first year. And move on.