In the summer of 2009, my wife and I caught the entrepreneurial bug and started a company without any prior business experience.
We’d never hired anyone. We’d never had anyone pay us for a product or a service. We didn’t know anything about small business accounting or finance. We didn’t even know how to write a business plan.
I had some limited knowledge about search engine marketing, but knew nothing about marketing in a more general sense. In hindsight, it’s understandable that friends and family were skeptical when we told them about our business.
A few of them, mainly the ones with business degrees, pointed out that we hadn’t gone to business school. I got a little irritated by this, and somewhat offended. Looking back, they had every reason to be skeptical, and it probably only bothered me because it was based in truth.
But in some ways I think my lack of knowledge was an advantage. Many an entrepreneur has said that if they’d known how hard it was going to be, they may not have started a company in the first place.
In the end, I learned a lot of what I needed to know through experience—some of which was fun, and some of which was painful.
See Also: How Traveling Helped Me Prepare for Startup Life
From backpackers to business owners
Six months before starting our business, my wife and I moved to Buenos Aires, Argentina with no solid plans, no place to live, and no jobs.
We’d backpacked through Argentine Patagonia a few years prior, and during that time heard great things about Buenos Aires. Neither of us had ever lived in a big city, and in 2008 we felt ready to cash in and try something new. We also wanted to get our Spanish speaking skills from conversational to fluent.
We’d done some traveling before, and felt that trying to get everything in order beforehand was what stopped people from traveling at all.
The key was to hit the ground running
We found a place to live in a couple of days.
Within two weeks I landed a remote copywriting job that eventually turned into a job managing a collection of tourism-related websites. In the meantime, my wife began teaching at an English school in our neighborhood.
In the process of managing the websites, I learned everything I needed to know to build, maintain, and market a basic WordPress site. Suddenly, I realized that I had the basics to start a business. So a few months after I started my job, I quit to work on my own ideas.
The first few were media businesses, which I had some experience with as a former reporter. Maybe those would have eventually paid off, but I had no runway—no money to burn through while I waited for the business to become profitable. I needed something that made money right away.
So I tried a few other things. One of them was a project I worked on with my wife that offered classes in English as a second language via Skype. Just a few weeks after we finished the website, this business had paying customers coming from Google search and free Craigslist postings.
Within a few months, my wife went from teaching a few classes via Skype part time, to teaching full time, to hiring a pair of teachers to help her keep up with demand. Suddenly, we were business owners.
See Also: Bplans Quiz: Are You Entrepreneur Material?
5 business lessons I learned that I wish I’d known sooner
I like jumping into both travel and business with both feet, and not too much forethought.
But looking back over my years building and running a business, there are several things that would have saved me a lot of time, money, and heartache while helping the business perform much, much better.
1. Contracts are your friends
This is something I’ve seen and personally experienced with multiple companies. When a company first gets going, everyone is excited, full of good intentions, and ready to contribute to the effort. There’s a lot of positive energy in the air.
You might feel like a bit of a wet blanket when you start pushing people to hire a lawyer and write up contracts or an operating agreement. But trust me, your future self will thank you.
First off, the process will unearth potential problems. Your team might think they see eye-to-eye when the company is still forming. But when you start to put expectations down on paper, differences will come up. Most likely you’ll find that everyone has some assumptions, and they are all a little different.
I discovered this firsthand when I contracted a software developer to build a system for the English teaching company that allowed classes to be purchased and scheduled via web application. After several meetings with the developer, I was ready to get moving on it. But I thought it was important to establish that the company owned the software, not the developer, and sheepishly told him I needed a contract signed that stated such. This developer had founded businesses before. He knew what he was doing, and told me that he wouldn’t start without a contract that made it clear exactly what he was supposed to do.
In working on the contract with him, I realized that there were a lot of basic things we hadn’t yet agreed upon. For example, what defined completion? Was it when he handed us a working version, or did it have to operate successfully for a certain number of days? Did it need be bug-free? Part of our agreement was that if the company ever sold, he’d receive a percentage of the sale. But what if he quit, or if we had to fire him—would he still get a percentage?
Resolving these questions before work began was easy. In fact, looking back over our comments in the 2013 Google doc where we hashed this out, I can see we had fun doing it.
I had the opposite experience at another point in the life of this business, when we had to work out a contract after work had already begun. I can’t go into details, but I can tell you that it was awful. Everyone had a different idea of what should have been in the contract, and no one was happy with the final result.
Writing up a contract is especially important if you’re working with co-founders. Find a well-recommended lawyer and work to write a solid operating agreement and you’ll pave the way to a much happier future.
See Also: Creating a Business Partnership Agreement
2. Your job is to get good at finding and hiring people smarter than you
When I started, I knew enough about internet marketing, SEO, and maintaining a website to get the company off the ground. It took me years to realize that my ego had gotten attached to my ability to do these things. I tried to learn more about SEO and running a WordPress site while covering other important roles. But I never learned enough to stay on top of it, and as a consequence, the site employed 2009 SEO tactics well after they lost effectiveness, and I ended up with a WordPress site that remains a bit of a hairball.
Looking back, the smarter move would have been to hire someone that really knew what they were doing with SEO, marketing, and web design, so that we could optimize and keep up with the times.
Be honest with yourself as your company grows. Are you really the best person to do the jobs you’re doing? Do you have the time to do them well? If not, it’s time to get good at finding employees and hire an expert.
See Also: 13 Ways to Ensure You Always Hire the Right Person
3. Accept and adapt to the inevitable surprises along the way
Oftentimes our business seemed too good to be true. We loved what we were doing and worried that somehow we’d missed some threat to its existence that would bring it crashing down.
We typically envisioned technologies that would make language learning obsolete, or scenarios where a big competitor with deep pockets got into our space and crushed us.
But we were shocked when, in December of 2014, the price of oil dropped, which caused an instant recession in our two biggest markets, whose currencies lost half their value overnight, essentially doubling our dollar-based prices for our customers. Sales dropped dramatically in a matter of weeks, and still haven’t gone back to their 2014 high.
I realize now that we were looking at possible threats to the company in the wrong way. We had tried to imagine the specific changes that would threaten our business. Instead, we should have accepted that change is always coming. Your best bet is to remain watchful and nimble. When things change, accept what has happened and come up with a plan for dealing with it.
Because we felt so blindsided, it took us more than a year to fully come to grips with the new economic realities the company faced, and make the changes that came just in time to keep it running. Faster acceptance and adaptation to this would have surely saved some stress and money for the company.
4. Keep your customers close
When I was younger, it seemed to me that the goal of management at most companies was to get as far away from customers as possible.
At the big box stores and fast food chains where I worked, the only time managers talked to customers was where there was a serious customer service problem, at which point a manager would appear, immediately give in to the customer’s demands, apologize, and go back to their office.
But when I was working as a reporter in 2007, I covered the purchase of a local ski resort in Montana by business mogul Bill Foley. On his first day visiting the mountain after the purchase, he scanned lift tickets. Scanning lift tickets is the most entry-level job there is at a ski resort, and here, the guy who had just spent millions of dollars purchasing a majority stake in the company was doing it. It quickly became obvious why. He asked nearly every person that came through his line if they were enjoying their day at the resort. If they were, he asked them what the best part was. If they weren’t he asked why.
Later on, he told me he that at every company he’s run, he’s spent time working the jobs that put him in direct contact with customers, to learn about their real problems and joys. He didn’t want this kind of info secondhand—it was too important.
This made a lasting impression on me, and I still like helping out with customer service because of it. If you make it part of your job to interact with customers, you’ll get ideas for features, fixes, and marketing messages that you would never have considered if you had insulated yourself in an office.
See Also: How Should You Handle Unhappy Customers?
5. Take the right attitude on competition
When I was actively running my company, I stressed about competitors. Each time we found a new one, I could feel my face go red. I’d get angry about it, and go off on all the reasons we were better, while secretly worrying that their marketing, or business model, or feature suite was better than ours.
Now that I’ve worked with more seasoned entrepreneurs, I can see this was the wrong way to handle it. It’s better to approach competitors with curiosity, rather than fear and anger. When you find a new competitor, study them closely. One fruitful area to look at is features. Do they offer features that you don’t? Do people use those features? Have they abandoned features that you’re considering? Why did they abandon them?
Oftentimes you’ll be able to find the answers to these questions in forums, customer reviews, or interviews with the founders. The information you glean may help you decide which features you should work on, or how to build them properly.
Don’t forget to also take time to look at marketing channels. Know where your competitors are getting their customers from and determine if it makes sense for you to be competing there. I didn’t learn this until I’d moved into an advisory role at the English teaching company, and began work for a new startup, where they kept a constant eye on competitor marketing channels. Every time we’d find a new competitor, we’d ask where they’re getting their customers from. Several times, we found new channels that we hadn’t yet considered.
I learned all of these lessons the hard way, and I’m sure that an MBA or any business management degree would have taught me a lot of this. But my philosophy toward business is a lot like my philosophy toward travel, and really life in general. While I think some planning is a good idea, I’ve seen a lot of people talk and talk about starting a business, traveling, learning a language, and so on, and then continually make excuses for not starting it because they don’t have everything perfectly lined up yet.
If planning your business, or anything else, is stopping you from starting it, I’d say that you should start some form of the business first, even just a simple version of it. When the business is actually live, you’ll suddenly find yourself hungry to learn and make plans. I hope the information I provided above will help you if you decide to jump into business with both feet, or already have.
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