A therapy session you can learn from
The perceived wisdom is that you often learn more from your failures than your successes. That could perhaps be true. What I do know is it is pretty darn hard to rake back through the embers of something you put a huge amount of effort into for what seemed like relatively poor rewards to try and learn those lessons.
Nobody wants to admit it, but old failed businesses are like old lovers; they look better in the rearview mirror than up close and personal.
I never intended to become my own boss, though I always wanted to. My chance came thanks to the capital rotation toward renewables and an oil price dip during the global pandemic resulting in budget cuts and layoffs. Like thousands of workers in the oil and gas industry, I was offered a voluntary redundancy package. I embraced it as a chance to do what I had always wanted, become my own boss and try my hand at starting an energy consultancy. I approached several former colleagues, and we agreed to build a partnership. Over an 18-month period, we managed to get the venture off the ground. We built a modest revenue stream through contacts at some mid-size companies looking to outsource what they had recently done internally. Unfortunately, despite some success, my colleagues were tempted by the lure of regular employment, and we decided to close the business. Until now, I haven’t taken the time to digest the lessons I learned from the experience.
Writing an article like this is probably timely and a form of therapy; I might need a handkerchief by the time I reach №10, so wish me luck.
My startup journey began after leaving a cushy corporate job where a paycheck came every month, come what may. Don’t underestimate the value of a regular income. Spending savings to try and get something off the ground is scary, and we had given ourselves a finite amount of time to try and establish an income from the business.
If you are an entrepreneur, you are, by definition, an optimist. This is a good thing, maybe even essential, but it is also a blindspot; it certainly was for us and our cost and time estimates were a long way off. I suggest using the rule of 2, take your first estimate of what it will cost and how long it will take to establish revenue and double it. And that is probably still too conservative.
Pick your team wisely. My instinct was to build a team with great technical skills for the consultancy business we were attempting to start. The balance should have been toward the sales and networking end at the start and then rebalance toward technical as we began to pick up customers, or better still, contract work out.
You won’t have the means or the time to try and retrain people, and with the odd exception, technical experts generally make terrible salespeople and vice-versa. They will probably tell you that themselves if you care to listen. The best people are the relatively rare pinch-hitters who can step into any role at short notice and do a great job instantly or be clever enough to bluff through it quickly, particularly those who can network effectively.
On the same theme — get a good admin person, someone who can keep accounts, deal with bank accounts, registrations, certifications, licenses, and the myriad of paperwork associated with starting a business that you have no idea existed until you start one.
Getting any of this wrong could set you back months, and you definitely can’t do it all yourself.
Let’s assume you have a business plan. It is the bare minimum. If you don’t, it’s a bit like skinny dipping; if the tide goes out, you are going to get found out, and when you do, it will be painful. But anyone can write a business plan and 99% of them are not worth the paper they are written on.
Road-test it with people you trust, ideally people with some real business experience, and I don’t mean corporate business experience; I mean small business owners who have been there, seen that and done it. They will have essential knowledge of what insurance policies you need (and don’t need) and how to succeed with credit applications. We had a really good advisor who saved us thousands more than once by avoiding committing to spend before the business was mature enough.
One of the mistakes I made was not setting out to give the business enough time. In retrospect, when we decided to fold, we had completed a few contracts and picked up some regular clients, but there wasn’t enough revenue to cover a salary for everyone.
There were the makings of a business there, and with a little re-organization, we could perhaps have salvaged something.
However, businesses need capital, perseverance, a decent product, and time to thrive. Usually, startups have buckets of perseverance, generally have a reasonable idea, or they get nowhere, but time and capital are the culprits that often kill the dream.
We did this, and when it came to dividing profits, it was straightforward. Having a shareholder agreement upfront means you are assuming the business will succeed. I believe it is essential that you commit to paper who owns what in the event of that success, especially if family is involved (sorry!). Don’t think solely about revenue but also consider intellectual property.
Money can drive wedges through the closest of friendships, luckily, I don’t have personal experience of this, but I know plenty that do.
I have reached number 7 now and am starting to get a bit weepy. Maybe I will call up my ex next? On second thoughts, hell could freeze over before that happens.
My point is that failed businesses (and relationships!) are an inevitable part of life. We all process failure or loss differently; some consider failure like trauma and need to process that before they can move on, and others jump back on the bull. Whatever your way of dealing with loss will probably be reflected in how you deal with a failed business. Unless you are incredibly fortunate, you will probably fail before you succeed — be prepared for that but don’t hold back.
I was in my mid-forties before I started my business. This doesn’t leave much time to build toward retirement unless you are going to be successful immediately.
I recommend starting your entrepreneurial journey when you are young. That’s not to say older entrepreneurs can’t be successful; they can and are. It’s just that you may have fewer shots on goal to achieve your first success. When you are young, your risk tolerance is much higher, you have less to lose, and your creativity is probably at its peak. You can build in time for a couple of failed take-offs and still have time to build a successful brand. Young entrepreneurs may be trading off gaining experience, but that assumes the accumulation of useful and relevant experience is linear and role-specific, and it probably isn’t. How many people in the corporate world are just going through the motions and have stopped growing?
For me, I enjoyed the spoils of a comfortable corporate career. I had probably become stale, and starting a business was the breath of fresh air I needed; I just wish I had done it sooner. Time is finite, and there will be compromises along the way, though, make clear choices around family & relationships. Don’t just neglect this part of your life.
Have no regrets. Life is short. Working for yourself is fun, probably some of the most fun I have had in a career context, and the downsides are probably never as bad as you think they might be.
At worst, you can go back to 9–5, but as with anything in life, there are no guarantees. My advice is to go for it!
I quickly learned that working 12–14 hours a day is unsustainable and will wreck your health, your relationships, and possibly both.
Don’t underestimate the power of getting outside help to do small pieces of work; there are incredible resources out there at quite reasonable rates. For example, we got a professional brochure on the services we were offering and that paid for itself multiple times over with the volume of work it generated. Often, local government will offer services for free to startup businesses, like tax and grant advice, and the staff are usually incredibly knowledgeable.
There is no recipe for success, but you can certainly learn from others on a similar journey. You can read, plan, and strategize.
But there is no substitute for going out and giving it a go.
Looking back at the experience, I learned a lot about my risk tolerance, my ego, and what I was good at and not so good at — all useful things you can benefit from whether you ultimately succeed in business or not.
Good luck with your venture, and enjoy the ride; I certainly did.
Author: Ger Moniker