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Getting Your Big Idea Off the Ground: Minimizing the Risks of Entrepreneurship

A lot of people who want to start their own business have an idea, but really struggle with getting that idea out of the concept stage.

This is really hard for a lot of first-time entrepreneurs, and is also quite difficult when their big idea is something far from their area of expertise.

In my experience as a consultant to entrepreneurs, a former SCORE mentor, and a mentor at Workbox, the problem is usually that people can’t get past the “noodling” phase. And that’s usually due to one of three things: (1) there are risks, and that is scary, or (2) they think things need to be perfect before getting started– there is so much to learn about the new industry and learning it all that they are paralyzed, or (3) they keep thinking of new things, new angles, new bells and whistles, and can’t stay truly focused on the immediate tasks.

I’ll look at each of these groups, but today I’m focused on the first group.

It may be hard to recognize this at first. You want so much to do something different and your idea is so exciting that it’s hard to let go of it. Being an entrepreneur requires being comfortable with risk, being decisive (even if you are often wrong), and being comfortable stepping outside your personal comfort zone on a regular basis.

“I’ve Got a Great Idea, But Moving Forward is Risky!”

Honestly, some people don’t even realize they are worried about the risks.

And there ARE risks. Sometimes lots of them, in different shapes and sizes.

There’s the risks that are pretty obvious: The risk of investing time and money that may never pay off. The risk of leaving your job and the comfortable, predictable paycheck. The risk of not being able to pay your bills. The risk of finding another job if your venture fails.

But there’s also the less obvious ones: The risk that your idea wasn’t so great after all. The risk that you’re look like and feel like a failure if/when your new venture fails. The risk that you maybe don’t have the skills and mindset that it takes to build a business.

And lots of people are actually afraid of success. Will you be able to handle it if your business takes off and your life is completely changed?

If this sounds like you, one of the best ways to get started is to take baby steps — small, low-risk steps that move you forward without betting the house.

If at all possible, stay employed (either keep on with your current job, or find another similar one). Yes, this might be painful – but begin taking the many steps you’ll need to take to start your own business while you have cash coming in.

First, put together a simple business plan. Don’t make it into a doctoral thesis or a B-School case study! Just create a little project plan of the things you need. People are often surprised how long – and how expensive – it is to put in place many of the building blocks you’ll need. 

Brainstorm a name for your company, and research whether anyone else is using it.  Places to look here are the internet, domain name registration sites, and also your secretary of state office, which can tell you whether or not the name is already taken. 

If it is, go back & brainstorm some more.  If it’s free, establish your company and reserve the domain name. 

Do market research on your future competition. How do they distinguish themselves?  How do they market themselves? What do they charge?  You can do this on the internet, or even have fun posing as a potential customer.  What kind of a demand for your new business will there be?  Is there a unique angle you can take?

Once you’ve done that, there’s still lots & lots of pre-launch work to be done.  Spend your evenings, weekends, and lunch hours figuring out how to build a website, or find someone to help you. Begin building it. If you’re like most, this will take a lot longer than you think. 

If you need a brick and mortar space, find a good realtor to start gathering information on options for leasing.  Ditto if you need furnishings for your new space. 

What kind of support or help will you need?  Start spending time investing in those options (carefully, of course – if you’re worried about your current employer finding out), Imagine how you will announce your launch and how you will market, and start preparing all of the copy for that. 

Build a prototype of your product or service and a pricing model. Stick it out there — maybe with friends and colleagues — to see what resonates.

You get the idea. Your personal business plan will almost certainly highlight a number of tasks pre-launch that you can be working on in your spare time while you’re still working. The closer you can get to being ready to sell your products or services before you quit your day job, the shorter the time you’ll be without a good income stream.

Because almost all the entrepreneurs who have been on my show in the past and that I have worked with as clients will tell you: Everything takes MUCH longer and costs MUCH more than they anticipated.  And if you can stomach continuing to work in your current job for a bit longer – which hopefully will be easier knowing you have a plan and that there’s a light at the end of the tunnel – then you have just increased your odds of success exponentially. 

One last piece of advice that also comes from other entrepreneur clients and show guests: take the time to do some very thorough market research.  The business world is littered with failed businesses that had a really cool idea, but for which there is no perceived need. 

It’s the #1 reason new businesses fail, and it includes mis-steps like:  

Your pitch is off—it’s not resonating, or you lack credibility

  • Your pitch is off — it’s not resonating, or you lack credibility
  • Your pricing is off
  • You’ve mis-identified your target market
  • Your market doesn’t see the need or isn’t ready for your offering

As regular listeners already know, I had a distributor consulting business with a partner – helping companies find distributors that were better fits and setting up the distributor to sell more. 

We thought our target market was smaller companies, because they often didn’t have dedicated distributor managers.  But it turns out the better fit was really large companies that had the dedicated distributor manager.  Those were the companies with the resources to afford to hire us, and they were the ones with enough expertise in house to understand how much money they were leaving on the table. 

But, since we hadn’t really done any market research, we spent months and lots of time and money chasing the wrong market segment. 

So really take the time to do some thorough market research. Take it from me: you’ll save yourself a lot of time and headaches!

I Hate My Life & Want to Do Something Completely Different!

A lot of people want to become entrepreneurs but aren’t sure how to go about it- especially when their idea is doing something completely different than what they’ve done in the past. 

I’ve seen this as someone who counsels small businesspeople, as a former SCORE mentor of wannabe entrepreneurs, and as a mentor at Workbox. 

Many of the people I counsel are just starting out.  Some have lost their jobs, some have jobs but are unhappy.  A very large number of them want to start a business doing something completely different than what they have been doing. 

Some are civil engineers who want to run a restaurant.  Some are graphic designers who really want to build a handmade soap business.  Some are financial planners who want to start a daycare. 

When you’re unhappy where you are professionally, it’s really tempting to throw the proverbial baby out with the bathwater. Wouldn’t it be refreshing to start over, doing something completely new & different?

Well, yes! But, creating a new business is a really difficult thing to do. Doing a 180-pivot to do something radically different is very, very difficult to do, especially on your own. 

You probably don’t know much about the industry you’re hoping to move to. There is often a steep learning curve to learn the new industry and understand competitors, pricing, and what customers want. 

It is quite difficult to start and build a successful business when you already know a LOT about that industry.  You have little or no credibility in this new field, your contacts and network are not built here.  And your insights into the customer mindset are probably more limited, too. 

I attempted this a few years ago — twice, in fact, and failed miserably both times. And in both cases, my attempts were really just pivots, not 180-degree turns.

The first was my brainchild to counsel businesses on exit or succession planning. I was a practicing corporate lawyer with a solo practice, and wanted to expand my offerings — especially into consulting and away from the pure practice of law. I thought this was a promising option.

I went through an extensive training course and got certified. Unfortunately, like many of these courses, they were very focused on cramming in all the subject matter you need (and to be fair, there IS a LOT to consider in business exit planning). However, they spent almost no time teaching students how to create a business out of this new expertise.

And so, not surprisingly, I floundered. My client base consisted of small entrepreneurs and startup businesses. They weren’t interested in talking about exit planning — that was way too far down the road for them! I also had a couple of larger corporate clients, but any succession or exit plans were not discussed at the level of my client contacts.

I tried speaking at Rotary Clubs and Chambers of Commerce, and they were receptive to conversations. But I was not a trusted advisor to these businesses, and so those business owners were not really ready to have the kind of probing conversations that real exit planning requires.

The people who were somewhat successful at adding this to their practice were the financial planners and accountants who already had built relationships with many of these types of more mature small businesses.

But in talking to them, it turned out they really struggled as well. The real problem with this type of offering was that it took a LOT of conversations and a LOT of time to convince even those clients to consider grappling with these issues. Not surprisingly, most small business owners are so busy working in the business, which is their baby, that thinking of leaving it and moving on was not really something they wanted to consider.

A second flop was an attempt to sell record management software to healthcare companies. I was approached by a company who knew I had worked in several healthcare companies, and thought I might be a good fit.

I wasn’t. Yes, I knew my way around pharma and medical device and biotech companies. But my connections were in the regulatory and sales and legal functions.

And it turned out that all of the decisions to evaluate this kind of product were initiated and driven by the IT departments. Where I had almost no connections. And really no credibility with them. I didn’t have a background in software or IT.

I gave up after several months of unproductive attempts at meetings.

Moral of my sad stories? Even pivoting too far from your wheelhouse can be very difficult.

My stories of course don’t necessarily mean you’ll fail. By all means, you should explore your dream. 

But I would recommend considering perhaps finding a job working for a while in the market you want to pivot to, if that is remotely possible.  If you want to open a restaurant, work in one or two for a few months.  If you want to start a daycare, work in one.  If you can’t afford to do that full-time, then do it part-time or in the evenings. 

If that’s not physically or financially an option for you, maybe consider buying a franchise in the field you want to move into.  At least with a franchise, you will be buying into a proven system of building a business.  And some of them actually prefer a franchisor who doesn’t come from that industry, who may have pre-conceived ideas about the best way to do things.

True, franchises are not for everyone – they require a healthy down payment, and because they have a proven system, they often don’t have a lot of room for creating your dream menu or your unique t shirt designs. 

If you can’t afford the down payment now, maybe develop a 3-5 year plan where your goal is to start putting away enough to be able to pay that.

But if neither of those options sound reasonable to you – either because of other life commitments or because it doesn’t fit with your dream, then my personal advice is to go back to the drawing board. 

That doesn’t mean starting and building a business isn’t for you. But you may want to try doing something a little closer to your area of experience and knowledge. 

Consider whetting your entrepreneurial chops by first pivoting in a smaller way.  If you’re an accountant in a larger firm, try being a freelance bookkeeper, or open your own little accounting firm.  If you cut hair for a chain, consider opening your own shop. 

Here, you likely already have the necessary credentials.  You know how this slice of the business world works.  You’ve seen from your past employers and competitors what works and what doesn’t.  You may even be able to convince some of your existing clients to follow you.

But whatever you do, think it through carefully! You’ll likely save yourself a lot of headaches and money!

The Savvy Entrepreneur: Critter

Jordy & Jahna McNamara took a novel approach to starting their app company, Critter.  They decided to quit their jobs, pack up everything and take a cross-country road trip in a van.  Their road trip allowed them the focus and freedom to finally start the business they’d dreamed of.

Traveling for months out of a van isn’t the easiest way to start a business.  But it got them out of their old routine and into a new one. And they were disciplined enough to work hard almost every day on their new business.  It also had the unexpected benefit of getting lots of in-person customer feedback, with a geographic and demographic breadth that would be hard to do any other way.

Critter was born because Jordy & Jahna wished there was an easy way to summarize everything their dog Lucy needed for various caregivers.  They found themselves writing the same information over and over on scraps of paper.  They knew there must be something easier.

Creating a new app and a company around it was right up their alley – Jahna has a software background, and Jordy a consulting and business background.

The app launched in October 2022, and for now is free.  But they are exploring “freemium” tiers and other options to help monetize the business.  Their long-term goal is to create a suite of apps that would also include pet professionals as well, such as vets, groomers, and boarders.

It’s a fun story about how to navigate the hassles of living in close quarters and moving constantly while trying to start a business together.  It’s the ultimate challenge in being flexible.

But then, that’s what the couple says is one of the keys to a successful road trip, but also building and marketing an app from scratch – have an overall plan, but stay flexible!

Click on the arrow to listen to this fun interview!

How NOT to Pivot

Today I’m baring the soul of one of my (several) startup failures, in the hopes it will save some of you out there from becoming a statistic like me. 

I’ve talked before about the CB Insights research, looking at the reasons startups fail. They analyzed more than 100 failed startups, doing a detailed port mortem.  While the reasons businesses fail are probably inter-related,they concluded a whopping 42% of startups failed because there WAS NO MARKET NEED.  

This was BY FAR the largest reason stated for business failure.  29% said they ran out of cash.  I would have thought this was the main reason businesses failed, but that actually happened in less than 1/3 of the cases.  23% failed because they didn’t have the right team.

Now, almost HALF of businesses failing because there was no market  for their idea, their services, or their product is a pretty discouraging statistic.  Especially because it means that we as the entrepreneurs got too excited by our own idea.  And, it’s usually the most easily fixable thing.  Market research & market testing can often be done pretty inexpensively, if there’s a will to do it & be objective about it. 

But many of us are blind anyway.  And that was me several years ago, when I decided to pivot my offerings at Globalocity, my little consulting business.  I had previously focused on international expansion assistance, especially with helping companies find & manage foreign distributors.  But business was slow.  And meanwhile, I had connected with someone who had spent his entire career on indirect channels to market, but was at an inflection point [note: in hindsight, I should’ve asked a lot more questions about that inflection point…].  We struck up a friendship, and he suggested we collaborate together and go to market with a comprehensive “indirect channels to market” consulting offering. 

We knew we had the right expertise with our combined experience.  And we were convinced there was plenty of demand.  After all, we knew anecdotally that lots of companies were unhappy with their current distributors, and there was lots of research showing this as well.  Plus my new partner had consulted with many companies over the years, helping them improve their distribution programs.

But what we NEVER established was (1) whether people would pay to have someone come in and help them improve their distributor network, or whether it was just a minor irritant that they’d rather just leave alone (2) if they would pay, how that offering needed to pitched and packaged (3) who our ideal clients were (were they startups? Big companies? Global companies?) & in what industries? (4) how to make our combined expertise seem like the “go to” solution and (5) how to find these ideal clients. 

But while we had lots of leads and discussions, we could never close on any significant engagements.

So, we committed the cardinal sin I mentioned earlier – we never established there was a market demand for OUR services as we went to market with them. 

And In looking back, we also both committed another couple of cardinal sins – the wrong business model and also the wrong team. 

I realize now I was counting on my new business partner — with his long career of working in this area and having many, many successful consulting engagements – to be able to help answer all these questions and find clients. 

But that turned out to be a bad assumption, for 2 reasons:  (1) he had never sold these services directly, and (2) he had no real interest in selling these services directly. 

His business model over his long career was to align with a very large consulting firm, and do all their training and workshops on distributor management. 

They organized all these trainings, and my partner showed up, delivered the trainings (which were quite popular), and then the consulting company was nice enough to let him scoop up any consulting engagements that followed from the trainings. 

It was a VERY successful biz model for him for a long time.  But it wasn’t a sustainable model.  The big consulting company found the workshops harder and harder to fill as corporate travel & training budgets dried up, and eventually, they got out of that business altogether.  And they were out, my biz partner was completely out, too (hence the inflection point in his career that I should have explored further).]

I also had not realized how very different that business model was.  For one, he had the cachet of the big consulting firm’s name behind him. 

Second, they invested all the time and resources into organizing these workshops, allowing him to show up, collect a nice fee for the training, and scoop up any business that was generated. 

And, their lead generation process and the high cost of the seminar ensured that these people were pre-screened to be most receptive to making further investments in ther distributor network. 

Best of all, it allowed him 3 days (for which he was already paid good $ as the trainer) with these clients to help them fully understand all the work that was needed to implement a good distributor program, and positioned him as the natural go-to expert. 

We had none of that infrastructure.  We tried doing lots of blogs and webinars and podcasts, but it wasn’t enough education to push people over the buying hurdle.  We didn’t have the cachet, and instead of people primed to pay, we got a lot of people who mostly wanted free advice .  And ultimately, my partner really didn’t pull anywhere close to his share of the load, because he never wanted to be on the selling & marketing side – he only wanted to be on the “doing” side. 

You might wonder why we didn’t go to another training company, and we did think about it.  But the large conference/workshop industry is a shadow of what it used to be, and these companies no longer allow their trainers to scoop up any consulting opportunities that come out of the training.

And, my new business partner was firmly convinced that we didn’t need them — that his name and experience and success landing great paying clients would translate out on his own. Unfortunately, it didn’t. He could convert the leads once they were in his class, but it turned out he had absolutely no idea how to find and nurture leads along a pure consulting pathway.

Eventually, we ran out of cash and ideas.  And so, we feel victim to ALL of the top cardinal sins I mentioned earlier. 

It was a wonderful learning experience, but was a financial disaster, and was very discouraging to boot.

And all of these were preventable, if only we’d done some market testing, and if we had both had a clearer definition of roles.  May you learn from my mistakes!

Do You Have the Wrong Team?

I’ve shared in another blog posts the story of one of my startup failures. 

I’ve seen so many business partnerships splinter that I thought it was worth looking in more depth at the important aspect of putting together the right founding team.

When I decided to pivot my offerings at Globalocity, my little consulting business.  I had previously focused on international expansion assistance, especially with helping companies find & manage foreign distributors.  But business was slow.

  And meanwhile, I had connected with someone who had spent his entire career on indirect channels to market, but was at an inflection point [note: in hindsight, I should’ve asked a lot more questions about that inflection point…]. 

We struck up a friendship, and he suggested we collaborate together and go to market with a comprehensive “indirect channels to market” consulting offering. 

On the surface, it seemed like a good partnership. Between us, we had enormous expertise on successfully finding and managing distributors and agents.

And we knew from experience that lots and lots and lots of companies struggle with this.  After all, we knew anecdotally that lots of companies were unhappy with their current distributors, and there was lots of research showing this as well.  Plus my new partner had consulted with many companies over the years, helping them improve their distribution programs.

But what we NEVER established was (1) whether people would pay to have someone come in and help them improve their distributor network, or whether it was just a minor irritant that they’d rather just leave alone (2) if they would pay, how that offering needed to pitched and packaged (3) who our ideal clients were (were they startups? Big companies? Global companies?) & in what industries? (4) how to make our combined expertise seem like the “go to” solution and (5) how to find these ideal clients.  And while we had lots of leads and discussions, we could never close on any significant engagements.

So, we committed the cardinal sin I mentioned earlier – we never established there was a market demand for OUR services as we went to market with them. 

And In looking back, we also both committed the 3rd cardinal sin – the wrong team. 

I realize now I was counting on my new business partner — with his long career of working in this area and having many, many successful consulting engagements – to be able to help answer all these questions and find clients.  But that turned out to be a bad assumption, for 2 reasons:  (1) he had never sold these services directly, and (2) he had no real interest in selling these services directly. 

His business model was to align with a very large consulting firm, and do all their training and workshops on distributor management.  They organized all these trainings, and my partner showed up, delivered the trainings (which were quite popular), and then the consulting company was nice enough to let him scoop up any consulting engagements that followed from the trainings. 

It was a VERY successful biz model for him for a long time.  But it wasn’t a sustainable model.  The big consulting company found the workshops harder and harder to fill as corporate travel & training budgets dried up, and eventually, they got out of that business altogether.  And they were out, my biz partner was completely out, too.   {hence the inflection point in his career that I should have explored further]

I also had not realized how very different that business model was.  For one, he had the cachet of the big consulting firm’s name behind him.  Second, they invested all the time and resources into organizing these workshops, allowing him to show up, collect a nice fee for the training, and scoop up any business that was generated.  And, their investment and the high cost of the seminar ensured that these people were pre=screened to be most receptive to making further investments in ther distributor network.  Plus, it allowed him 3 days (for which he was already paid good $ as the trainer) with these clients to help them fully understand all the work that was needed to implement a good distributor program, and positioned him as the natural go-to expert. 

We had none of that infrastructure.  We tried doing lots of blogs and webinars and podcasts, but it wasn’t enough education to push people over the buying hurdle.  We didn’t have the cachet, and instead of people primed to pay, we got a lot of people who mostly wanted free advice .  And ultimately, my partner really didn’t pull anywhere close to his share of the load, because he never wanted to be on the selling & marketing side – he only wanted to be on the “doing” side. 

You might wonder why we didn’t go to another training company, and we did think about it.  But the large conference/workshop industry is a shadow of what it used to be, and these companies no longer allow their trainers to scoop up any consulting opportunities that come out of the training.

And, my new business partner was firmly convinced that we didn’t need them — that his name and experience and success landing great paying clients would translate out on his own.

Unfortunately, it didn’t. He could convert the leads once they were captive in his class and he could explain to them in detail what they needed to do to find the right distributors and manage them more effecitvely.

But it turned out he had absolutely no idea how to find and nurture leads along a pure consulting pathway. His idea was to try to send out tons of cold emails and play the numbers game.

My big idea was to do webinars. We had fun doing several. I learned a lot about how to organize and present the information. Most of all, I learned a lot about how to promote webinars.

We got several leads, but most of them weren’t really qualified leads. We had many, many conversations, but never closed on a single lead.

Eventually, we ran out of cash and ideas.  And so, we feel victim to all THREE of the top cardinal sins I mentioned earlier.  Pretty much a disaster. And all of these were preventable, if only we’d done some market testing, and if we had both had a clearer definition of roles.  And so, that ends the tale of one of my several disastrous new business ventures!  May you learn from my mistakes!