If you’re about to retire and your nest egg is not enough to sustain you, you may want to consider starting your own business. Many retirees still want to work, but they’re disgusted with the corporate hamster wheel. If you’re still energetic and healthy, starting and running a business could prove a great source of income — and personal satisfaction.
But getting your business up and running doesn’t work the way the Kevin Costner character’s ambition worked in the 1989 film Field of Dreams. The chances are slim to none that “they will come” just because you built it. You’re mantra will have to be more along the lines of “Welcome! We’re still building! But c’mon in, get comfortable and bring your friends!” And forget about the snake-oil salesman’s admonition from Blake, the Alec Baldwin character in Glengarry Glen Ross — “always be closing.” Your marching orders had best be “always be marketing.”
While it’s true many businesses fall by the wayside because they’re under-capitalized, now is not the time to plunder your retirement funds and hit your brother-in-law up for a loan. Hugh Hefner might have started Playboy from his kitchen table with family money. But that spectacular American success story is more the exception than the rule.
You’re more likely to fail in your own small business if you’re not alert to certain minefields along the way. Here are the most important ones. Ignore them at your peril:
Minefield 1 — You Don’t Know Your Business’s True Start Date: Years ago, I made a sales call on a group of high-falutin’ consultants in Washington DC. They were all ex-CIA people, and had set up shop as “risk analysts” for hire to big companies looking to expand internationally. They had an impressive sign on the door, gorgeous furniture, gorgeous carpets, and — I must admit — a gorgeous receptionist. Oh, one small detail: they had no clients — yet! Hey, no problem! They assured me their reputation was well known, and once word got out, they’d be hugely successful.
Their problem was they were out of business before they ever got into business. They were gone in 60 days! Your true start date for your business is not when your lease begins, not when the movers show up with the furniture, and not when you show up for work. Your true start date begins when the check clears for your first customer or client. All the trappings — the furniture, the stationery, the business cards, the computers — are all that, just trappings. Until that first customer or client shows up, you’re kidding yourself if you think you’re “in business.”
Minefield 2 — You Think You’re Obliged to Offer Something Innovative: If a product or service is that original or unique, chances are no one needs or wants it. As Dan Kennedy points out in his introduction to Michael Masterson’s The Reluctant Entrepreneur, “…more entrepreneurial fortunes revolve around the use of known, proven processes for advertising, marketing, sales, management, and finance applied to a good idea, than are born by the new, radical, revolutionary, romantic Big Idea.” Kennedy is also quick to remind us that Disney didn’t invent the amusement park, Amway didn’t invent soap or multi-level marketing, and Starbucks didn’t invent the coffee shop. Think instead of a cheaper or better way, or a new twist on an old product, and your business will be better poised to last.
Minefield 3 —You don’t have a clearly defined offer or value proposition: To advertise that you offer consulting services is not enough. That generalized claim would be a complete waste of advertising budget. To say that you offer consulting services in the field of finance is still not enough. To say, on the other hand, that your firm works closely with investment management firms to minimize compliance risks gives you a much tighter and more workable definition. While it at first seems counter-intuitive to narrow your product or service offering and clientele, you enhance your firm’s chances for success — and your credibility — by maintaining a clear and disciplined focus.
Minefield 4 — You Don’t Converse with Your Prospects and Customers: There’s an old joke about a CEO of a dog food company. He calls a meeting with his top people. He asks them who has the best marketing in the business. Everyone in the room shouts “we do!” He then asks “who has the best price in the business?” Everyone in the room shouts “we do!” Finally, he asks “who has the best distribution set-up in the industry?” Everyone in the room shouts “we do!” After a moment of silence, he then asks everyone “then why aren’t we selling more dog food?” One brave but soft-spoken soul calls out from the back of the room: “because the dogs don’t like it!”
You may tell yourself a story about what your customer needs. But if your customer tells you another story, you’d better change yours — pronto! Co-authors Nathan Furr and Paul Ahlstrom of put it more eloquently: “Which would you rather do — talk to your customers now and find out you were wrong, or talk to your customers a year and thousands of dollars down the road and still find out you were wrong?” Sage advice.
So think clearly about the business you’d like to start. Take careful note of the above minefields. With some planning and discipline, and a bit of courage and determination, you can be well on your way.