Starting your Own Business is Both Rewarding and Scary as Hell.

Starting your Own Business is Both Rewarding and Scary as Hell.

By Steve Rhode |
Published 
11.26.2007 |
Starting a Business
Advice from the frontline

Starting your own business is both rewarding and scary as hell. Last
night I heard an interview with a successful businessman who said that
unless you had some personal financial risk in the endeavor that you
really weren’t an entrepreneur, but just a manager of someone else’s
money.

Recently I met David Fisher out of Boston, Massachusetts. David is
starting a new company. What gives this even more of a stressful
“pucker factor” is that his new company requires so engineering and
manufacturing. David has kindly agreed to share his experience in
starting his company so far. I can’t wait for us all to follow along
with his adventures and see how this all turns out.

So enough from me, let’s hear from David.

I recently started a very small guitar pedal company, and am in the
process of getting everything set to launch our first product: the
Delay Daddy. What it does is relatively unimportant for this article,
but the general problems that I have encountered and am working to
overcome are applicable to most startups. Ideas do not simply turn
themselves into working products and profitable companies overnight or
without a lot of effort.

Although often sought out, there are no businesses that you can
start which will require no effort, investment and risk but yet yield
large profits. I do not have all of the answers, but would simply like
to share with you my experience so far, and give you a glance as to
where I am at.

The first issue that I ran into was lack of time and difficulty
scheduling. I have a full time position as an office manager at a web
solutions consulting firm in Cambridge called Jazkarta. I don’t think
that anyone when starting a business should simply jump ship at their
primary job. One thing that I will mention several times is honesty to
yourself. Lack of honesty to ones-self is often a tragic flaw in first
time entrepreneurs. Be honest and humble and realize that most
businesses do not turn a profit, and many more never get off the
launchpad. So as they say, "don’t quit your day job." Also, don’t risk
more money than you are willing to lose. Risk works both ways, either
success or failure.
   
I had so many other ideas and things
that I was hoping to pursue. Before any of them looked like they were
going to get off the ground I was looking at burnout already! It is
very possible to bite off more at a single time than you can handle,
and I was doing exactly that. I pared down to what was most important;
Jazkarta and the creation of the Delay Daddy and made sure to dedicate
time to each of them.

Be honest with yourself and make sure you are OK with the potential
loss of sleep, social life, significant others, and free time when
starting a business. If you aren’t fine with that and want to stop
working at 5pm then stop right now and reevaluate your priorities. As
it stands, I am working about 85% of my waking hours. I’m fine with
that, and don’t have any obligations asides from Jazkarta and my
company. That may or may not work for you, but you should figure that
out very early in your planning.

One of the major differences in the Delay Daddy that is not as
common with internet startups is the need for a manufacturing process
and distribution, with this comes a need for money. Money always ends
up being an issue for startups. It doesn’t grow on trees, and if this
is your first startup then there’s likely not a huge amount in your
bank account to bootstrap with. Costs rack up quickly. First of all,
get potential costs under control and start planning. I am a huge fan
of business plans for use as internal tools. The business plan is
another place that you need to be honest with yourself. Do not assume
that you can reach every potential customer. Being overly optimistic
will kill you here.
   
You not only need to figure out what
to do with the money, but of course raise it! Assuming you aren’t
independently wealthy then you’re going to have to look outside your
own checkbook. You should try to raise an amount that is required to
make it work. Don’t try to shoot for numbers that build in a fat
paycheck for yourself. The primary sources are friends, family and
fools. Banks can lend you money of course, but without an outstanding
credit record and/or significant collateral then they probably won’t
touch you. The government Small Business departments are a great
resource and you should meet with them, but regardless of what you have
heard do not expect to leave there with a check.

For the Delay Daddy we have outlined two major stages of funding
needed for the near future. The first is for R&D, for which I have
hired a consultant. The R&D here isn’t rocket science, so it is
fairly inexpensive in the scope of things and for this stage a friend
and I are bootstrapping it and shelling out the money ourselves. I was
attempting to do the R&D myself, and I got a bit done, but part of
our execution came down to the fact that I simply didn’t have the
skills to do it as well as possible and we had to find some outside
help. Realize that you may too have to reach out to people in order to
get your company running. It’s rare for one person to be able to do
everything, nor should you. We have also started relations with an
attorney to help us organize everything and write contracts where
needed.

Our second stage of funding (which we have yet to locate fully) will
fund our manufacturing for the first run of the Delay Daddy pedals.
While we are still waiting for the final numbers from the consultant we
estimate this round to require approximately $20-30,000USD. For this we
are considering traditional short term loans, bootstrapping where
possible, and micro investments from individuals. Finding this stage is
one of my biggest worries at the moment, as it would be horrid to have
a product developed and ready to go, and yet have no way to produce it
in any significant quantities. It should be noted that we are producing
a very high end unit, and are not looking to mass produce them in large
quantities.

We have opted for marketing and advertising on the cheap for the
moment, meaning I am taking out no TV/print ads or banner advertising
online. I find it personally much more effective to outreach
individuals directly and grow things slowly. The use of online
discussion forums, blogs (my own and involving others), and even using
Twitter are all in the plan for reaching our target market. So far,
things are looking good. Depending on your product/service you might
have to go with something traditional, or something totally different.
I should also note that I am an active member of the music community,
and on an almost daily basis interact with other musicians and gear
manufacturers.

So you’ve got the time, you’ve got the money, and you have an idea.
Well the product still isn’t going to make itself! This still requires
work on your part. Laying out realistic timelines, goals, and planning
are key. Constantly review what you’re doing and why you have or
haven’t met goals. Using  various project management methods is a great
idea. Don’t let yourself get sidetracked. Stay on task, and do what it
takes to launch.

For us, the execution has required a great deal of planning
regarding the product, frequent and clear communication with our
Electrical Engineer consultant, searching for funding, looking for
innovative and inexpensive marketing strategies and balancing day jobs.
It’s not rocket science, but neither is running a marathon. The
description is easy, but getting it done is another matter entirely.
Also realize that unlike a marathon however, the race doesn’t end at
the product launch. You have to keep going and you have a company now
to run. I have met dozens of people that love starting up things, but
hate running companies. Paperwork, sales, bookkeeping, vendors and
supply chains can be a drag but it’s part of running the business.
Realize that at the same time, you are probably the best person to do
these things. It’s fairly unrealistic to expect that you’ll just start
something and then "hire someone to run it", as that hire doesn’t have
your same goals and vision, plus the fact that such a hire will almost
certainly bring any profit to zero quickly. Delegation is great, but it
takes time before you can fully justify it. That first hire can be a
scary thing and carries a lot with it.

At the end of the day you should look at your startup not as
something that will make you money, as it likely won’t, but as
something that working towards will make you happy. The main reason
that I am building the Delay Daddy is that nothing like it was out
there and I want one! It just so happens that other people want them
too. You have to be willing to sacrifice a lot to make it happen. You
might end up losing little or nothing, but if you’re really putting
everything into it then you have to be willing to lose it all too. I
hope the best for you in all your ventures.

David Fisher works lives and works in Boston. If you would like to reach David (possibly to fund his second stage) email him at Tibbon@gmail.com or read his blog at http://whatisnoise.com

He can be reached on Twitter at http://twitter.com/tibbon
Information on the Delay Daddy can be found at http://delaydaddy.com

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