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8 Things Every New Business Owner Should Know

Hang out a shingle. Open up shop. Be your own boss. It will be easy they say. They say you can make your own hours and you can work as little or as much as you want. You will love it. Now, you just have to figure out what it really means to do it. If you have decided to take the plunge into business ownership, I congratulate you. It really is rewarding and fun most of the time. There will be times when you just wish you could punch out at 5:00 and leave all the worries to someone else, but if you are truly wired like most entrepreneurs, you’ve never really been able to do that anyway.

I am now in my sixth year as a business owner. Before deciding to go out on my own in business, I worked for several different companies of all shapes and sizes in several different industries. Straight out of high school, I worked as a temporary employee in a large insurance firm in the research department. I left there and switched gears completely working for a couple of small family owned businesses. I left the shirt and tie behind and donned a uniform with my name on it while working in a garage installing public safety equipment. During that time, I attended college part-time and spent some time as a substitute teacher and mowed lawns for a summer. While in Law School and for a couple of years after graduation I worked for a growing law firm. Each of these experiences played heavily in my mind when I decided to take on the task of opening my own law firm. Now, as an Estate Planning Attorney who owns his own firm, I have a unique perspective when talking and working with other small business owners. Here are some things I have learned along the way:

1. The learning curve has no curve.
It is straight up. On day one as a new business owner, I was immediately humbled to find out that while I knew my practice area very well, I was way behind in the arena of running a business. During my first chat with my CPA, he mentioned debits and credits, balance sheets, and double entry accounting and told me to get a copy of QuickBooks. I soon figured out that was a software program and not a self-help book to be found at Barnes and Noble. I majored in history in college and minored in political science. The only accounting class I had ever taken was a half-semester class in high school. I was immediately lost. If that wasn’t enough, I then had to learn about trust accounting and how business checking accounts were different from personal checking accounts. The first year was often overwhelming especially as I took on employees.

2. Management is a lot harder than it looks.
First, let me say I have an amazing staff working with me. I love working with each and every one of them. As a manager, I have learned that each person requires a different style of management. Some people love to be given free reign and the ability to be creative; others thrive on structure and direction. Some employees are motivated by tangible rewards while others live for verbal recognition. The learning curve on management never stops. There are differences based on culture, gender, generation (yes, we love the millennials) and the list continues.

3. Running your business will cost twice as much as you expect and the money will come in five times slower than you expect.
My good friend and mentor, CPA David Plemons, taught me that. I remember the first time he said that to me, I thought, “No way, I am going to work on a budget and I know what my expenses will be.” I have never enjoyed being humbled and I especially don’t like telling David that he was right, but he was. Part of the steep learning curve is learning what to do one month when all of a sudden the revenue has stopped pouring in. With this in mind, pay yourself first. Let me repeat that point, pay yourself first. No one will work as hard or sweat nearly as much for your business as you have. You have all the risk and therefore you should reap the rewards. When the business budget gets tight, you are likely going to pull from your own resources or borrow money in your own name anyway. The more you have put away for your own retirement and security, the easier that burden will be to bear.

4. Get help!
In the last six years, I have worked with multiple business coaches, attended various classes on leadership, accounting, and joined peer groups. There is no way you can know everything you need to succeed on your own. Take the time to get to know other professionals who have been down the same road you are taking and can help you avoid some obstacles they ran into. People love talking about their business and sharing their success stories and talking about how they overcame failures.

5. Have a plan.
While it may be impossible to plan for every situation, there are certain things that every business owner needs to plan for. Make sure there are people you trust that can step in and keep your business afloat for a few weeks if you are injured. Have a team of professionals that can step in and help. Every business owner should have a relationship with each of the following: CPA, Business Banker, Estate Planning Attorney, Business Attorney, Business Coach and Insurance Broker. If you have a brick and mortar location, there are others you need to know as well.

6. Understand what the best type of entity is best for you.
Should your business be incorporated? Should you just be a sole proprietor? Should you enter into a partnership? What about a Limited Liability Company (LLC). Unfortunately, there is no one size fits all entity for business ownership. Each entity has its advantages and disadvantages. Make sure that you take the time to talk with your professional network before deciding on which entity to take on. Please do not rely on google, Siri or Alexa.

7. Make sure your loved ones know the plan.
If you are married, make sure your spouse knows whom to contact for the business in an emergency to make sure business continues.

8. Keep learning.
Being successful in business means continuing to learn new things and step out of your comfort zone every single day.