I’ve spoken to several people in the past who have strong reason to be disenchanted with the approach of certain agencies and organisations towards entrepreneurs. Their stories have made me angry. If you don’t want to find yourself among those who have sacrificed relationships or homes on the alter of someone else’s agenda, please please bear the following in mind.
1) An economic development agency or organisation’s agenda isn’t necessarily an entrepreneur’s agenda. They’re judged on employment figures and on financials. So you might find yourself encouraged to take on staff too early or to take out loans to fund big launches or ambitious plans because that enables them to tick a box and it makes their spreadsheet look good. Make sure you’re moving along your own path at a sustainable pace for YOU. Don’t let anyone force your hand. In short, beware of poor advice with a hidden agenda behind it.
2) Big numbers of new starts look good on agency books. Be absolutely certain of your idea before you jump in. Don’t find yourself railroaded into product development or sourcing suppliers overseas or attending exhibitions or getting graphic designers to come up with a suite of stuff – heck, don’t even get a pop-up stand – until you’ve done your own research and clearly and objectively identified that your product / service has a chance.
Look closely and objectively at the financials: how many of these things are you going to have to sell in order to make a living, much less build a business? What are the costs involved? How long will it take before you see a return? As one contact said “I was waiting for someone to tell me that it was a bad idea, but I felt railroaded into continuing”
3) Profit is more important than turnover. The agency might be able to report on a nice big number in your turnover column (and take credit, of course, for supporting your success), but what are you left with when the bills are paid at the end of the day? Margins, people. Margins.
4) Winning awards means nothing. Seriously. Don’t fall into the trap of believing the hype. Plenty of new-starts that have a clutch of fancy trophies on their mantelpiece are hanging on by their fingernails, or simply no longer exist 18 months later. Plenty of people spreading ‘delighted and humbled’ PR about being nominated for an award have put themselves forward, often paying to do so AND forking out for an expensive dinner ticket to the grand event to boot. Don’t be fooled. Awards do not a healthy business make.
5) Investors are often important for business growth, with the individuals themselves becoming advocates and trusted advisers as well as the source of financial support. At the other end of the spectrum to these’ business angels’ however, is a cynical breed of sector ‘mentors’ who offer their ‘experience’, ‘network of contacts’, or ‘introductions to investors’ in exchange for a big old chunk of your business. Look carefully at what’s being waved enticingly in your face and consider what it’s worth to you. Whilst the point is ‘it’s not how much of the pie I give away it’s how big does the pie get with this person’s investment/help?’ … consider how much of your business you actually are prepared to give away, and in exchange for what.
NO-ONE seems to be asking entrepreneurs how their own business fits into their life or financial goals. If you’re three years in, working all hours and still not able to pay yourself, this doesn’t feel like a good place to be. If you’re mentally prepared and financially ready for that sort of long haul, then that’s fine – for those who are juggling jobs or even given up the 9-5 in order to step out into their own business, this can put a serious strain on family finances (step forward the banks, who will be very quick to move in and offer a loan with the roof over your head as collateral) .
Think carefully and fully from the very beginning: what’s in it for YOU. What do YOU need out of this? What are YOU prepared to sacrifice in order to achieve your business dreams? This is YOUR life, after all. And it’s YOUR business.
In short, I’ve seen too many entrepreneurs treated as a commodity by support agencies and organisations. For every success story, there are intelligent risk takers who were prepared to step out of the ordinary in order to make their mark have been misguided and poorly advised in order to meet other people’s agendas, and then left to die at the roadside.
Agencies need to square up to themselves and be more open and honest about their own agendas. Entrepreneurs must have their wits about them in order not to fall foul of wolves in sheep’s clothing.
(from my article originally posted on Linked In)