Five Things I Wish I Knew Before Starting My Own Business

After 13 years of successfully navigating the intricacies of the corporate rat race, I could no longer resist the allure of the Siren’s song calling me towards entrepreneurship and the desire to start and run my own
business.  After all, leaving the 50+ hour work weeks, the never-ending bureaucracy, the numberless meetings, and the constant pressure from above, to start the next Google, Amazon, or Tesla is as American as apple pie and the 4th of July. 

Unfortunately, just like in Greek mythology, that Siren song lures many intelligent, hard-working, unsuspecting victims from the comfort and security of their corporate jobs, only to dash their hopes, their dreams, and their 401Ks on the rocky shores of entrepreneurship. 

According to the U.S. Bureau of Labor Statistics Business Employment Dynamics, 20% of new businesses will shut their doors by the end of year one.  By year five 50% have failed and by year 10 only 30% are still in business. Considering those odds, you might be better off cashing in that 401K, heading to Vegas, and laying it all down on a hand of blackjack.    

Notwithstanding the discouraging data, more than 500,000 new small businesses will open their doors next month, and that is a good thing because small businesses employ over 50% of the working population and generate most of the new jobs in the U.S.

My Journey into Entrepreneurship

It was 17 years ago that I left my job as a mid-level executive for a Fortune 50 company to run my own business.  My reasons for taking the leap of faith were probably similar to many who decide to branch out on their own.  I had grown tired of working for someone else and wanted to be my own boss.  I wanted to control my schedule and have the flexibility that I didn’t have in my corporate job.  I was ready for a new challenge and was confident in my abilities.  

Looking back now, it amazes me how naive and ill-prepared I was when I started.  Many of the assumptions and plans I made were wrong.  I have made way too many bad decisions over the years to count, especially early on.  You might assume that by staying in business for 17 years I have made it past the risky phase that all new businesses go through, but I don’t see it that way.  I think I share the view of many small business owners that I am only one bad decision or one missed opportunity away from being a statistic.

Over the years, friends, family, and colleagues have asked me what it is like to run my own business.  Most have only a casual interest and I am quick to point out the pros and cons of running your own business.  However, on occasion, someone with sincere interest will want to know what steps they can take to start their own business. 

There are free resources available from the SBA and many other organizations for those wanting to start a business.   They can help you with your business plan, help you network with other entrepreneurs, find potential sources of capital, and so on.   I would strongly encourage anyone wanting to start a business to take full advantage of those resources.  

What is harder to find are the candid lessons from those who have started a business.  Much can be learned both from those who have succeeded and those who have failed.  While some lessons are specific to certain industries or markets, many apply to anyone considering starting a business.

Listed below are five lessons I have learned over the years that would have saved me a lot of time, money and frustration had I known them before I started my business.

Lesson 1: Starting a Business to Have More Flexibility or Free Time is Most Often a Myth

Lesson 2: You Can Never Have Too Much Capital

Lesson 3: Know When to Cut Your Losses

Lesson 4: Don’t Overbuild on the Anticipation of Growth

Lesson 5: No One Cares as Much About Your Business as You Do

Lesson 1: Starting a Business to Have More Flexibility or Free Time is Most Often a Myth

One of the most cited reasons for starting a business is the independence, freedom, and flexibility running your own business will provide.  While ultimately you may get to the point that your business is self-sufficient and you have more flexibility in your schedule, the journey to get to that point is often filled with long days (and nights), 7-day work weeks, and very little time off. 

After starting my business, I quickly learned that the 0-hour work weeks I had in my corporate job had turned into 60-to-70-hour work weeks with the new business.  In addition to the long hours in the office, I found that I was never away from work.  I was checking and replying to emails at kid’s events, on dates with my wife, at church, and more.  I went to bed thinking about the business and woke up thinking about the business.   I had been through busy, stressful times with my corporate job, but there was normally some downtime after.   With the new business, there was never any downtime.  If the business was growing, I was busy managing the growth.  If the business wasn’t growing, I was busy trying to figure out how to grow it. 

In addition to the long hours, I also found that it was difficult to take any time off.  I missed the four weeks of PTO I accrued each year with my corporate job.   In the 17 years I have been self-employed, I have never taken a disconnected vacation where I wasn’t answering emails and phone calls and dealing with all the fires that pop up.  When I see the automated “out of the office” email replies from my friends, telling me that they will not have access to email for the next two weeks I am envious.

Lesson 2: You Can Never Have Too Much Capital

We have all heard stories of someone starting a business in their garage with $1,000 in capital and growing it into a billion-dollar company.  While it is technically possible, you are probably more likely to win the lottery than to replicate that level of success with such little capital. 

The top reason new businesses fail is lack of capital.  In layman’s terms, they run out of money.  I am often asked how much money is required to start a business.  I used to answer that question by explaining it is impossible to say without knowing a lot more about the business you intend to start, your business plan, etc.  Now I simply answer, “more than you plan on.” 

It is possible to start a business with very little capital.  For example, with a small investment, you can open an Etsy shop, or your own Shopify website, and sell items you make at home.  Millions of people do that every
year.  They are often called side gigs because they don’t generate enough cash flow to allow you to quit your day job.  

When I left my corporate job, I was not looking for a side gig.  I needed a business that would eventually support me and my family and hopefully grow into much more. At the time, my wife didn’t work outside the home, so my salary was the only income we had.    I knew I needed enough capital to not only fund the business for a couple of years but also to provide our family with things we had grown accustomed to like a roof over our heads and food on the table. I was leaving behind a nice six-figure salary and for this venture to make sense I needed to eventually replace it with similar income from the business. 

I was fortunate in that I had saved enough money that I didn’t need to borrow any of my initial capital.   That was a good thing because I learned early on that banks love to lend you money when you don’t need it, but aren’t interested when you really need it.  It is nearly impossible to get traditional financing when starting a
business.   That is why so many new entrepreneurs rely on savings, 401Ks, family, and friends for their initial investment. 

Fortunately, the capital needs I had forecasted in my business plan were fairly accurate.  I had enough money to get the business up and running and to support my family for the first few years.  I assumed by year three I would be able to start taking money out of the business.   However, what I didn’t account for was the capital I would need to grow the business.  Watching your business grow is both rewarding and expensive.  By year three I realized that I couldn’t pull profit out of the business because I needed it to fund more employees, more inventory, more equipment, larger office/warehouse space, etc.   Fortunately, by then I had a long enough track record that the banks were willing to lend me money.    I hated taking on debt, but it was either that, or give up some equity, or stop eating.  I ended up opening revolving lines of credit at two banks to allow me to fund my growth and still pay myself enough to live on.

Lesson 3: Know When to Cut Your Losses

For the 50% of businesses that will fail in the first five years, knowing when to cut your losses can be very difficult.  I think most entrepreneurs are smart, confident, and driven people.  You need those qualities to be successful. However, without the proper checks and balances, those same qualities can blind us from the reality of a situation.   There is a tendency to think that with just a little more cash, a little more time, or a little more hard work, we can accomplish anything.    When the alternative to success might include a major hit to your ego, a financial loss for you or for those who invested in your company, or even bankruptcy, it is extremely difficult to throw in the towel, even when you know you should. 

Even successful companies have the same challenge.  After the success my company experienced the first few years, I decided to launch a new product line.  A couple of years later I launched a third.  The second product line did okay but was never as profitable as our original line.   The third product line was never profitable.  I was convinced that I could make it work and continued to put time and money, the two things business owners never have enough of, into the product line.  Eventually, we stopped trying to grow the third product line, but not before wasting a lot of time and money that we could have used elsewhere.

To help avoid this problem, I would encourage any new business owner to set up a “board of directors” to offer unbiased advice and help.   It doesn’t need to be anything
formal.  Just pick a couple of close friends or family members that you trust and then meet with them regularly to talk about your business and encourage them to question everything.   Pick people that will not tell you what you want to hear but instead will question everything you do.

Lesson 4: Don’t Overbuild on the Anticipation of Growth

This lesson might also be called “Don’t Outdrive Your Headlights” or “Don’t Get Out Over You Skis.” When you start to experience some success and growth with your new company, it can be easy to assume that growth will continue at the same rate in perpetuity.  It’s great to be optimistic, but when deciding where to invest your limited capital and limited time early in the life of your company, you should be cautious and be willing to endure a little short-term pain or inconvenience.

Premature scaling or expansion is another one of the main reasons new businesses fail.  The internet is full of examples of companies that tried to expand too quickly and are no longer around.  For a small start-up,
it may not be adding new locations but other types of overbuilding that can put your business at risk.    As you start to grow you might think you need more office or warehouse space, a new CRM system, a new oven, or a new “fill in the blank.”  There is nothing wrong with making those investments but just be sure you really need them right now.  “It would be nice to have that” is not the same as “we must have that.” 

Even if you have a long history of growth, just keep in mind that things can change.  After starting
my first company in 2005 we had solid growth the first few years.    Then the great recession hit in 2008 and for the next few years sales declined.  We scrambled to adjust to our new reality, and we came out of the great recession lean and mean.  We started seeing strong growth again from 2011 to 2013.   In 2014 we experienced a different type of challenge.  Amazon was growing like crazy, and we were starting to lose business to sellers on Amazon.   We pivoted and started selling our products on Amazon as well.   We quickly regained the market share we lost and even more, but with half of our revenue now on Amazon, we needed a lot less warehouse space, order packers, and customer service agents.  Through attrition and reduction of warehouse space when we renewed our lease, we were able to right-size our company but took some time and money for that to happen.  When you are a new company, you may not have the luxury of time and money to make those adjustments. 

Working on Vacation

Lesson 5: No One Cares as Much About Your Business as You Do

I realize that this one may seem obvious, but I have to remind myself of this regularly.  I have had some great employees over the years.  I loved hiring recent college graduates and training them on the intricacies of our business.   Most of
them enjoyed their jobs and it was rewarding to watch them grow and develop but I was constantly reminded that it was just a job for them.   

As a business owner, when an emergency comes up you drop everything else until the fire is put out.  You might miss family events, vacations, and other activities.  However, you can’t expect your team will do the same thing.  Sure, they will make sacrifices on occasion, but they aren’t going to put your company ahead of everything else in their lives.

The same principles apply to suppliers, vendors, and lenders.  There is nothing more frustrating than when your website goes down and your hosting company tells you they are aware of the issue but don’t know when it will be fixed. 

I even experience this with my own family.   At least a few times each month I get the evil eye from my wife for taking a call during our date night, skipping a family event to deal with an issue, or missing dinner for the fourth time that week because I couldn’t get away from the office.  After 17 years of being self-employed, I still haven’t figured out how to balance work and family life and I doubt that I ever well, but that is a topic for a future post.


These five lessons are only a few of the many things I have learned while running my own toys/games business and then my corporate gifting business over the past 17 years.   While I think these apply to any business, there are many other industry-specific insights I have picked up over the years.     If you are considering starting a new business, I would strongly suggest you speak to several entrepreneurs, preferably in the same industry you are considering, and be sure you speak to both those who have been successful as well as those who are no longer in business. 

While you will never learn everything you will face when starting a business, you might learn the one thing that will make the difference between success and failure. 

I would love to hear from other small business owners in the comments below.    What are the lessons you have learned that you wished you knew when you started your business?