5 Business F Ups That I See Everyday
On Nov. 16 at Creative Loafing Space in Tampa, I'm emceeing FuckUp Nights Vol. 5 along with John "Dipset" Jacobs. The event is like a TED talk without all the self-congratulating. I refer to it as a REAL TED talk. Entrepreneurs speak about how they f-ed up along their journey. We learn much much much much much more from failure than from stories of success. Look at Trump - the self promoting, "success machine" was bankrupt four times and now he's our president. Wait, this isn't the best metaphor.
This business, Tocobaga Consulting, and our Tampa Bay comedian co-op, Cigar City Comedy, are in-kind sponsors for the event. No one asked me to write this sponsored content. I thought it was appropriate for FuckUp Nights Vol. 5. Plus, I miss writing.
In the last 18 months (thanks to using a tag team of nerd apps like Harvest/Evernote), I have heard 250 startup ideas and/or immature (read: <3 yrs) small business plans. I don't attend pitch-a-thons or startup weekends as a judge or investor. This is all face-to-face interaction with wantrepreneurs.**
This listicle** consists of 5 business fuck ups I see everyday. Most startups or small businesses launch because the owner/operator is very skilled at the primary service and/or product. The theme of this article is "know thy self".
1. Create A Business Plan...Even If You Don't Know What You Are Doing
I would ballpark 95% do not have a business plan. In this case, I would even refer to a business plan as a cocktail napkin strategy. The business plan is usually in the business owners' noggin, and that's scary if the business is more than a one person operation.
Business Plan Basics:
- Mission Statement
- Core Values
- Financial Projections & Benchmarking
- Exit Strategy
These are the basics. Writing a business plan can become Snowball Task: a task that seems so overwhelming and daunting you never start working on it.
2. Hire A Business Attorney
Sites like Legal Zoom, BizFilings or SunBiz.org (Florida only) will not help you as much as you think. You need a real-life human being business attorney that will help you handle the following:
- Corporate Docs (every business needs them)
- Company Services Agreements
- Employee/Independent Contractor Agreements
- Operating Agreements
Below is our business attorney, Steve Fantetti of Fantetti Legal, on our Sweat Equity podcast on his day off answering Should My Business Be Incorporated Or A Limited Liability Company.
Do not hire a friend in law school. Do not hire an attorney that does not specialize in business. Do not find a legal document template online and attempt to adjust for your business. Hire a business attorney.
3. Hire An Accountant
I loathe accounting. I tell our accountant, "please explain all of this to me like I'm 5." Like the legal assistance, reading tax code is about as fun as reading the Bible. Actually, the Bible has a story with tons of violence so that is somewhat entertaining. Tax code is like reading programming code. If you run out of ZzzQuil, read either of those.
- Profit and Loss
- Income Statements
- Balance Sheet
- Cash Flow Statements
Our accountant, Michael Messina of Morgenstern, Phifer and Messina walked me through distributions and even the proper way do tasks in Quickbooks.
4. Find Mentors
When I started this firm, I called my former Auburn Entrepreneurship & Family Business Management professor, Dr. Michael Kincaid, to ask if he would be someone I could call when I see a large swell coming. We are a small-to-medium (SMB) consulting company. What if a large franchise, firm or brand were to contact us?
I also asked my former bosses from Dimesional Fund Advisors and Sola Salon Studios to be in the hopper if I get stuck on the day-to-day operations or planning. Additionally, I asked successful, experienced friends that have made a legitimate business from a part-time passion.
I discovered over the last few years that part of my job (non-billable hours) is to be an occupational therapist for my clients. The entrepreneurial game is an isolating one. If you have employees, you have to lead by example and have a good poker face when shit is hitting the fan.
5. Have A Marketing Strategy
Almost every small business thinks they innately know how to market themselves. It's very similar to the countless small talk conversations I've had as a stand up comedian for the last decade. For example, my comedy on-stage or off-stage isn't for everyone. However, everyone thinks they have a great sense of humor and knows how stand up works. The people that tell me, "you can use that in your little skits" have no idea how their small talk quip will never, ever be performed on stage.
Most people believe marketing is to generate more sales or raise revenue; I think of marketing as achieving the following:
Increasing Profit Margin
Additionally, making sure you're achieving this within your business constraints of projected growth, product/labor capacity, your brand as well as your business goals (see point #1). You should have a marketing and sales funnel that consists of a gaggle of different online and offline methods to pull in new, qualified leads. Below is part of an infographic I am creating to explain very basic marketing theories using Price Is Right games.
**yuck. These are all gross terms. For brevity, I had to use them.