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Newsletter: September 2009

A Note to the Corporate Refugee

The national unemployment rate reached 9.5% in June 2009. Seventeen states (including Washington DC and Puerto Rico) reported unemployment rates greater than 10%. With rising unemployment, we will see more people think seriously about starting their own business. Some will actually do it. And we believe it is an opportune time to do it.

Starting your own business is exciting and worthwhile. The glamour of being your own boss is appealing. As you contemplate your venture into entrepreneurship, it’s important to understand that the entrepreneurial working environment is different from the corporate working environment you are leaving or may have already left. What was tolerated, or even rewarded in the corporate environment will very likely be the key reason why you fail dramatically in your new venture. There is truth to the aphorism: forewarned is forearmed.

Here are some key points for you to consider:

• Behavior that was acceptable in the corporate world may not be tolerated in the entrepreneurial world;
• Being in your own business is about being in the marketing and sales business. No money comes until a sale is made. You must market;
• Initially, you will see your entire staff in the mirror every morning, and you really don’t want to be looking at your worst boss;
• Great friends you had in the prior company may not return your calls;
• Vendors who pampered you, may not return your calls.
  

We often see people who leave the corporate environment behave in a similar way they behaved in the corporation they just left. Examples include:

• arriving late for meetings;
• slow return of emails and voice mails;
• not tolerating disagreement;
• hubris;
• relying on others to get their work done and taking credit for it;
• not spending time working directly with clients;
• being dismissive to others.
  

Another behavior we commonly witness is the individual’s unwillingness or inability to mentally leave the position and role they just left. As an entrepreneur starting your own business, you are not the Director, Vice President, or Senior Vice President of a large organizational. You no longer have the trappings, esteem and support that role once gave you. You are a solo entrepreneur or part of a partnership that is starting out from ground zero. It is best to forget what was and to focus on what is and where you are going. Truly, when you make your first sales call, or your pitch for funding, the fact that you were once a corporate executive will go only so far (and often, people don’t really even care what your background has been); you must demonstrate credibility that you are capable of starting and building your own business. When you make a sales call, it’s about the value you bring to the prospect. To the funding agency, it’s about your ability to convince them that you can do what you say you are going to do. It’s about the results you personally can deliver.

A colleague of ours, who was in his early 50’s, decided to leave his position as the Chief Financial Officer of a mid-sized manufacturing company to start his own company advising small companies on financial issues. Twelve months into his solo practice consulting company, and after securing only one client, he took a Director of Finance job at a larger service organization. What happened?

Our colleague never fully realized he was in the marketing business and not in the financial business. As a solo practitioner, he was responsible for finding clients and convincing them that his services would improve their business.

In his previous job as CFO, he didn’t have to market to anyone. Staff came to him and was available to him. Vendors courted him. He was aloof. Returning calls, showing up on time for meetings, responding to vendors in a timely manner were not priorities to him. He did not have to build relationships; others had to build relationships with him. This all changed when he became a solo practitioner. What worked for him in the corporate environment sabotaged his chance for success running his own business.

Here’s what we suggest you do as you set out to start your own business:

• Learn as much as you can from successful entrepreneurs about what they did and are doing to be successful;
• Read about successful start-ups;
• Find a trusted friend or a trusted advisor who isn’t intimidated by you and who will give you honest and candid feedback;
• Understand that you are in the marketing business;
• Understand that it is important to build a relationship with your prospective buyer. People buy from people they like and trust;
• Understand that responsiveness sends a powerful message to your prospect. Don’t accept the useless advice that responding too quickly makes you look desperate. It makes you look responsive;
• It’s OK to take advice from your lawyer and your accountant, but balance it with advice from successful people who are doing what you want to do;
• Do not accept unsolicited advice. Everybody has an opinion and too often their opinion is about what’s best for them, not what’s best for you
  

Don’t make the same mistake so many others have made before you – such as our colleague who we briefly profiled above. You are leaving a highly structured, hierarchical, politically charged environment where a meritocracy may or may not exist. It may be hubris, cunning and political skill that get rewarded. Not so in the entrepreneurial environment. In the entrepreneurial environment it’s about the value you bring; it’s about how you can find ways to make your customers or clients better off; it’s about building real relationships; it’s about personally doing what you say you are going to do when you said you are going to do it.

Staring your own business is a worthwhile goal and can be highly rewarding – from both a financial and personal fulfillment perspective - if you think it through and act accordingly.

Excuses Be Gone. No Time For Bad Behavior.

People are continuing to sabotage themselves, and now the implications are worse than ever. Here are some common examples:

• You do not provide value to another but expect value from others first and regularly
• Asking for help finding a job, then not returning calls or emails once you’re settled in
• Not thanking others for their help and advice
• Treating vendors poorly rather than as potential partners

• Being a plain old jerk
• treating employees poorly (read: disrespectfully and negatively)
• treating customers poorly
• treating acquaintances poorly
• treating most people who you feel can’t help you now - poorly

• Not taking the time to build and maintain relationships
• Showing a feeling of entitlement - people should be reverential to you but you feel no obligation to be respectful in return
• Hubris, (read: egotistical and arrogant in style and behavior)

Yes, for most, the recession is still here—so what do you do to rid yourself of “bad behavior”?

• Understand that building meaningful relationships is important, now more than ever
• Decide who it is important to stay in contact with and stay in contact with them
• When you get a new position, acknowledge everyone who helped you by sending a quick note thanking them (whether they were instrumental in helping you get that position or not). You called them for help and they returned your call
• If someone you reached out to in the past calls or emails you - return the call or email. You do not have to be their best friend, nor even meet with them, but a gracious reply is remembered
• Always find a way to provide value first

We strongly believe that these challenging times create great opportunities. Someone will get the job; someone will make the sale; someone will successfully start and or manage a business. Why shouldn’t it be you?