A few months shy of my college graduation in the early 2000s, not only did I not have a “real” job lined up, but also I had nearly bankrupted myself after my first business tanked. I had less than $700 to my name, no job, no prospects, and a hefty chunk of debt to boot. Everyone told me to get a “real job” and stop kidding myself.
But here’s the great thing about making entrepreneurial mistakes early: You learn from them. With very little money, zero business education, no outside resources and not a single mentor to rely on, I figured out how to launch Sizzle It!, a company that produces videos for brands and PR and marketing professionals, and turn it into a profitable business—which it still is today in 2012. Today, our clients include Procter & Gamble, Dolby and Gap.
You can do the same. Step one: Put resume in trash. Step two: Get started. These 10 pointers, culled from my own experience, should make the transition a little less hairy:
1. Leave your ego at the door. Entrepreneurship is hard work, especially in the beginning. It does not start—and it probably won’t end—with a yacht or a Ferrari. (I could say the same about all jobs.) So the first thing to know about business is this: You are not special, entitled or guaranteed anything. To stay alive, you need to be grounded, practical and willing to adapt. You—and your business idea—are one in a million, and not in the good way your ego will trick you into believing. Accept this, and work backwards from there.
2. Remember that boring is better than sexy. “Big idea” businesses are money pits. Start with something simple, unoriginal and low-cost—think cleaning businesses, bookkeeping firms, tutoring companies, etc. Identify a need and fill it immediately by giving your first clients access to the one resource you do have, even as a broke college grad: you and your talents.
3. Use your age to your advantage. In 2012, age is not a deal-breaker. You have fewer responsibilities than a mid-career changer and, even if you don’t know it yet, you’re less risk-averse than you will be in a few years. Plus, older generations of entrepreneurs and executives love giving back to up-and-comers—so put yourself out there and demonstrate how hard you're willing to work to the right people. In doing so, you may attract valuable mentors who see a little bit of themselves in you.
4. Bootstrap. Ramen is good for you. OK, Ramen isn’t good for you. But neither is relying on hypothetical investment capital or imaginary acquisitions. Spend as little as you can, let simplicity be your guide, and focus on cash flow from day one.
5. Think small. Do you know what comes before big? Small. No one is going to invest in you or your business on day one, if ever. Don’t waste time on ideas that you can’t execute on yourself, by yourself, with minimal cash, know-how and resources. Once you execute on phase one, then you can start thinking about scale—and maybe, raising capital. But there are no shortcuts in entrepreneurship. When you try to invent them, you leave critical gaps in your core offering.
6. Don’t write a phone book-sized business plan. Your business plan needs to be as adaptable, fluid and agile as you. I can’t remember the last time a traditional business plan made money on its own. Do you know what does? Execution. Write something short, sweet and simple—and go back to work. My One Paragraph Start-Up Plan is a great place to start.
7. Skip the office. Scrap your overhead. From virtual office services to Google Docs, there’s an inexpensive piece of technology or online software you can leverage to make you look bigger, move faster and reduce overhead to near zero. Use virtual phone systems. Hire a virtual assistant. Stay lean and stay mean—your clients never have to know; they’ll be too busy reaping the benefits of your smart leadership.
8. Cut your “worst-case” financial scenario in half. Twice. Financial forecasts are fun. But they’re useless exercises for most first-time, bootstrapped start ups. Assume you will make very little money up-front. Figure out how much you need to survive and cover your basic life expenses (which, incidentally, do not include a new car or eating out) and grow your business organically from there.
9. Avoid the wrong partners like the plague. There are lots of ways to share the pain (and gain) from your new start up, but a strategic partner is one of the riskiest. When considering a partner, learn everything you can about them, from their political leanings to their favorite shampoos to their work ethic. If you do decide to partner up, spell out an operating agreement that determines what happens in every conceivable situation. And I mean every.
10. Expect—and embrace—failure. You will fail. Probably more than once. Failure is the best teacher I ever had, and it will be the best one you ever had, too. You’ll be a better person, in business and in life—because failure is the key to doing it better, smarter and faster next time around.
Scott Gerber is the founder of the Young Entrepreneur Council and co-founder of Gen Y Capital Partners. Follow him on Twitter @askgerber.
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