Next to death or divorce, failing in business must be one of the most terrible psychological pains a person can endure. Besides devastating financial loss, there's emotional and mental anguish that can include self-loathing, an extreme loss of confidence, depression and despair. We live in a world where success is lauded and there's relatively little appreciation of the wisdom, learning and experience that failure can bring.
Statistics vary dramatically when it comes to business failure rates, because they're largely dependent on the business size and sector, but it is safe to say that more than 50% of businesses that are started bit the dust. This rises dramatically during recessionary periods and can peak at 90%. Despite high failure rates, entrepreneurs keep on trying, and so they should and must. Entrepreneurship directly addresses one of the biggest challenges facing South Africa - that of job creation.
The book is filled with pathos and humour, a prerequisite for anyone crazy enough to become an entrepreneur for the first, second, third or 10th time.
Mandy de Waal, ITWeb contributor
There's a tsunami of business information available for entrepreneurs, mostly well intended. They include the legends like Getting Things Done by David Allen; The Effective Executive by Peter Drucker; Leadership is an Art by Max De Pree; The Tipping Point by Malcolm Gladwell;The Essential Drucker by Peter Drucker; The Art of the Start by Guy Kawasaki, and 94 other books that make the “100 Best Business Books of All Time”. Thousands of business books are published each year, but who wants to read the crud? To avoid the tofu and get to the steak, you can perhaps lay your trust in Jack Covert and Todd Sattersten of 800-CEO-READ.
One title that's not on the list, which should be, is a smart, pragmatic and laugh-out-loud book that I've been hearing about for the past year. Financial journalist, entrepreneur and day trader Marc Ashton swears by it. Then it is pretty much Eric Edelstein's bible. A founding force behind Clicks2Customers.com, TrafficSynergy.com, and Mobile-QandA.com, Edelstein founded eSquared clothing stores and Springleap.
Called How NOT To Start and Run Your Own Business, Scott Cundill has managed to write a manifesto that is pragmatic and will wipe the business dream dust out of entrepreneurs' eyes before they can mouth the word “liquidation”. This is business fought in the trenches. Real, street smart and raw, Cundill pulls no punches and is brutal in his assessment of the truth about start-ups. Incredibly clever, the book is filled with pathos and humour, a prerequisite for anyone crazy enough to become an entrepreneur for the first, second, third or 10th time.
Book extract: How NOT To Start and Run Your Own Business by Scott Cundill
* Don't go into business to succeed financially. Before you lock me up and carry me away to a place with barred windows and lobotomy experiments (and no, I'm not talking about the Institute of Financial Advisers), think about this logically. The chance of you making money on your first venture is practically zero, of this I've already provided irrefutable proof. Therefore, rather go into your first business appreciating, no, EMBRACING this fact. Go into it like a child going into a swimming pool for the first time. You're too bewildered by the experience to realise that you're drowning, but someone always fishes you out before it's too late. If you do this for the experience, then you can't lose!
* Don't take too much notice of what “they” say. “They” will tell you all kinds of things, motivating you to go against your natural will. If you head off and do your own thing you will lose money, that's a given so you may as well do it your way. Some people you speak to will uplift you and some will bring you down, including your family and friends. You will fail in many ways, but rather make your own mistakes than follow someone else and make theirs for them. You will learn faster this way.
* Don't make excuses. You'll hear them from other people and you'll be hearing from your own mouth. Excuses coming from others are irritating. Excuses coming from you are unacceptable.
* Don't waste your money on business books and tapes and stuff. I use the word “tapes” instead of “CDs” here to make a point. They're really just old-fashioned door-to-door sales talk. Yes, you will learn some interesting stuff every now and again, but it's less about the things you should be doing and more about the things you shouldn't be doing. For a person just starting out on his or her own business, most of what you hear won't make any sense anyway. The motivation will keep you going for another day or two, but that's about it.
* Don't defend yourself to people who don't believe in you. People who give you a hard time have good reason to - it's because they are absolutely right. Instead of defending yourself, rather just agree with them so you won't feel so sheepish when you eventually come crawling back. The old saying is “don't burn your bridges” and I agree.
* Don't expect your friends and colleagues to understand you. The only reason people don't go out and do their own thing is out of fear. Fear of the failure rate, their fear for you if you fail, fear of how they will feel if you succeed. They'll tell you that you're crazy to give up your security on some crazy quest to find that mysterious paradise. Paradise is a lie. It's a fantasy we create about people and places as we'd like them to be (“I've never been to me”, Charlene). A better alternative is to discuss your dreams and ambitions only with your plants, your pet or some inanimate object you have a strong bond with.
* Don't spend money starting out. Business is about money so don't spend any unless there's a guaranteed ROI (that's fancy Latin for “return on investment”). There is a bizarre quotation that goes like this: “You have to spend money to make money.” As any true entrepreneur will tell you, those words are spoken by salesmen, not businessmen. Try not to spend money on anything until you are absolutely certain you will get a financial return. Everything you need to learn will come from:
i) The Internet
ii) The school of hard knocks
iii) The hearts and minds of others you'll meet on your journey
* Don't bother with window dressing. Business cards, office space, logos and cool names mean very little. Rather invest money in the most important asset you have - yourself. If it's a statistical certainty that your first business will fail, then it's an even bigger statistical certainty that you will get into a cash flow crisis. When you can't pay your overheads at the end of the month, you are going to regret the day you spent that small fortune to ensure your entire office is Feng Shui compliant.
* Don't be normal. If you go out there to fit into the crowd and be like everyone else, then it's fair to say that you'll probably end up being just like everyone else - a financial failure. Because everyone else has or will fail, following the herd simply means you're the first to be eaten from behind. If you follow people who have been in business for some time, remember that they already have a head start on you. Something in your approach, offering or personality must be different or you'll sink very quickly. If you're going to hang around with anyone, hang around with people who are failing dismally, but have compatible businesses, which you can leverage together. Support each other; it's the only support you're going to get.
* Don't share your business with anyone. Giving away equity means there is another person you have to constantly negotiate with and another person to share the spoils of your hard labour. Fight to keep the maximum shares in your business. You must be the one to take the risk and you must be the one to reap the rewards. As things pick up, you are going to get offers left, right and centre.
* Don't read business papers. Business reports and newspapers are for people who think they know about business. Firstly, what goes on in business and what gets published are two very different things. Secondly, only the bigger businesses get written about and the way a big business is run compared with the way your business will be run are as different as Sonny and Cher.
* Don't get caught up in someone else's dream. Professionals like doctors, accountants and other white-collar yuppies have a much greater chance of being successful. This is because they are backed by powerful associations that regulate the industry extremely closely. Unless you're willing to study for a decade, agree to play ball for the rest of your life and live on their terms, rather get your own ball and make your own rules. The same goes for any business where you become instrumental in making other people's dreams come true. It's fine to buy into someone's ambition temporarily for learning purposes, but make sure that you have your own, preferably complimentary agenda. Be open about it and work to grow yourself and the other party together.
* Don't for a moment think you can't do it. Even if it's your 17th attempt, anybody can start and run a successful business. I know, I've seen it. You'd be amazed at how many great businesses out there are run by complete idiots. If they can do it, you can do it. Just do it.
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