Feeling a bit nostalgic about my first business FernGullyGraphics that I started almost 20 years ago in Denver, CO. Although there are many reasons why that version of the business went defunct in 2005. If I could go back and give myself 3 tips, they would be:
1. Understand the accounting, legal and tax aspects of your business. When I first started, I thought, I could just figure it out all later. Bad idea. You don’t have to know it all, but take the time to learn the basics, even if you are able to outsource this from the beginning, its still a good idea to have a general understanding. When I first started the business, I registered FernGullyGraphics as a C-Corp because I wanted to be big like Microsoft, so I thought C-corp was the way to go. It wasn’t..
2. Know your numbers. This goes beyond expenses and balance sheets. This is more about understanding where your break even points are and where your profit margins should be to ensure continued growth. This might seem complicated at first, however in basic terms think of it like buying for $1, selling for $2 and then asking yourself if that is a viable transaction for your business long term. Every business should be making a certain level of profit to sustain any negative changes in business. In my case, by the time we got big enough where we had a team and began to scale, I had no idea what we should be charging. Our overhead (expenses) quickly surpassed our in-flow (cash coming in) and soon went under. In many ways, you can think of knowing your numbers as your ability to see ahead as your driving.
3. Get around people with experience you seek. Thinking back on my early years, I was around some really talented and experienced people. Although I was able to soak in some knowledge. Very seldom did I make a point to engage, as I had a fear of coming across as inept. Knowing what I know now, don’t be afraid to ask questions, don’t be afraid to ask for help. Often times, that is the difference between the winners and losers in business.
And with that, I will leave you with a simple, yet meaningful quote by Francis Bacon “Knowledge is Power”