This is a crosspost with Khalid Alkhudair's LinkedIn blog.
I’ve been an employee and I’ve been an entrepreneur, and being an entrepreneur is way better because you mix both.
I didn’t know that as an entrepreneur, even as a not very good one, you can make way more money than you would as an employee. But it takes time and it needs three times the work you put in as a normal employee.
So what is stopping you?
You will face challenges as an entrepreneur, and there are ways to conquer those challenges.
Below are the top 10 issues you will face as a new entrepreneur – and ways to conquer those challenges.
1. Picking the right business
Most of the businesses that set up fail because they are set up for the wrong reasons. Pick the right business and your work as an entrepreneur will get a whole lot easier.
If your business doesn’t help people, doesn’t provide a solution, or doesn’t give people something they want then your business will fail.
To do great business you should have a great product or service that you believe in. If you believe in it, you can get others to believe in it. When you don’t believe in something but you tell other people they should buy it you are lying and deceiving.
'What you see is what you get' should be the motto for your company. Most importantly a business model should be in place.
Remember one very important thing, your customers aren’t buying a product, they are buying you. Your image in the beginning of a startup is very important as they will put a lot of trust in your name.
So there is one very important thing you should always do – deliver what you have promised.
If you can’t deliver you should always offer a money-back guarantee or don’t ever do it in the first place. Your client feels appreciated if you're honest and say you cannot do what they are asking for.
Give them what they paid for. If you can’t give them what they paid for give them their money back.
The only way small businesses can have success is by delivering quality. If you can’t deliver quality you can’t make a living. I know it, you know it and your prospective customers know it too.
2. Financing your business
Where do you get your money when you start? Good question, and there are two solutions:
- Borrow money – I hate this idea for new entrepreneurs. Unless you’re experienced, know what you’re doing and you’re certain your business can succeed (and grow) you should not borrow a single dime.
- Bootstrap – Use only a small amount of money and find a creative way to get your business going.
I’ve started five successful businesses and I started all for less than 100,000 Saudi riyals and I turned them into top earners. I’ve never borrowed a riyal to start a business.
There are other ways and one which I learned from Endeavor's MD in Saudi, Rakan Aleidi. The three Fs - friends, fools, and family. Each could be a good source in the beginning of your business.
What's important is, you need to look at yourself. For the first year and a half you won't be going on vacations or buying fancy cars. You need an amount that secures your rent, family, food and shelter. Put that salary amount in your head and work on it.
3. Finding your clients
Finding clients, or as I like to call them “partners” is only a challenge if you don’t have a good product or service. If you have a good product or service then people will come to you. There is no need to spend hundreds or thousands on advertising, at least not right away.
There is a certain type of person who will be your customer. Not everybody in the world is buying what you’re selling, so your job is to simply find the people who are in need of your service.
Only try and sell to people who have expressed interest or desire in your product. Never waste your time trying to convince somebody to buy something they don’t already have an interest in.
4. When to quit your day job
The right time to quit your day job is when you have a foolproof business opportunity or you have enough money in the bank that you can work on your business and take care of your personal expenses.
You’ve got to have money to survive, so quit your job when you a) have a little money to work with and have a real business plan or b) are making an income from your entrepreneurial start.
When I quit my job I put all my money into the business and left the rest to survive. It took me eight months till I started getting paid a salary. Also this post relates to those working in a startup. Its great to see someone quit a startup and start their own thing, but at the same time the biggest potential for you as an individual to grow is in that startup and it could lead to you owning shares. If you believe in the business and add value, the owners would take that into consideration.
5. Dealing with the stress of no steady salary
There is no other way to put it - it’s extremely stressful when you don’t know when, or if, you’ll be paid again.
If you're starting a website business, the cost of set up is low so you have some cash to play around with. If you like dealing with cash, then start a food and beverage outlet.
6. Managing your money, legal protection and other stuff
Managing your money can be a real issue if you don’t know what you’re doing and if you don’t know when your next paycheck is coming through.
I manage my money in a very simple way – I rarely buy anything. I pay my bills, I buy my food, I pay my dues and the rest is for business, or for the bank account.
I don’t live on a budget, never have, I just don’t spend very much money unless I have to. You may very well have some lean times ahead of you and you’ll want some money in the bank to help get you through.
On the other hand, nothing lights a fire like having no money and needing money. When I started Glowork I had enough money in the bank to live for a year, so maybe it’s no coincidence that it took me one year to turn Glowork into a profitable business.
You’ll need to set up your business as a business, not a hobby and not as a sole proprietorship. You need to get your CR set up, Gosi info done, Zakat certificate, Labor licence, chamber of commerce certificate and if you’re a specialized business you need a license to operate. For instance for operating a gym, you need approvals from municipality and the Youth federation.
With this you need to add in your budget areas where you might need to invest or God forbid a risk happens and you end up being fined. One small problem may bring a fine big enough to shut you down for good.
Also good governance is important. So if your setting up with a cofounder, make sure you read documents properly as this has a long term effect not just on your business but also your partners and employees and potential investors.
7. Dealing with negative people, loneliness and self doubt
The Germans call it Schadenfreude. It means the pleasure people take in seeing others fail. If you have people like this in your life, as most of us do, there is only one solution: cut these energy vampires out of your life.
They’re a mental burden on you because they drain you of energy. Energy that you need to build and conquer. Give these people the boot and do it ASAP. If they aren’t on-board with you, then toss them overboard.
You often hear of successful people, how much they’ve changed, and how they don’t spend time with their old friends anymore. Successful people don’t have the time or the will to hang out with losers, so they cut them off and stick with those that believe in them and grow together.
With money and success comes choice, that means you get to pick and choose who you spend your time with.
All of us feel self-doubt at one point or another. An easy way to conquer self doubt is to take a look around you and see all the people who have given up and ask yourself if that’s how you want live.
If that’s not how you want to see yourself then don't give up. Ever.
8. Finding trustworthy business partners, building a reputation
It should go without saying, but I’ll say it anyway. Never go into business with scumbags. Going into business with a scumbag will give you a bad reputation. Your reputation will be linked to the scumbag, even if you’re a man of your word.
It can be hard to tell at first sight who is a scumbag and who isn’t, but you will always find out eventually and when you do find out you must instantly dissolve the relationship with the scumbag.
It’s not a moral issue, it’s not an ethical issue, it’s an issue of having a clean soul vs having a dirty soul.
9. Dealing with competition
John D. Rockefeller famously said “competition is a sin” and I’d have to agree. Why bother competing when you can be an innovator and start something new?
Three years ago there was nothing like Glowork and that’s still true today. Even though I have dozens of copycats (maybe hundreds) nobody can compare.
Ask yourself "what is missing from the market?" Answer that question and you’re in business as an industry leader.
10. Hiring employees
As a small business, typically the last thing you’ll do is hire employees. You’ll want to hire employees when your workload is too much to handle yourself and you have the revenues to pay your employee(s).
You’ll hear me mock employees time and time again. That’s because most companies treat their employees like dumb cattle and the employees always complain "I hate my job." Then the employees go back to the same job day in and day out, like cattle at a feed lot.
But there is a big difference between working for a faceless corporation and working for a small business. As a business owner you will have the opportunity to create a great company that people want to work for.
Your job as an employer is threefold: teacher, motivator, check writer.
You aren’t a babysitter or a personal therapist and you should never act like one but there is one easy way you get your employees to be happy, feel like part of the team, and come up with new ideas: you give them a voice. You listen to them. They are helping to build your company, they want to be a part of something, and they will often have ideas that you would never think of.
Who should you hire?
As a small business you would be wise to hire freelancers, co-ops, interns, contractors and virtual assistants rather than traditional employees as a start. It’s less paperwork hassle for you. All Saudi universities now allow you to hire co-ops and women do great as they have more ambition then men to work in startups, are willing to commit and have enough passion for startups.
Your employees will never be happy with their paychecks - no employee in the history of the world makes enough money, but that isn’t your concern. Your concern is to pay your employees when you say you will.
Sounds easy? Give it a try and take the biggest risk in your life.