- Are you thinking of starting a business? How do you know when you are ready to start a business? I do not believe everyone should start a business. Now we have this culture of people wanting to be entrepreneur without knowing what it takes. Entrepreneurs are now the new rock stars. The kids now, before they wanted to be a rockstar now they want to be an entrepreneur because of Instagram, because of social media. They think that it's easy anyone could get started. It is simply not the case.
the top seven things what not to do when starting a business.
Number one, don't start a business when you are desperate.
You see it's very easy to deceive ourselves and say, "We're going to start this business and we're going to make a profit in three months in six months, in a year. That's simply not the case. Most businesses don't make money that quickly. Yes, in some cases you do have sort of online businesses that it's easy to turn a profit, but I'm talking about most businesses don't make money in the first year. In fact, they don't make any money in the first few years. - I'm broke baby. I ain't got no money. - And it requires a substantial amount of investment in terms of time, in terms of money, to just get it going. It is not easy to get a business going. So don't start a business when you've got no money and don't start a business when you're living paycheck to paycheck, how are you going to meet payroll? How are you going to do marketing? How are you going to get the business going? You got to cover your living expenses at the same time, cover all the overhead in the business. How are going to come up with that money? Answer the question. So don't start a business when you're desperate.
Number two, don't start a business if you don't know how to close, I'm talking about how to sell, how to influence, how to make that sale. In business, nothing happens until a sale is made. A lot of people say,"Oh, I've got an idea." So fucking what? An idea doesn't mean spit. Unless you know how to turn that idea into a product or service that people want to buy. - Shut up and take my money. - And you know how to get your product or service in people's hand. And you know how to communicate how to close in exchange of money, it doesn't mean anything. An idea is dime a dozen,but the ability to close the ability to sit down with someone face to face on the phone, on camera,in video, on social media, how do you convince and persuade someone to give you money in exchange for your productor service? That's the key. If you know nothing about selling, you're not qualified at the moment to start a business.
Number three, don't start a business if you don't understand the industry. I am shocked by how many entrepreneurs, when they have an idea and I ask them just a few questions. "What do you know about the industry? Who is your ideal customers? How are you going to reach them? What are their frustrations? What are their goals? What qualifies you to be in this space? How much do you know them? Do you have any credibility? Do you understand what they're going through on a daily basis? Do you understand their emotional needs?" - We'll be asking the questions old man. - Blank. They know nothing about the industry. Then I say, "Why are you thinking of getting into this industry?" And they say, "Well, I thought I saw so and so make a lot of money doing that so I would just get into it." It's like you see an NBA player playing basketball all day, kind of doing pretty good. And they know how to shoot the hoops. I should be a basketball player. You see how idiotic that is? Do you see how idiotic that sounds? This is not how it works. You have to have something that is truly unique that you bring to the marketplace that is different from everybody else. You could add more value,you can solve a problem that's not being solved at the moment. And that's what gives you the right to start a business in that particular industry. Your success in businessis largely determined by how well you understand your industry.
Number four, don't start a business simply because you are sick and tired of your job, or you hate your boss
If you are sick and tired ofyour job, get a different job. It doesn't mean you should start a business just because you don't like your supervisor. You don't like your manager. You don't like your boss. It doesn't mean you should become your own boss. - I quit! Arthur, I quit! - It doesn't make you ready. It doesn't mean you are equipped to be your own boss to be in business for yourself. It is a different game. Now, I'm not saying don't do it. I'm saying, do you know what it takes? Don't start a business out of ego, just, "Oh, you know what? I don't feel that I'm appreciated,I don't like what I do. So I'm going to go start a business." Do you have the business acumen? Do you have the right knowledge? Do you have the right skills to make a business work? No one talks about that. Every talks about jumping off the plane and let's figure this out. - Now is not the time for fear. - Let me quit my job and let me figure this out. How are you going to pay your bills. How are you going to support your family? How are you even going to support yourself? How are you going to support your business? All the expenses, all the capital investment. Where does that come from? Thin air? You tell me. "I should just, you know,get money from other people I could raise capital." Sure, do you know how to raise capital? Do you know how to do a pitch deck? Do you know how to talk to investors? Why would an intelligent investor even invest in you? What have you got? These are tough questions. You better have good answers for that. Because out there the business world, it is crude. It is very, very crude. And every single day, someone is trying to put you out of business every single day someone's trying to kick your ass. Someone's trying to take customers away from you. Are you ready for that? Are you ready for that fight? Do you have what he takes intellectually?
Number five, this is a big one. Don't start a business simply because your family and friends tell you it is a good idea. Let me break the news to you, they are lying. They are being polite. - Don't lie to me. - They say, "Yeah, youknow, that's a good idea. I think you'll be very successful. Yeah I think I would love a product like that." And guess what? When you're seeing your life savings into it, when you finally make that product, you go to your family and friends and say, "Hey, would you like to buy some?" "Oh no" "What, I thought you told me it was a great idea. I thought you were very supportive." "Oh yeah. I was just being polite." "You were being polite,what the hell is that? What do you mean you were being polite?" Your family and friends they're not your customers. They're your family and friends. - I run shit here, you just live here. - What you need is you need to get direct feedback from the marketplace, from strangers, from people who don't know you, people don't even want to support you. Are they willing to vote with their wallet and say, "Hey, I want to buy your product,I want to buy your service." Not because your family and friends, your mom, your wife, your husband, your cousin, your sister say, "It's a good idea." - We're going to start you off with a $500,000 investment. - You want to know if it's a good idea and not go to the bank. Try to get a loan. Here what the banker say. And they'll tell you if your idea's actually good or not. You want them to be brutal,you want them to be honest. Show them the plan, show them your idea, see what they say. If they've got any experience at all, they will tell you. Why would they not fund your idea? Why would they not even fund you? Take that feedback. Take that constructive criticism. And you go back and you revise your plan.
Number six, this is the biggest mistake that wanna be entrepreneurs make. And that is don't starta business thinking how much money you can make. That's amateur. A wise entrepreneur, an experienced entrepreneur doesn't think about how much money I could make. No. They think about burn rate. - All you care about is money. - They think about how much money they could lose before they go out of business,how much time they have. They got to make that work. How much time they have before they close the door for good. Now you don't think about that now, do you? You think about, "I'm going to make all this money." Have you ever thought about how much money you will lose? What if it doesn't work? What if it takes you way longer than you think? What if it costs you twice much as you think? What if it takes three times as long as you think? How are you going to handle that? These are very, very good questions you need to have answers for. "Oh yeah, it's going to work in one month." You're being an idiot. - What an idiot. - It's not going to work in one month. It's not going to work in two months, it takes time. To be a good entrepreneur you have to be a realist. You have to look at the facts. You have to look at the data. You have to look at the numbers. By the way do you know how to read financial statements? Do you know how to negotiate? Do you know how build a team? Do you know how to raise capital? Do you know how to market? Do you know how to sell? Do you know how to handle conflicts? Do you understand strategy? Do you understand business model? Do you understand different legal entities that you could take advantage of? Do you have a basic understanding of the tax law in your country? "But I've got a good idea." It's not about that.
Number seven and that is this. Don't start a business unlessyou are willing to commit 10 to 20 years to the business. "What, 10 what are you talking about? I thought I'm going to start a business and I'm going to exit in three to five years." Now that does happen to some people, not most people though. But going into the business, you have to think about long term. Think about 5, 10, 15, 20 years. If you exit in five years and you walk away with a lot of money, good for you. But what if you don't? That 10 year period of time,that 15 year period of time knowing the first few years, probably a good chunk of that first 10 years, you're not going to make much. It's going to be tough. You're going to face a lot of obstacles. It's going to be very, very stressful. It comes with a game and that's part of being entrepreneur. Are you ready for that? I've had many, many of those sleepless nights. I got no one to talk to. How am I going to pay the bills? How I'm going to solve this problem? How am I going to meet payroll? How am I going to pay rent? No one could help me. No one's coming to rescue mein any way, shape or form. I had to figure it out. And I stuck through that period of time. And I kept on going and I didn't give up. But that first 10 years was not easy. It was not easy. Looking back, I'm like, if I knew this is what it takes, I don't even know if I would even start. Now of course now I enjoy the fruit of the labor right now, yes we have accomplish a decent level of success. However, I got to tell you, it was tough. It was tough as hell. And it was a very, very lonely as well. But that's the path. That's why it's not for everybody. So those are the seven things of what not to do when starting a business. When you should not start a business. Over the years, I've interviewed hundreds and hundreds of CEOs and founders, even billionaires distilling their knowledge and their expertise into simple lessons. I've put together a simple guide called how "CEOs Build Empires." If you want to get a copy of that for free click, the link below. Learn from other successful entrepreneurs and CEOs, what they have done to build their organizations. Again, this is not for everybody. If after watching this video and you still believe you have what it takes, go ahead and download the guide.
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