It’s quite common for people to set themselves up in their own business after leaving the Mothership, offering their services as a consultant or coach or trainer, or some combination of these. I did and I’ve seen many others go this way because it’s the easiest and obvious choice, so it’s popularity is not surprising (although whether this is the best choice is a question for another day).
What’s surprising to me, however, is how these intelligent, articulate and able people manage to sabotage their new businesses whilst believing they are being perfectly rational. Even more surprising, they all make one, some, or even all of the same five unintentional mistakes (yes, me included).
When you begin a business delivering your personal services, you have a set of existing assets that you should be using to turbo-boost you at the start. These are
- Your experience and skill set
- Your industry knowledge
- Your network of contacts and relationships
- Your ability to address specific, high-value problems
- Your status and credibility (to some extent, this is a product of the others)
Using these to get your business up and running, you can get to that crucial break-even point as quickly as possible. You can develop a new direction after that but you will have proved to yourself that you can make a living from your own efforts and can move forward with confidence.
Instead, all too often we disable or ignore these assets by doing the following:
- Doing something completely different
You’ve spent all your career in IT but now you’ve decided you are going to offer psychometric profiling as a service. Or leave behind your HR expertise and go into web design. This is not usually driven by some mis-guided desire to ‘follow your passion’ but by a desire to have a change from what you’ve done in the past (and got completely jaded about).
2. Work in a different industry
Similar to above, we decide we no longer want to work in the industry that we know. It may be because we believe it is shrinking or just that we are heartily sick of it. Instead of leveraging our knowledge and contacts, we decide to go into an industry where we know nothing and nobody. Or worse, go into several industries, any industry, as long as it’s not the one we’ve come from.
3. Work in a different location
You’re fed up with the commute and the noise and hassle of working in the city, so you decide it would be nicer to work nearer to home; have a better life balance, spend more time with the family or on our hobbies. This sounds lovely. Unfortunately, you don’t know anyone in your local area and so have to build up networks and relationships from scratch. As you get to know your area, you realise that there aren’t any of your target customers in your locality, which would have been obvious from the start if you had thought about it for more than a second.
4. Ignore our existing network
Having spent all our working life building up relationships and establishing credibility and trust, we decide to ignore this network because we don’t believe it will be relevant to our shiny new business. Instead, we put large amounts of time and energy into meeting new people, in the hope that they will prove to be the right ones to reach our customers. However, these new people do not yet know us, trust us, rate us or remember us and so do not provide any leads. Meanwhile, the people in our old network (who do know, trust, rate and remember us) could connect us to our target customers immediately but aren’t because we’ve never asked them too – because we’ve assumed they couldn’t.
5. Make a generic offer to a generic market
About the most common statement I have heard at networking events and when speaking to people new to running their own businesses is “I provide a wide range of consulting services to small, medium and large businesses”. It’s not their fault, they are unfamiliar with the skills of marketing and are operating well outside their comfort zone but they might as well say “I do some things for some people”. Actually, that is what they are saying. It’s impossible for anyone to help them get any business or for them to focus their own efforts in an effective way. They are basically firing arrows up in the air and seeing who they land on because they are scared that if they aim at a specific target they will miss out on other opportunities. (I, of course, have NEVER been guilty of this ;-9)
These apparently rational decisions are often made because we have not worked through the ending of our corporate career. This is an event that has the same psychological impact as a divorce or the loss of a loved one and it is vitally important to process the events, feelings and emotions so that we can move on and transition to a new career and life-style. All too often the final part of corporate career is an unpleasant experience, a bruising and sometimes traumatic exit that colours our judgement and causes a rejection of what went before. Instead, we need to hold onto the positive assets to build your new business, at least for the initial stage.
It seems to take people about 1 1/2 to 2 years to figure out what they are doing wrong and to process their experience enough to be able to re-evaluate their past career and leverage those assets. By this time their initial enthusiasm, energy and capital is badly depleted but, with luck, they will have learnt enough and found enough resources along the way to recover the situation and make their business the success they were always capable of.
If you are a corporate leaver, consider these five unintentional mistakes before you decide on how to start your new business. You don’t have to build upon your past but it makes it a lot easier to get to a level of success that supports you financially, so that you then have the freedom and confidence to move in a new direction.
Sometimes, of course, changing your occupation, industry, location or network can work but not if you are looking to trade on your prior expertise, which you often are as a consultant, coach or trainer. These are mistakes people make unintentionally, that’s why you need to think about them. (although the last one is ALWAYS wrong and you definitely need to think about that).