Stage of life matters when starting a business

Is the right temperament important for entrepreneurs...

For me personally and for my consulting clients I would define it not by temperament but by stage of life; single, married, number of kids, one or two incomes...

I've heard this argument before from one of my partners. We did a radio show together on small business that led to a series of consulting projects. I was always struggling with my schedule to fit everything in. He would say, "If you focus on one thing and do that well you would receive the rewards."

The reality is sometimes life doesn't allow that. Mortgage, children, the need to sleep a little every night, a lifestyle that my family has come to enjoy all add to my decision that in order for those like me to move full time to any one venture it has to replace the combined income from all of them. And I can tell you having raised VC money for a few of my ventures as well as others, investors are not happy paying salaries.

Here's what I recommend to my clients.

1) Define stability - it means something different to everyone. But as an entrepreneur you need to know what this is for yourself and your family

2) Know what your greed/risk ratio is. Here's how it works. I'm willing to assume some degree of risk for some return of reward. Logically, the more risk I assume the more reward I should receive. Based on your business model where is the ratio if you are looking for supplemental income versus replacing your income entirely. I often use this as a starting point to see how much I'm willing to give up.

3) All boats rise in a rising tide. Look for help early on. Trading 20% of your company may be worth it to get the company off the ground. Remember 100% of nothing is still nothing.

4) Try licensing your invention. You may end up giving away more of your company than you want and may have to pay a little up front fee but it is worth it if it takes off and you really don't want to take it to the next level. One word of advice - patent what you have before you talk to anyone.

I'm not trying to imply that being an entrepreneur is not hard work; it is. There are alternative ways for passionate people to feel the sense of starting and growing a business and still sleep at night.

check out my web site http://www.stagesofinnovation.com for more information about getting your invention or business off the ground.

Rob Goldberg 2009

Stepping out of Corporate Life

Stepping out of corporate life to become an entrepreneur requires bravery and passion..

...and a little stupidity. This may not be the best time to leave that secure job and go out on your own. Typically new business start ups fail. Given these market conditions it would be better odds that you would...fail quicker.

I've started a few VC backed businesses while keeping my full-time job. It doesn't make it easier but it sure helps me sleep at night.

Over the years I have had consulting businesses as well as product companies and here's what I've learned. Depending on the type of business and how well funded you are. Never underestimate the power of cash!

1) Partners can be a blessing, especially those that can handle some of the day-to-day activities.

2) As long as the process is well defined contractors can be extremely helpful to do some of the mundane more routine work.

3) Never over-promise. I'd rather give less and over-perform than fall short of what I can deliver.

4) Know your exit strategy. I'm in a venture now where I have multiple partners. Each of us has something else we do full time. We raised seed money to buy inventory, get insurance (it's a medial product), create a web site and develop marketing collateral. We are in the process of hiring the right sales people that will eventually run the business. Our exit strategy is to build a market for one of the complimentary companies in the industry and sell the company to them.

Good luck with your venture and feel free to reach out rgoldberg@stagesofinnovation.com or visit my web site http://www.stagesofinnovation.com/ for help with your start up.

Rob Goldberg 2009