If you’re about to start a business, you’ve probably read several how-to books looking for advice on how to be successful. While researching is a great first step, there are some lessons that you won’t find in a book.
You need to hear from business owners who have been in your position, who started a business with a great idea, a lot of enthusiasm, and a shoestring budget. To give you a few business tips, we asked several entrepreneurs, including Kelly Costello, who was featured on ABC’s “Shark Tank,” to tell us what they wish they’d known before they started their businesses.
I wish I knew: how to manage cash flow
Kelly Costello started Puppy Cake, a business that sells “people food for dogs,” in 2007. Costello took her flagship product, a cake mix that pet parents can make for their dogs, on the hit show “Shark Tank.”
The sharks didn’t offer her a deal because they felt she needed more sales experience and more products, which she’s working to rectify, but neither of those issues are what Costello says she wished she knew before embarking on this business venture.
“I got into debt to keep the company afloat. I just went out and tried to make a great product, but didn’t start building a business until after I went on Shark Tank and realized that I didn’t have a business worth buying,” she says. “You have to justify every purchase you make. If you have to sell 10,000 more units to cover the cost of an expense, it might not be worth it.”
I wish I knew: how to plan for taxes
Jonathan Passley, the owner of PDR Web Solutions, a web design and online marketing company located in Baltimore, Maryland, says he didn’t know how to save for taxes when he first started out at the age of 22.
“Not knowing to save 30 percent of my net profit each month to pay quarterly taxes forced me into a perpetual cycle of paying the prior year’s taxes plus penalty fees and interest,” he says. “This restricted cash flow prevented me from being able to invest money back into the business to hire additional employees, buy equipment, and make marketing choices.”
Passley says his business, which is now six employees strong, would have grown much faster had he talked with an accountant before launching his business. Aside from tax help, an accountant can help you track your inventory, create invoices, and create a payroll. Even if you’re a solo entrepreneur, an accountant can help you make wise financial decisions, Passley says.
I wish I knew: how to pitch my services to clients
Sheila May, a CPA who primarily works with attorneys, says the one thing she wished she knew was how to approach a potential client and pitch her services.
“I spent a lot of time asking people, ‘Do you have any work? If so, would you consider me?’ Now I realize I was being too generic and sounded too desperate,” she says. “My advice to new entrepreneurs is to research potential clients and understand their needs and workflow. Once you know the company inside and out, offer specific services that are tailored to that specific company.”
May also suggests bringing samples of your work to the meeting. You don’t just want to tell a client what you do, you want to show them, she says.
Is there something you wish you knew before starting your business? It’s a great topic of discussion—in fact, we’ve put together a similar “What I Wish I Knew” list before, which had great feedback. Check out the previous article and feel free to add to this list in the comment section below.