14 Lessons Learned After 30+ Years of Being an Entrepreneur

Having recently retired, and after running a few businesses over the last 30 plus years, I’ve been asked a lot about entrepreneurship and its challenges. With these unprecedented times (COVID19), things will be different for sure. But the fundamentals will not change. Below are lessons we have learned over those 30 years. I hope you find them constructive.

My wife and I have started four businesses from scratch. The first was many years ago when we were in our 20’s. It failed after one year. Believe it or not we tried to start something much like today’s Classmates.com, but in the 80s. We called it the National Alumni Association. Looks like we were about 10-15 years too early, as PCs and the Internet were unheard of at the time. We tried it by using paper and the USPS. Ugh.

Ten years later, we had managed to pay off the debt from that failure and tried it again – in fact, three more times. We learned a lot along the way. Even while I worked for a few technology oriented companies during the 10-year period after our first try. The next three businesses all ended with a successful exit. Even though the third one, MediaChoice, was also about 10 years too early. Here are 14 lessons learned:

1) The hardest thing. The hardest thing about being an entrepreneur is risking everything you have in life to start a business. If you are not prepared to do that; to mortgage your house, work endless hours, and basically put all your skin in the game, you are not ready. And you probably won’t get anyone to invest in your business either. In fact, if that’s you, you may as well stop reading.

2) The second hardest thing. If you do manage to launch your business, the second hardest thing is hiring your first employee. This is something I strongly recommend you contemplate before you even start. I’ve seen a lot of people lose or leave their job, then decide to start consulting or start that dream business, and even make a decent living due to an enabling client. Eventually they cannot handle all the work and feel they need to hire their first employee. But guess what? They can’t afford to take the cut in pay necessary to pay for a decent, full-time employee. We ran into this very issue when starting Vertical Measures. We solved it by hiring a part-time contractor first, then an intern we could train, and then a seasoned person by offering her a big bonus if things worked out. You might have to get creative too. For more on this, see #12.

3) Avoid hiring (or partnering with) someone you won't be able to fire. I understand that it just seems easier to hire or partner with someone you know. I’ve made this mistake, and I’m guessing most of you will too, but please try to avoid hiring friends and family. It rarely seems to work out well. I am extremely lucky that my wife and I get along well, and we were able to survive 12 years of working side by side in our last business. We had to set some ground rules, and fortunately we were both willing and able to abide by them — most of the time. My brother and I have worked together for many years. And both of our kids helped with our last business, with our son Brad playing a critical role for several years. We got lucky on all counts. But often, relationships with relatives and close friends get strained. As challenging as it was to do, I learned to tell the friends and relatives that wanted to become part of the business, that I would not hire anyone I could not fire. They would almost always respond by saying that I would never have to fire them. But I pointed out that it wouldn’t always be their fault. Sometimes there is a downturn in business and layoffs are necessary or sometimes you want to change directions with the business and their role might be affected. At that point they usually understood. Those have been some of my most difficult conversations. Some were still on my mind months, if not years, afterwards.

4) Marketing your business is crucial. Too many people think creating the product or service is where it ends. Just open your doors, maybe put out a press release and some social posts, and people will flock to it. After all, it’s the best thing out there! That’s one of the main reasons our first business failed. I did not properly budget for, nor plan for plenty of marketing, not only in the first year, but subsequent years as well. Unless you are opening a well-known franchise, on a busy street, be sure to have plenty of money budgeted for marketing. That can be a very different number for all of you reading this, so you may want to reach out to a few of your friends in the marketing space to get some honest opinions.

5) What makes your organization different? If you just answered “our people” or “our product” or “we have the best service” you just failed the test. Trust me, this is something you must get right. All your competitors are saying the same thing. They too have the best people, the best product and the best service. At least that’s what they are telling their prospects. So, ask yourself again, what makes you different from everybody else and how is that a benefit to your clients? At Vertical Measures, we had thousands of digital marketing agencies competing against us just in the United States. Our team spent some serious time answering this question. Eventually we settled on three differentiators and we started off every sales presentation with them. First, we spoke in front of and taught thousands of people every year, all around the world. The benefit to our clients was that we were always on the cutting edge. We interacted with hundreds of other marketing professionals almost every week. We learned what was working, what was not working and what the future looked like. Second, we invested tens of thousands of dollars and thousands of man hours in developing detailed processes. This resulted in much higher first-time quality (and accuracy) of our deliverables and nearly perfect on-time delivery rates. Third, we practiced what we preached. We created two to three new pieces of content for our website every week for 10+ years. We conducted SEO, participated in social media and ran digital ads. As a result, we generated more leads per month than any agency of any size that I knew of, had much higher close rates, and increased revenue. All of which helped increase the value of the company when we sold.

6) Do you really have a plan? Most people starting a business have a plan. And most of those people have it in their heads. I am not a big believer in 100-page plans that never get followed. However, you must take the time to document the plan for your business, including financial projections for the next couple of years. This might only be 10 pages in length if it covers the details of your business and how it will operate. I also strongly recommend a simple quarterly plan, with goals broken down by month, that you can present to the company (even if it’s two people), so they all know what your concept and goals are for that time period. Measure them, adjust each quarter and keep on going. Make sure you get everyone on board with planning their activities to achieve these goals. I’m obsessed enough with planning that I have been using Microsoft Outlook tasks for more than 20 years. Every morning I would adjust my tasks to accomplish as much as possible that day. I love crossing tasks off my list and almost never accomplish them all. But over the course of a week, month and year, I got a lot done. In fact, I have trained the team on time management, using daily tasks, and how to properly use email to make the entire company as productive as possible.

7) Think long term. I realize that during your first year or two, all you can focus on is the coming month. In fact, that feeling never really goes away. However, I’ve made the mistake of thinking short-term too many times over the years. When planning the future, sometimes I panic and think “if it will take a year, the whole world will change before we finish” and I couldn’t be more wrong. In business and life, three, four or five years is nothing. In fact, with two of our businesses we were way early. Like 10 years too early. During the 12 years we owned Vertical Measures, I cannot tell you how many times we heard “SEO is dead” – not true then, and not true for the next 12 years.

8) Culture and values are everything. Thanks to my parents, I am a pretty humble and principled person, so creating a good culture and values came naturally to me. People looked at me as a good boss because of those values. However, not until we documented them as a team, published and promoted our values, was the company looked at as a good company. Our employees now knew exactly what we stood for, and what was expected of them. Employee reviews included our values, we celebrated those values internally and talked about them externally. People wanted to work for us because of our values. Of course, if you have bad values or no values, you will most likely see the opposite effect. 

• People are boss watchers. Whether you are the owner or a manager, trust me, people are observing your every move. They take note of what you wear, how you talk, what and where you eat, how you run meetings, your hobbies, how you manage your time, whether or not you have a backbone, have a plan, have processes, how you treat people, if you are fair, and so on. Why? Because they want to understand what acceptable behavior is and how to become favored by you. Your actions alone create much of the company culture.
• Never say I or my. Instead say we or our, if you’re a leader, the message is still the same, but you are now including everyone who should be included. You are building a team. Saying our team instead of my team makes all the difference in how you are perceived and how the members of that team feel about everything else you are about to say.
• Remember that your circumstances are temporary, but your character lasts forever. When I think back on some of the bosses I have had over time, I tend to think primarily about their character. I don't think about what my hours were, how hard I worked, or even what I was paid. Instead I picture how they treated the employees and customers. How they behaved in the office and at functions away from the office. I have little respect for the bosses that were an embarrassment at various functions and sometimes in the office. And no respect for those that knowingly ripped off customers or their own employees. I learned nothing positive from those people. In fact, the business around them failed - always. Proving to me, that their behavior led to failure. But there were plenty of people who did the right thing -- all the time. Those are the people I learned from; those are the people who helped shape my future as an entrepreneur. You need to be the latter. 
• Write down, publicize and live your values. Every company has values, but not every employee has been a part of creating those values. Often, the founder imposes his or her will (and values) on the entire organization. Sometimes good and sometimes bad. In the beginning, the owners need to write down and agree on their company’s values. As the company grows, I recommend assigning a team to create your company’s values with leadership then approving them. Below are the eight values we had at our last company, Vertical Measures. These were created by the team.

9) Let them earn it. People have very little respect for money and other items that are given to them without really working for it. (Worse yet, they become entitlements.) But they place a lot of value on anything they have earned on their own. Raises are the obvious first thought, but even little things like a formal way for one employee to recognize another for a job well done, employee of the month awards, small bonuses for specific achievements, silly prizes at monthly meetings, and so on. All those things build a caring culture. The antithesis is giving titles, big offices, and raises before they are earned. It’s a huge mistake and often creates more animosity and turnover than what you were trying to avoid with those unearned rewards in the first place.

10) Build a business for the families. Most people who know me would say we have had "family" businesses. Mostly because there always seemed to be more than one Kuenn working there. While that is true, I always felt we were building a business for all the families that worked there. Nothing made us prouder than seeing our team raise their families due to the opportunities we provided. We also wanted to make it a family friendly place to work. We offered flex hours so the employees could schedule the hours that worked best for them, we offered holiday bonuses that everyone could count on, we let people run out for medical appointments and school events, we did the best we could with a very fluid healthcare system by contributing to their healthcare premiums, when each company was financially stable enough, we set up 401Ks and did an employee match, we had family picnics, heck I even dressed as Santa a few times so the employees could bring their kids in to meet him. Meanwhile the work all got done. I have found that by not counting every minute or hour, your team won't either.

11) Quality is never an accident. You must have documented processes. In the 90's we owned a technical training center. We offered Microsoft, Cisco, and other certifications. Business was booming. So much so that soon we had competitors on every corner. When we opened in Phoenix, we had two or three competitors, by the time we sold five years later, we had more than 15! We clearly needed to make our company different than all the others (see #5 above). We all offered the same authorized courses and certifications, so what to do? We decided to lead from a quality perspective. We only had 10 or 15 employees, but we committed to hire one person who was totally dedicated to TQM (total quality management). We started to measure everything. We surveyed the students in the middle of the first day on things like classroom temperature, snacks, the instructor, the materials, etc. We would make constant adjustments based on that feedback. The students and the companies sending them to us loved it. It made us different and our business kept growing. In fact, 20 years later, our former training center still exists, while almost all our former competitors have closed. One lesson I learned a bit later was how critical processes are to the success of almost every single business. I am not a process person. Fortunately, at the training company, when we implemented TQM, it resulted in us putting processes in place once we started measuring everything. The team knew what to do and did it well. With our latest venture, a digital marketing company, it was way more complex and documented processes became critical. We hired an outside consulting agency this time. It was expensive in both time and money, but within one year we began to see the ROI. Two years later I was an advocate and reference for that consulting company. Again, we had to make ourselves different from the other thousands of agencies in the US. Efficiency from those new processes became a huge differentiation. 

12) Make a profit! A long time ago, I hear the phrase "if you are not growing, you are dying" and I endorse that. Very few businesses can just remain a small business for the long run. I hear a lot of people say, if I can just have a couple of employees, I'll stop there and just stay that size. I don't really like to manage people anyway. When I hear that, I know they will be looking for employment over the next few years. Unless you are a CPA or some other type business who can build a nice, recurring client base over the years, and maintain it, it's almost impossible to create a consistent revenue stream to just maintain, say three people. Instead, have the attitude that you are willing, able and desire to grow. You can take it slow, but you must grow. And the best way to do that is to always be profitable. Never be embarrassed of making a profit. But don't put it all in your pocket, save as much as you can. Every business experiences highs and lows. The way to make sure you can get through the lows is to have plenty of cushion in your bank account (COVID19 was a big lesson for us all). I'll end this part by saying, if you are losing money, you are a drain on society. Someone must cover those losses. The investors, the banks, the employees, the vendors, and so on. The opposite of losing money is? -- making money.

13) It’s just business. No, it’s not. Telling someone it’s “just business” may as well be completed with “and I no longer care about our relationship.” I confess, I have used this phrase a few times during my career. But I learned to despise it. If you cannot explain a situation any better than "it's just business" you might want to rethink the actions you are taking. Or be totally comfortable with writing off that relationship. If you care at all about that person, take the time to be honest and really explain what is causing this set of circumstances.

14) Everything you want is on the other side of hard. I stole that sentence from NBA coach Monty Williams. When he joined the Phoenix Suns organization, he used it repeatedly with his new team. I think it's appropriate for almost anything you want in life. Want to do well in school? Want a family? Want success at work? Want to start a business? It's all going to be hard. Sometimes it will seem like it is going to crush you. But if you keep your dreams in mind and fight through it, it is always worth it. Always.

I’ll leave you with one last thought; Mark Cuban often says “Perfection is the enemy of success. You don't need to be perfect, because nobody is.” He is 100% right. You don’t have to wait for your product, service, process, video or article to be perfect. Just get started and correct or update as you go. I wish you nothing but the best in your entrepreneurial pursuits. America was built on the backs of people like you. If you succeed, we all succeed.