The most practical and valuable advice on how to make money and be successful comes only from those people who have tried it. If you are lucky enough to meet one of them, listen carefully. His lessons are born from the harsh experiences of the real world.
Also read: 51 easy-to-start profitable businesses.
Most of the advice I have shared on this subject comes from my study of the habits of the rich and my books. Rich habits, Rich kids, Change your habits change your life.
However, I am one of those people who have tried, and even more important, I am one of those people who have failed.
Over time I have learned that failure offers the greatest lessons.
Failure offers the greatest lessons Click To Tweet
The story of my first failure.
In my entire career, I have started 4 companies. One of those 4 start-ups failed and this article will deal with that failure. Also, how it almost destroyed my family and what lessons I learned from failure.
For starters, my first foray into the world of entrepreneurship was an accounting firm. I started with two other partners. We landed a lead client and proceeded to build our business.
We went from having $350,000 in revenue per year to over $600,000. We did this in just three years. Choose your companions very carefully. Success is much easier when you have great partners.
Also read: This company went from 0 to 60 million in just two years.
I left my successful accounting firm when a friend who worked in private equity offered me a very tempting opportunity.
He wanted me to be the CFO (Chief Financial Officer) of one of his potential investments. His idea was a credit card concept that would work in car dealerships.
The company would be located in Rhode Island, which meant that I would have to be away from my family in New Jersey. My children were six, seven and ten years old at the time. I was basically giving up my family for a big salary and a successful accounting firm.
Yet I was one of three individuals who was going to own a new start-up; that if it was successful, it would make us millionaires. Success requires risk and sacrifice.
Also read: What is a start-up and what is a company?
On January 2, 2000, I cried as I left New Jersey, my home, my wife, and my children; who loved more than life itself. During the 4 hour drive to Rhode Island I felt inside that I had made a bad decision. Trust your instincts.
It took much longer than we expected to get a credit card issuer. Our expectation was between 3 and 6 months, but we hadn’t achieved it for 12 months. Success takes much longer than you expect.
The private equity firm that made it possible to start this new project began to take measures and one of them was the reduction of our salaries. When we objected, they cut all the funding, so we had to agree to their terms. He who controls your wallet, he controls your life.
One day I received a call. It was my wife informing me that my salary had not entered our bank account. For 3 months I worked without pay. My wife was beside herself with worries. The stress was so overwhelming that she sometimes couldn’t control her breathing. The search for success is stressful.
Finally, we were able to secure a credit card issuer and our paychecks resumed. Things were looking up, and I felt safe enough to move my family to Rhode Island.
This meant taking my kids out of school and away from their friends. My oldest son and my youngest son cried for two months after the move. They missed their friends, they missed their school; and they missed New Jersey.
I hated myself for what I had done to my children. The pursuit of success affects your loved ones.
Also read: How to make the sacrifices that no one is willing to make.
The second hurdle surprised us all. The hard part of the startup was supposed to be getting a credit card issuer. The easy part was supposed to be hiring car dealers.
Unfortunately, we had very little success initially getting car dealers to sign up. Of the 10 employees working on the project, the only one who had no experience with dealerships was me.
Car dealerships weren’t aligning with our credit card program; as the experts had promised. Assumptions are worthless. Defy all assumptions.
We then hired a credit card expert as the new CEO to help make things better. The new CEO and I were able to secure two large groups of dealers that signed up for the program. In total there were 500 dealers. We were ecstatic. We were very close to success. The pursuit of success can be exhilarating.
Then our credit card insurer was acquired by a very large bank and they shut down our program. Unexpected things will happen, in the search for success. Luck plays a critical role in success.
This venture lasted 4 years to fail. The CEO and I were the last to the front. The others abandoned the ship or were forced to do so.
That failure completely changed my life and put my family in great financial jeopardy. I sat in my car in a park near my house the morning after it was all over and cried like a baby. I had zero employment prospects and no way to care for my young family.
That was the lowest point of my life. Failure is humiliating and will drag you to your knees.
Also read: 7 habits that lead to failure.
However, I got up and finally recovered. Not only that, I was also able to put three children through college. She currently runs three businesses, two of which are start-ups. Success requires you to overcome adversity.
Find below the most important lessons from failure I learned:
Lessons from failure.
- Choose your partners carefully:
Success is much easier when you have good partners. If you don’t have them, failure is inevitable. In every new venture make sure to partner with people who know how to do it, who are positive and have a hard work ethic. Verify that your partners have real industry experience.
- Success requires risk and sacrifice:
You will never achieve success if you don’t take risks and sacrifices. The sacrifices you will make will be many. One of the most important will be being away from your family.
- Trust your instincts:
When I talk about your instincts, I mean your subconscious mind. Your subconscious mind picks up things that would otherwise be invisible to you. Always listen to that inner voice. It is your instinct that tells you what to do or what not to do. That voice gets louder when your emotions are at their highest.
Experiencing success will take a long time. And it will always be much more than you expect.
- Seeking success is stressful:
Things will go wrong. When they do, they create enormous stress. That stress affects you, your loved ones and your business partners.
- Create your business with your own money:
When you are the source of your capital, you are in control. When you depend on others for capital, they are in control. You will have to do what they tell you to do. You will be his slave.
Also read: How to start a business without asking for a loan.
- Assumptions are worthless:
Assumptions can make everything look rosy. Most of the assumptions in a business plan are wrong. Always test all assumptions before accepting them as fact.
- The pursuit of success is exciting.
There will be ups and downs on your road to success. Shorter than tall. But the highs make it all worth it.
- Success requires good luck:
In the pursuit of success, unexpected things happen. Sometimes they are good and sometimes they are bad. To some extent, success and failure are out of your control. Luck plays a critical role in success.
Also read: The importance of luck when you create a company.
- Failure is humiliating:
It will bring you to your knees. Failure is a totally emotional experience. It can destabilize you financially. It can destroy your life if you are weak.
- Success requires you to overcome adversity:
The obstacles, the falls, the wrong assumptions, the mistakes and the unexpected; they can stop you on the way. Sometimes you can overcome those obstacles and other times you can’t. Those who succeed are able to overcome adversity. Those who fail fail to overcome them.
- Take control of your business:
Control means owning more than 50% of your business. Those who have ownership control of your business; They control your business, your future and your life.
Test new concepts before immersing yourself full time in any company. Dive in full time only when the business model has been proven to work.
In every endeavor, things will go wrong. Make sure you have funds set aside to survive if you fail.
- Understand the rule of three:
Understand the rule of three: it takes three times what you think, it costs three times what you expected, and the revenue and profit will be a third of what you predicted.
- Business plans are nonsense:
Business plans are not really what is on paper. They are full of assumptions. Never go into a company solely on the basis of a business plan.
Also read: When and why it is good to make a business plan.
- Have a powerfully strong marriage:
If you have a weak marriage, your family and business will fail.
Only hire employees when you are successful and the business model has been shown to work.
- Stay in constant contact with your network:
Pursuing success requires a great deal of time. It’s easy to lose touch with your friends and former colleagues. Don’t ignore your relationships. You will need it if you fail.
This article was originally published on richhabits.net. Its translation and publication in ModoEmprendedor has been authorized directly by the author and cannot be reproduced by any other means.
And remember that if you are really interested in creating your own business, you can purchase our book “How to create a company while working: Discover how to manage your time, manage your money and motivate yourself while creating a company and working for another” , where you will find all the information you need to found your own company, without having to leave your job.
