Tuesday, July 28, 2015

Entrepreneurial Nightmare: When Family & Friends Don't Support You

The decision to become an entrepreneur will ultimately be very rewarding. As a California resident I have found that "at will" employment, though designed to prevent indentured servitude is being abused to wrongfully terminate the employment of thousands of people. Many companies mislead employees into believing that if they report matters such as sexual harassment, or offer solutions for opportunities for improvement, they will be valued and even rewarded. This deception has left many employees disgruntled or unemployed.

Self-employment places you in charge of your career. You directly effect change in your community as well as set, and maintain your own workplace standards. As an employee one may be required to complete trivial, meaningless tasks, the reasons for which they may never learn. As a business owner, every task you assign or complete is an integral part of helping your business succeed. But what is an entrepreneur really? The Oxford Dictionary defines it as "a person who organizes and operates a business or businesses, taking on greater than normal financial risks in order to do so." The fact that half of the definition is taking financial risks is crucial. It is this part of the definition that isolates entrepreneurs from their friends and families.

The Decision

Once you have made the decision to become self-employed, you immediately begin planning. You carefully choose your industry, your approach, and your degree of involvement in the day-to-day operations. Typically, a person is already unemployed or is a homemaker when this decision is made. An open schedule becomes an opportunity to capitalize on your free time. Your family may see things differently.

People don't seem to care how you came to be unemployed. They care about how hard you try to obtain another job. From day one you are expected to begin and maintain an intensive job search. Even if that takes months and you fail, you are expected to accept substandard, underemployment. You may try to explain how your entire paycheck would go to daycare making the job useless, but you are still expected to accept deplorable working conditions rather than remain unemployed. As an entrepreneur, you know this line of thinking is ridiculous and unproductive. You've figured out that the same time investment can be used to lay the foundation for a long term, successful career.

Your family members prefer the security and stability of gainful employment over self-employment. Self-employment is risky. But no matter how many hours you work for another company, at least some pay is guaranteed. Some income is better than none. So when you tell your family that you have made the decision to start your own business, what they really hear is that you've chosen a life of instability. Your family members don't want to support a decision they believe does not contribute to your stability and well-being.

When explaining your decision to your friends and family, do so as you would in a business meeting. Explain the need for such a business. Validate your findings with citations from extensive research. Don't just print information from Google, Bing or Wikipedia. Provide projected profit and loss reports. Provide realistic timelines for your business goals. If you want your family and friends to see you as a business owner, behave as one. Always remember that you need, if not want their support. You should never stop working to earn their support. You don't get to involve your friends and family in your fundraising while ignoring or not allowing their constructive criticism. They are invested in you both emotionally and physically. Don't reduce them to mere financial devotion.

The Fundraising

No matter the industry you've chosen, your business will need funds. If you have a non-profit, the fee to turn it into a 501(c)(3) is expensive. If you are a for profit company, you need investment capital to produce goods or services. Strangers will not contribute to your entrepreneurial venture. There has been a lot of buzz about crowd fund sites. Sites like Indiegogo call upon strangers to be benevolent and make donations to your business. But the reality is, more often times than not, people are funded by donations from their family and friends. Your family members are already of the belief that you should be working for someone else. They are worried that your business venture will fail. As a result, they are reluctant to provide financial donations or support. Where will that leave you? What happens to their hard earned money? Should your business fail, not only will they bear the weight your own disappointments, but also they will be less likely to invest money in your next attempt at self-employment. There is a great amount of trust involved in supporting an entrepreneur and even more trust once money is exchanged between friends and family.

Crowd funding sites are the most popular form of fundraising. They are also the source of bitterness and frustration. The best way to advertise your fundraising campaign with a crowd funding site is to share a link to it on social media and email it to all of your contacts. But most of your social media connections and email contacts are friends and family. Basically, crowd funding is a high pressured way to ask your friends and family for money. Not only are they apprehensive about giving your business money, but now they feel their relationship with you will be defined by whether or not they contribute to your fundraising campaign. Each time they see the link reposted on their wall or in their newsfeed, or emailed to their inbox, they wonder what will happen should they choose not to donate. They begin to dread your phone calls or texts for fear of the possibility that you're going to bring up the fact that they haven't contributed yet. Remember, that your friends care and your family loves you. But this does not obligate them to support your business financially. It's uncomfortable. And sometimes, they don't want to tell you "no". It is possible to support someone without having to do so financially.

The better solution is to seek volunteer assistance from friends and family rather than ask them for money. Ask them to circulate flyers to assist with your publicity, to answer phones one day a week, to help package goods, etc. Utilize their current business to your advantage and consider it the equivalent to financial support. Ask your friend who works at an office supply store for free business cards or discounts. Ask your cousin who works at the post office to help you with postage or delivery. Your caterer friend may be willing to cater a lunch meeting where you will meet with potential investors. Involve yourself in your local Chamber of Commerce. Every knows someone who can provide you with what you need without actually giving you cash.

Establishing a Customer / Client Base

The most difficult part of starting a retail business is establishing a customer base. Most products or services are improvements upon existing products or services. This means your product or service isn't very unique and is automatically faced with competition before you open for business. You have to convince faithful customers and clients, that what you have to offer is better in quality and value. You also have to compete with the burgeoning DIY Revolution. Search engines return countless results for recipes for homemade cleaning supplies, restaurant recipes, techniques for crafts and repurposing. No matter how great your product or service, there will always be someone attempting to replicate what you've created for a lower cost.

This is why having those closest to you as your initial customers can be beneficial. Consider the way a pyramid scheme works. You recruit two other people, who each recruit two others, etc. If you convince your family and friends to switch to your product or service, then their family and friends will likely follow. If you make your own jewelry for example, your family will buy and wear that jewelry to work, to a restaurant, to the movies, everywhere. There will be at least one potential customer who sees your jewelry and will want to purchase from you. This is how home retail begins.

Unfortunately, not all family and friends want to buy your product or service. They like what they have and don't see a need to fix what isn't broken. More importantly, if they don't like what you have, there will be uncomfortable tension if they were unhappy with their purchase. We've all heard the saying, "Don't do business with family." Imagine the holidays when that chair you built breaks or that dress you sewed didn't fit. You may be fully aware of the high quality of your work, that doesn't mean that everyone else is.

The solution if you have family that isn't ready to put their faith in you is to find out why. Hold a short presentation. Show them how the product works and for how much less than the original. Perhaps it isn't as cheap as the original. In that case, show them how it's value is higher. Let them give you feedback so that you can be prepared for questions and concerns from other potential clients. Attend expos, conventions, and boutique sales to showcase your product or services. Exposure is your best friend.

Remember, your family and friends love you. They want what's best for you. The idea of venturing out on your own might be terrifying for them. Listen to their concerns to better prepare you for potential difficulties in establishing your career. Entertain constructive criticism. Lastly, don't make your family and friends your personal lender or demand that they be the first in line for your product or service.

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