I was at a networking event a few months back and while having dinner, I happened to be seated next to a bright young man who was completing his MBA. We talked about many things, one of them being entrepreneurship. He was interested in this topic since he planned one day to launch his own business. Outside of school, he was very passionate about tennis. In fact, he had been giving private lessons for several years and he was now interested in turning his hobby into a full fledged business. So what was holding him back? In order to launch his business, he needed several hundred thousand dollars in start-up cash. His idea was to create a full fledged tennis school and training center. The high cost of his venture prevented him from moving forward.
There is nothing wrong with thinking big. However, that being said, we also have to be realistic and willing to start small. The ‘big picture’, if too rigid, can get in the way of progress. With the gentleman and his tennis school, there was nothing preventing him from starting his business. In fact, one could argue that he was already ‘in business’ since he was generating revenues as a private instructor. Instead of waiting around for a big infusion of cash, he could still move forward by growing incrementally. He could think of ways to increase existing sales. Eventually, he could hire another instructor or possibly outsource the teaching altogether. With more time on his hands, he could then work on introducing new services, creating partnerships, etc., things that will take his small business to the next level.
Another problem with having an ‘all or nothing’ attitude is that it prevents us from developing our creativity. A small business owner constantly needs to be creative in order to solve day to day problems. They should never let obstacles get in the way of progress. If they can’t get a loan for their business, they can try bootstrap financing (raising the funds from friends, family, co-workers, former clients, etc.). I once met an extremely successful real estate investor who raised his initial investment capital by writing personal letters to every doctor and lawyer he could find. He figured people in these professions made a lot of money and some might be interested in being passive real estate investors. What if you don’t have money to spend on marketing? You can use low cost marketing techniques like direct mail, pay per click, or referral marketing. What if you don’t have money to pay for a professional website? Have you considered bartering with a small web design company who has an equal need for your services? The point is: there is a solution to every problem if we’re creative enough.
One final problem I see with the ‘all or nothing’ attitude is that we shouldn’t feel entitled to receiving large sums of money for a ‘great idea’. Investors are not there to make charitable donations. Why should I give someone $500k of my hard earned money just because he or she has a great idea? Investors spend money to make money. They want to see a great product, new markets, strong initial sales, an experienced management team or board of advisors, exclusive partnerships, etc., thing that will support the future growth of the start-up. There is no problem with dreaming big. But as the saying goes: “A journey of a thousands miles begins with a single step.”
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