Editor’s note: This is the third column in a five-part series on starting a business at various stages of life.
Q: What things do I need to know when starting a business in my 20s and 30s?
A: Starting a business, like a good paint job, starts with preparation. This means preparing your personal finances, your personal life and building your skill sets.
When you start a business, all of your current creditors still demand payment. You also need to eat. During at least the first year, your personal finances and the business finances are inseparable.
During the year, or at least months, before you start your business you need to pare down your expenses and save money. You also need to figure out where your health insurance will come from.
The best thing a budding entrepreneur can have is a well-employed significant other with a good salary and full benefits. Track your expenses, cut back and downsize. Count on it being at least a year before you are taking money out of your business; if it happens sooner, count your blessings.
Get serious about the time a startup takes and the stress it puts on the entrepreneur and everyone around him or her. If you are going to do this, you need everybody on board, and you need to be prepared to support those around you. You need to discuss what this means for the next few months and years as well as your future. Be honest. Recognize how stressful the risk, uncertainty and lack of control can be for your spouse and kids. Prepare for failure as well as success. Start discussing this early. You need a strong support system.
Finally, prepare yourself. The adage is to learn on other people’s money. Working in a startup is great preparation. You learn from others’ mistakes and successes while getting paid. If that’s an option, take it.
Either way, start filling in the holes in your skill set. Learn to sell if you’re not good at it. Learn accounting and finance if you don’t have that knowledge. Learn the basics of marketing.
When it’s your company, you will probably need to do most if not all of these, so build your skills before you start.
David Deeds is a professor in the Department of Entrepreneurship, the Schulze Endowed Chair in Entrepreneurship and research director of the Schulze School of Entrepreneurship at the University of St. Thomas Opus College of Business.