Joseph Laforte is team leader at Par Funding, a small business alternative finance solutions provider working with entrepreneurs and business owners to obtain supply chain financing, venture capital and invoice factoring solutions. With over 15 years of experience in business finance and venture capital, Joseph leverages his expertise to drive meaningful solutions for his clients focusing on custom tailored products to fit his client’s needs and requirements. Joseph has led countless business to growth and financial success. He has generated, collectively, over a billion dollars in total sales on behalf of these companies.
Most recently, Laforte was responsible for the firm’s new business development team, which includes offering custom solutions to the healthcare, insurance, hospitality, financial services and software & technology industries. Since joining Par Funding, Laforte has held various prestigious positions within the firm, including portfolio management, business development and national expansion.
Expect a Wage Cut
A study done by KPMG stated that seventy percent of start-up founders admitted they now earn less as a company owner than they did in their former jobs. Only eleven percent of start-up owners mentioned that they now make more than they did before leaving their regular employment. While many founders aren’t happy with making less money, they also admitted they saw it as a short-term hardship that would help get the company going. If you’re able to attract investors, that could also affect your salary as an owner. However, the needs of the start-up company are going to outweigh your salary in the initial stages.
Another thing you’ll need to ask yourself is how long that short-term salary cut might last. While many start-up owners see a wage cut as a necessity at first, it can feel like a permanent issue for a while. It can take five times longer than planned to create a viable company, which means that wage cut might last substantially longer than expected.
Many start-ups use personal finances as well as loans from family members and close friends. So, you’ll need to invest your capital into your idea before you go out and seek funding. That means you’ll not only need to fully believe in your idea enough to risk your life savings on it. You’ll also need to persuade other people to invest in your plan as well. When your company does start making profits, it’ll feel great, but it can still take a substantially long time for your earnings to return to what they used to be before you left your regular job.
If you feel you have the patience to take this financial hit and you genuinely believe you’ll get a windfall once your business takes off, then you’re ready to make the leap.
Expect to Work All Hours
The KPMG survey mentioned earlier also suggests that ninety percent of start-up founders work more than forty hours a week. The average workweek for a start-up founder is about sixty-for hours long. Many start-up founders admitted they bring devices to bed with them and continue to work well into the night. On top of this, forty percent of start-up founders also admitted they hadn’t had one day off in three months, and twenty-three percent stated they hadn’t had three days in a row off in more than one year. So, you’ll need to be prepared to risk your work-life balance a bit.
Most founders of start-up companies believe in their ideas and are prepared to work long hours. However, working like this doesn’t always feel sustainable. That’s why many entrepreneurs develop a dependable personal network for assistance. For example, Amy Chang left her lucrative career as Head of Analytics at Google to start the business Accompany. Chang was only able to make a move with her husband’s help.
It’s Tough to Find Good Talent
Another issue you’ll need to think about is finding the right types of employees for your company, which can be a real challenge. Many entrepreneurs agree that hiring the right people for their companies was one of the most challenging parts of achieving success with a start-up. However, finding the right talent will help bolster success so that it can make or break your start-up.
So, how do you find the right people? Culture Index suggests finding talent that has experience and skills that work with your own. If you know, for instance, that you have specific weaknesses as a leader, maybe you can find an employee that can balance those issues for you. Instead of making all of your employees like you, let them be themselves. Having a diverse group of people is essential for successful team building, and it also opens the door to a lot more innovation.
Also, avoid overpromising things to your employees. Instead, watch their performance and help them achieve measurable results in small steps. By monitoring your employees carefully, you can get rid of any issues early on and keep those employees that want to succeed with you and your ideas.
Be Willing to Delegate
Many start-up founders have difficulties with marketing and closing sales. You won’t be able to do everything for your business yourself, so you’ll need to learn some excellent team management skills. That means learning how to delegate tasks and trusting in your team so that you can empower them. Peter Drucker, the “father” of modern management, feels that delegating authority to your employees helps motivate workers. When you show that you trust them, your employees will feel more confident and appreciated. That means they’ll be less likely to leave your start-up as long as you treat them well.
Joseph Laforte of Par Funding encourages entrepreneurs to explore and be prepared for the journey they are taking, focusing on local economic indicators and knowing what’s down the road will give you the mental preparedness for what’s to come. So, if you have an idea for a start-up and you are thinking about leaving your stable job for an entrepreneurial experience, you might want to take a minute to think about what you’re considering preparing to make one of the most significant decisions of your life.