W06 Reflection: Entrepreneurial Journal

In reviewing this week’s study of “So You Want To Be An Entrepreneur”, I came across what Acton suggests as three critical areas of knowledge for starting a successful business, which include: 1) Having an in-depth knowledge of the industry you are in, including important contacts, 2) The skills to run the company, such as basic day to day operations such as accounting, general management, etc., and 3) Being able to raise money when needed. It’s funny because when I read this, I couldn’t help but reminisce on the beginnings of my company and how I didn’t have any of those things. I had absolutely zero knowledge about the industry I was in, how tight-knit it actually is, and how when you visit kitchen and bath expos you see the same faces every year with a couple of new additions. I didn’t know anything about cabinetry hardware and I knew no one within the industry. The only skill that I had was having successfully sold items online through e-commerce marketplaces since I was eight years old. I had no idea how to manage a business, people, or inventory. I was fortunate that my father gave me $10,000 to jumpstart the business. Ironically, according to the article, the one part that was handed to me (the funding) was the least important skill set needed.

The product and industry knowledge that I acquired progressed organically over time. As I immersed myself in the business and expanded our product offering, the functional side of the products and how they work became clearer to me. I was able to have conversations with industry experts because I was involved with the products every day for a few years. Customers would call and ask questions about our products. If I didn’t know the answer, I would tell them that I wasn’t sure but would find out. When I did gather the answer, it became another learning opportunity, which was knowledge saved in the memory bank.

Managerial skills came through experience and reading. I’ll never forget the first time I had to fire someone. He was actually a childhood friend. It was a pretty emotional experience for both of us and I definitely should have let him go sooner. I don’t hire friends anymore.

Accounting is so important to a business. I feel it may be the most important. I didn’t realize how important it was until I started doing my own books 7 years into the business and found out the many things that my bookkeeper was doing incorrectly, such as categorizing one of our vendors named “Bumper Specialties” as car repair. They sell us $50,000 per year of rubber bumpers that are placed on cabinet doors. It also turned out that she wasn’t inputting our accounts payable. We owed money to vendors that were completely off the books, which resulted in net income figures at the end of the year that were off by hundreds of thousands of dollars. Because of this, we were paying more than our share of taxes. Since having more personal involvement with our books and doing them in-house, I can now trust our numbers to be accurate.

I never had a business plan. Knowledge gained came from wins and losses. I have truly learned everything up to this point “line upon line” through mostly real-world experiences and out of necessity. Although things have worked out so far, I do wish that I had much of this knowledge before starting a business. The journey would not have been exactly the same, but I’m sure still challenging in different ways.