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Published 13 June 2012 06:53, Updated 14 June 2012 04:16
Painful beginnings ... “It isn’t exhilarating, it is lonely,” he says. “I was starting to question why I did it.” Photo: Arsineh Houspian
Starting a business is inevitably a leap into the unknown. Is the leap best taken alone or with others?
A glance at the BRW Fast 100 shows that 45 of the top 100 started out with two founders. But of that 100, 40 founders started their businesses alone. Eight had three founders and six had four.
Those who do start businesses themselves say that it can be lonely, especially when it entails moving away from a comfortable job in a large corporation.
A director of roi.com, a Melbourne-based search engine consultancy, Ewan Watt, says starting out alone was stressful. He says he spent 7½ years at Melbourne IT, which gave him his grounding. “I always wanted to have my own business,” he says. “I spoke with my wife and she gave me a vote of confidence.”
In 2006, Watt left Melbourne IT and started his own business, seeking to help businesses generate online marketing campaigns.
Expectations were high, but the reality was very different. “It isn’t exhilarating, it is lonely,” he says. “I was starting to question why I did it, considering the amount of work I was doing. At a minimum it was 16 to 18 hours a day – and then you worked on the weekend.
“[For my wife] in the short term it was one of those dynamics where ‘I let my husband do this, so I have to be tolerant’. It is a bit of a novelty in the first three months and then the novelty wears thin and you start to question why you made the decision.”
Watt says friends often find the challenges sole business start-ups face hard to understand.
“Not many people relate to your circumstances. And doing it from home is the hardest thing because you start asking, ‘What is home and what is work life?’ ”
For Watt, these stresses lasted about six months. When he began employing people as work started to come in, the situation changed.
“As a result of that I really needed some premises,” he says. “I found that situation really helpful to me. But then I got a monthly rent bill of $1500.
“If you ever want a kick up the backside, then that is the time. In hindsight, a second person would have been a great support.
“Now that I have 15 to 16 people, I can get away without making heroic efforts but I need more teamwork. It is now a mini corporation.”
The managing director of mining industry media consultancy Collins Street Media, Ian Howarth, says starting alone was a challenge. “It is a lot of work,” Howarth says.
“There is the uncertainty of cash flow but once the first lot of invoices comes in, you are away. The biggest [factor against starting alone] in the short term is access to cash.” Howarth says the transition from working in a corporate environment initially was a shock.
“My business is a very people-, client- oriented business,” he says. “You do find yourself a little bit isolated. In my case, all of a sudden I was out of the information loop. But I knew that was going to happen.
“It would probably have been easier with a partner but I knew my patch relatively well so it was easier.
“Still, there are unexpected psychological impacts from working on your own. You no longer have the big corporate cuddly employer. But after 30 years in a particular career I was ready [to do something different].”
The principal of the media consultancy Monsoon Communications, Rudi Michelson, started out with a partner, Richard Allen.
He says it worked well, although there were challenges. “It is a lot easier to start with a partner,” he says. “It is a shorter bridge to cross than going out on your own. When you are embarking, it is not bad to have someone at your side who is skilful and resourceful.”
Michelson says the greatest challenge initially was to get clients in the door. He says it was a great advantage to have two people working on the problem.
It was also an advantage to go to client meetings with two people representing the company.
“The difficulty with a partnership is that you might agree on most things but you do not agree on all things,” he says. “When that happens, there is a bit of a stalemate.
“That is why I think a third person might be quite useful, because they can be a circuit-breaker. What you do with two is that if you don’t agree, you don’t go ahead.”
Michelson says getting the first few clients was a thrill, one that he acknowledges has somewhat faded after 13 years in operation.
“The biggest thing is fear of failure,” he says. “The greatest challenge is to get clients in the door. Once you have got them, you must look after them.
“There is a big difference going from a senior corporate job to running your own show.”
Michelson eventually parted company with Allen (see “Breaking up can be easy”) but he says they remain good friends. “You have to recognise when the time is up with a relationship.”
Protecting personal relationships is also a challenge for solo start-ups. Watt says it was lonely. It did pay off. He now has the biggest search engine optimisation business in Australia. The company was rated the 30th fastest-growing online marketing company in Australia last year. Watt also founded PYI.com.au, a protection and online reputation management organisation.
“Who the hell do you talk to?” he says. “You can’t talk to you wife or partner because that is a recipe for disaster.
“You find in your relationship you are talking about business all the time. You haven’t got any support when you need support. Maybe a business coach might have helped. You want people to give you business support, help you through.”