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Should New Business Start-Ups Fake It or Not?

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Should New Business Start-Ups Fake It or Not?

Should New Business Start-Ups Fake It or Not?

Start-up entrepreneurs often struggle between looking good to outsiders and being honest about where they are in their company’s development. Do you know when to fake it until you make it and when to fully disclose your position?


From the title of Danielle Tate’s article, Fake It Till You Make It For Startups in Forbes September 22, 2014, I assumed was going to write a rebuttal to her piece.   Too many people who want to start their own business often pretend rather than have the requisite knowledge and skills to do what they are claiming. So I oppose the concept of faking it until you make it under the scenario that you pretend to be an expert where you are not and sell yourself that way.


Yet, Daniel’s piece has nothing to do with how I interpreted the title. She gives a wonderful reminder if you are contemplating or in the midst of a new start-up that being in a garage or basement is not only all right, but also exactly where you perhaps should be until you are past the bootstrapping phase. In other words, working in the extra bedroom does not minimize the value of your concept, nor how you should present yourself or your ideas when pitching it outside your makeshift office.


Too many startup companies don’t feel legitimate until they have an official office space and rush too quickly into this type of fixed costs before they can afford it. (A fixed cost is one that does not go up or down with your volume of business and has to be paid whether you are selling products or not. A variable cost does what it’s name implies, it varies with your sales so you do not incur these costs unless you are selling something.) Adding fixed costs takes valuable resources away from functions that will yield revenue.


Don’t let the allure of having something to prove your company’s value to customers, employees or even investors fool you into taking this step prematurely. Your idea is valuable, wherever you house your office and do your work. We ran our last service business for two years out of our home—employees and myself answering phone calls and emails from my kitchen table—until we built our office space. It freed money to spend on quality employees, expansion of our product offering, and other needed expenses—while our business grew. Our customers were getting the best service possible and really had no idea they were talking to us from my kitchen. My banker did not know either. However, I can comfortably say the bank would have been pleased I was not adding fixed costs to my operations since that improved their chance of getting paid back!


When starting out, more important than a brick and mortar building are your company’s partnerships with others who can advise, promote, and connect you and your idea to the right people and organizations. Although you don’t want to be shy soliciting partnerships with big names or influencers, partnerships with smaller names or organizations are also essential for fast growth. Finding ways to collaborate with others so they become your ambassador is always a key to rapid, early success.


So when it comes to presenting your projections and your current progress – be real with customers, investors and employees, don’t fake it. Yet, when you are presenting your mission, your concept, and where you are heading speak as if you already are there. Don’t apologize for not having a glossy convention booth or big office if those are not essential for your business. Don’t minimize your ability to get there. Think big. Act big. And speak with the confidence that it has already happened. Because in reality, it happened the minute you made a decision to act. You have conceived your idea in your mind, which is the place where all great things begin.


When John Kennedy decided to put a man on the moon and return him safely to earth he did not talk to Congress or the American people with words like “I think we can…” “Maybe if this goes well we will…” Nope. He made a decision and spoke about it as a completed fact that only needed to be materialized. You, too, need to present your ideas as successes about to materialize, not wishes or dreams. If you believe in your business and present it with the determined faith that it will be, potential customers, investors and employees will all see it as happening, too.

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