This originally appeared on LinkedIn. You can follow Joel Peterson here
I started my first business at age 11, selling tomatoes, cucumbers, carrots and squash that I grew myself. It was all planted from seed on a tiny plot of land behind our two-bedroom house in Okemos, Michigan.
My maiden venture yielded a number of useful lessons that have stayed with me throughout my 40-year career in business. If you’re the parent of a would-be entrepreneur (or an enterprising young LinkedIn reader), perhaps you can find something in here that’ll help early ideas take root.
My customers—or “relevant market,” as I’ve since learned to call them—lived in a small dirt-road subdivision not far from our house. By summer’s end, we had a dozen regular buyers to whom we brought produce to cook up for family dinner.
Our “delivery fleet” was a red Radio Flyer wagon, which we piled high with vegetables before we made the neighborhood rounds every other day.
My “angel investor” was my dad—not so much a venture financier as a dad supporting a son. He advanced me the capital for seeds and fertilizer, allowed me access to his water supply, and provided a “no-cost equipment lease”—that is, he let me borrow—a single hoe. My “supply chain” was the town’s hardware store, and my sole employee was my ornery 6-year-old brother, who regularly threatened to quit.
By the end of the summer, we took a full accounting. Our income statement after all expenses showed the kingly sum of $14. (Not too different a return on work from the airline industry!)
The early taste of success was exciting, and I wanted more. Fifty years later, I’ve started a half-dozen companies, provided growth capital to more than 100 others, served on many boards, and taught thousands of MBAs how to manage a young enterprise. But most of what I know about launching, nurturing, and running a business I learned during that humid Michigan summer in 1958.
Here are some of the principles of good business that became clear to me right away, and have only grown more important since:
- Don’t expect immediate (seed stage) results. Crops take time to germinate.
- Plant extra seeds, thin the crop, and expect the strongest plants to reach maturity.
- Don’t dig up carrots to see if they’re still growing. Have faith in the cycle.
- Pray for rain and sun, but make your own luck by weeding and watering.
- Harvested vegetables don’t keep long. If you wait too long to discount the price on your inventory you’ll end up “eating” it.
- A garden needs constant nurturing—don’t go on vacation when it’s time to harvest.
- Sales is everything. So, pay your salesmen well—or at least make sure they’re cute little fellows pulling red wagons.
- When you’re out of cash, you’re out of business; so be frugal like a farmer.
- Keep your customers happy by delivering fresh product before it’s needed, not after. Timing the market is all-important.
- Make sure your investors get a return—and don’t forget to thank them. Without backers, there’s no lettuce for anyone.