Ted Leonhardt’s plunge into entrepreneurship was just that — a plunge. After working for a small graphic design agency for eight years, he lost his job and was facing an uncertain future.
“I was in survival mode,” he recalls. With a mortgage and a baby, he had to do something quickly.
He caught a break when one of his former employer’s clients encouraged one of their own clients to hire Ted — if he started his own business.
He thought starting his own business was his only option to provide an income for his family, so he started his own design agency with a partner and two employees in 1976 (and $750, more on that later).
“I really enjoyed running my own business,” he says. Still, he admits that it wasn’t without challenges — or rewards.
Starting a business may insulate you more against job loss (as in Ted’s case) or help you make more money.
Of course, you can also lose money and end up in a worse financial situation than when you started. In my research for this article, I found different statistics about business failures. Basically, 50 to 80 percent of businesses fail within the first five years of operation.
But Ted founded and ran a successful business, so I asked him what tips he could share about how to do that.
1. Treat your business like a business, not a hobby
Ted emphasized that a business provides something to people that they will pay for. In contrast, a hobby is something you’re good at but that people may not pay for. And hobbies are good, he says; they’re just not businesses.
So before you start your own business:
- Find your expertise — something you know more about than the general population. But you can’t just know about something. You must love it, be fascinated by it, and want to learn more about it. But also …
- Make sure it’s something people need — and will pay for. Your expertise must intersect with something that earns revenue.
2. Be frugal – in business and in life
When Ted started his business, he and his business partner each chipped in about $750. The business was started without debt and never took on any debt while he owned it.
“Frugality was my grounding,” he says. “I was raised by frugal parents. They saved and drove weird cars. My dad worked for Sears for 40 years and clipped coupons every Thursday to go shopping on Fridays.”
Ted was always frugal. Despite dreaming of a more consumeristic life (as he read Life magazines back then), his parents’ frugal example stuck with him. Other than the occasional car loan or mortgage, he never had debt.
While he admits college was much less expensive then, he made it through without any student loans by garnering a combination of scholarships, working everywhere, and taking a loan from his dad.
3. No matter what business you’re in, you’re in the people business.
“You have to make a commitment to your people,” he says, whether it’s a client or an employee. “It’s all about the people. Always.”
In fact, he says his greatest challenge running a business was that it was difficult to resolve issues with people, whether with his employees or his clients. Any skills he has in this area today, he credits with learning things the hard way.
“I made some horrible mistakes,” he says, citing an example where he once sued a client. “Instead of suing them, I should have tried to understand where the client was coming from, and then tried to help them.”
He says it’s so important to be clear in your expectations of yourself and others. And, as things change, keep providing clarity. Resolve issues, as they change too.
4. Don’t fear fear.
“Fear is normal,” he says. “It just means you’re human.”
Still, Ted cautions not to avoid your fear. Deal with it. For instance, even though he likes public speaking, Ted still gets nervous.
But he says that action inspires confidence. As you face your fear and conquer it, you’ll get more confidence to face tricky interpersonal issues or other things that scare you.
As controversies arose, he grew more confident that he could resolve them — and if things didn’t work out and he and a client (or employee) had to part ways, he knew he had tried his level best.
His tips can help any kind of fear. Most of us fear negotiating. Today, Ted mentors other creatives to help build their negotiation skills.
5. Adversity can make you stronger
No matter what challenges you’ve faced in life, you can use these experiences to make you (or your business) better.
For example, Ted was part of the foster care system before being adopted. While I won’t speak for Ted, I can see my own adopted children’s fragile pasts have created challenges that I will never face.
Ted credits his persistence and resilience to his past. “If I face obstacles?” he says, “No problem! I find a way. And because I want to overcome obstacles, sometimes it forces me to address issues that I am afraid of.”
Dyslexia was a challenge for him. He wasn’t a good student in school and actually flunked 4th grade. But when he attended Burnley School of Professional Art after high school, things changed. “I found my people,” he said, and his grades changed to As.
He taught himself to read and write in a legible manner. “Society expects you to do these things,” he says, whether you have dyslexia or not.
But he believes dyslexia actually helped him to become a more nimble businessman, seeing solutions and opportunities that may have been invisible to others.
Today, he also counsels with kids who are from hard places, even harder places than he came from. He understands why they act out; but he cautions them to understand that, even though they have reasons for their pain, sometimes their actions can cause irreparable damage.
To paraphrase a comment from his website: You can be a victim of your adversity, or you can overcome it.
6. Differentiate your business from the competition
Ted was always looking for business and ways to differentiate his business from his competition. He used his imagination to find new opportunities to get in front of prospective clients. This led to public speaking and other types of pitches.
He saw an opportunity to do business in a slightly different category in the ’80s. It was fortuitous because, at that point, businesses were starting to see the value of providing their customers with the service Ted’s company could provide.
Another bonus? Pursuing this business line put him in contact with leaders of big companies. He found that looking at his business strategically was yet another thing that set him apart from the competition. His business “took off like a rocket.”
7. Build a community
To combat the loneliness you face as an entrepreneur, Ted recommends that you find yourself a community. Actively seek them out.
Become part of an association. Not only can they help you with connection, but they can also help with business challenges. When Ted went to his first conference, he looked around and thought, “These people can really help me and my business!”
“Some were ahead of me; some behind me — but we all understood each other.”
In order to pay his living expenses while starting his business, he hustled. He used his community to find business. In the 1980s, professional printers were the glue of his industry. By establishing relationships with them, Ted found that they were happy to refer clients and leads his way.
8. Never retire!
In a rare move for a design agency (and one Ted is still proud of), Ted sold his business in 1999. After selling, he started consulting and still does that today.
He also moved to London for a couple of years to work for the agency that eventually bought his business.
After he’d sold the business, he says, “I felt like Robert De Niro in The Intern. I wasn’t sure of my worth or my purpose without a job to do.”
But actually, he prefers his consulting work and new schedule … because he doesn’t have a schedule! He has the pleasure of managing the work and doing the work, something he was not able to do when he owned his own business.
“I am having so much fun,” he says. “I loved running my business too, but this allows me to design and work with about eight contract freelancers.”
Starting and running a business was beneficial to Ted’s financial position; but even more than that, it paid big dividends for the impact he is able to have on others … something he finds even more satisfying.
Are you in business for yourself? If so, what made you decide to start your company? Can you offer any tips to help others succeed? If not, would you ever start your own company? Share your thoughts in the comments!
[Editor’s note: Ted Leonhardt reached out to us last August when we asked readers to tell us about their experiences as business owners. Thanks for sharing your story, Ted!]
GRS is committed to helping our readers save and achieve their financial goals. Savings interest rates may be low, but that is all the more reason to shop for the best rate. Find the highest savings interest rates and CD rates from Synchrony Bank, Ally Bank, and more.