"I think the basic advice, even though most people ignore it -- plan [for it] to take twice as long and cost twice as much," Boris Schlossberg, Managing Director of FX Strategy at BK Asset Management, told StreetID. "I would even say three times as long and three times as much because everything in the financial industry right now is incredibly regulated, highly overseen."
Schlossberg said that there is a "huge barrier to entry" right now. He believes that this will prove to be a positive in the long run "because it is hopefully going to provide a good degree of investor protection."
"But for anybody who is looking to start a financial services firm, it is extraordinarily expensive, extraordinarily time-consuming, and it can be extraordinarily frustrating for someone that has an entrepreneurial spirit because there's a tremendous amount of bureaucracy overlay now on the whole business," Schlossberg warned.
Know Your Regulations
Huzefa Hamid, founder of TheForexRoom.com and a contributor at DailyForex.com told StreetID that it is important for aspiring entrepreneurs to understand the regulations and licenses that they may need.
"Know what value you're giving your clients relative to more established players," he said. "Make sure you present yourself professionally, whether it is through the Web or other media. Ask yourself, 'If you were seeing your own service on the Web for the first time, would you hire yourself?'"
Hamid concurs with Schlossberg's assessment of time management. "When you set a time limit for your goals, assume it will take three times as long to get there and have the resources necessary to sustain you," he said.
Finally, Hamid recommend that entrepreneurs enjoy what they do but look after their health "regardless of [their] work commitments."
Be Compliant from Day One
Dan Greenshields, President and Chief Investment Officer of ShareBuilder Advisors LLC, told StreetID that one of the key challenges in building a financial services firm is that you "have to be compliant from your very first customer."
"You have to build all this infrastructure up front before you even have a product," he said. "If you're doing a software company or doing something on Facebook like Zynga or whatever, those guys don't have to worry about it. We're a regulated entity, like a bank or brokerage. The regulators demand that as soon as we have one customer, we must be fully compliant."
Make Friends with Ramen Noodles
According to Derek Frey, the founder and Chief Market Strategist at Carnac Investment Advisors, LLC, "Ramen noodles and couch surfing are your friends" when attempting to launch a financial startup.
"Never quit or give up, and don't try to reinvent the wheel," he advised. "In almost every case there is someone out there who has already achieved something close to what you are after. Find them and find a way to get them to mentor you, if possible, or at least learn everything you can from them and their experiences."
Frey also recommended that entrepreneurs keep their conscience free of jealousy. "Rather than being jealous of those doing well during these times, it is better to learn from and even perhaps emulate what they are doing," he said.
Want to Move at Your Own Pace? Use Your Own Money
Some entrepreneurs prefer to move at their own pace. But in order to do so, you have to be prepared to invest your own money in the business.
"People have different approaches," Stan Bokov, COO of TradingView, told StreetID. "Some go to incubators. Some attract early seed stage finance. I would recommend, with your own capital, you can move at your own pace, and you for sure know if your idea is proven or not -- if it works, if it takes off."
Bokov said that a lot of people get an idea and assume it's going to work.
"And then you get a lot of money and it doesn't go anywhere," he said. "It doesn't work. Maybe you don't spend as much time thinking it through and all the fine details as you do when your own money is on the line. That certainly has some pluses to it, because you really have to know, 'What am I spending these dollars for? What am I getting for it? Is it really going to work?' You think it over 10 times more."
Do it For the Right Reasons
Last but not least, Dan Passarelli, the founder and CEO of Market Taker Mentoring, told StreetID that the number-one piece of advice he can give to entrepreneurs is to start a firm for the right reasons. "You have to believe in it," he said. "You have to love what you're doing and the service you're providing. There are too many bad apples who get into this business for the wrong reasons, and they eventually fail."
Jesse Marrus is the Founder and CEO of StreetID, a financial career matchmaking, news and networking site.
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