What does it take to be an entrepreneur?

Precision Networks LogoAfter starting and running Precision Networks for the last few years, I often find myself reflecting on what it takes to be an entrepreneur (successful or otherwise). And how my experiences over the last 8 years have changed my outlook, compared to when I first started out. Here are my ramblings for what they’re worth….

What is an entrepreneur?

In my opinion, entrepreneurs come across as 3 types:

The Rookie: Someone who is usually working for some one else and has some or other start up “grand plan” or idea or has recently started up a new company and is going through the “honeymoon” start up phase.

The Success Story: Where all Entrepreneurs hope to be one day with a successful and financially viable company. Not many get there and lots of young companies fall by the way side, long before they can call their company successful.

The Trench Warrior: Where the majority of entrepreneurs (including myself) find themselves on a day to day basis, as they strive to grow and build a successful company.

Requirements to becoming a successful entrepreneur.
Aside from all the important things such as correct marketing, cash flow management, having viable products and services, networking etc. and the tons of other information that exists out there, for me the following requirements are just as important for moving a start up to a hopefully one-day, successful company:

1. You have to be “desperate” to succeed. We all have some form of plan B available should our start up company not work out, but if plan B is too attractive compared to plan A, then in my opinion it minimizes the chances of success. For example if one had a potential cushy, well paying job option available should your start up company not work out, then I think the odds are that it won’t. You must be so desperate for plan A to succeed, that plan B is just not a real possibility for you.

2. Don’t expect everything you do to be successful or bring instant rewards. If you are a person that expects instant success or reward from every effort, you will become very frustrated quickly. Often one does lots of work for little or no return. For example preparing for tenders can be very time consuming and require lots of effort with only a small chance of success. However you have to give the application 100% effort and believe that you will succeed and move on swiftly if you don’t succeed.

3. There is no room for big egos. Irrespective of how much work/business experience or professional qualifications one may have, in a start up company, one will often find oneself doing menial tasks that are well below your experience and qualification levels. But if they need to be done for the eventual success of the company, then you just get on and do them. A big ego or refusing to do crucial menial tasks is a sure recipe for failure. Basically you must be prepared to do whatever it takes for the company’s success (legally of course)

4. Get a company domain with linked email addresses. There is nothing more unprofessional than receiving emails from companies that use free email accounts such as gmail, yahoo etc. It comes across as unprofessional and says a lot about your company in a negative way. Also ensure you have an effective and professional looking web site. Perception is very important in business – sometimes more so than reality.

5. Choose your battles carefully. At the beginning of a company start up, one is desperate for customers, in fact any customers. But as time goes by and the company grows you realize that some customers take up more time than they’re worth. I.e. one spends a lot of time and effort supporting them for very little return. Rather once you have the luxury of choice, it is better to focus more on customers that are vital for the success of the company. And you must be prepared to do anything for them irrespective of how small or menial (legally of course). And spend less time and effort on the hard work, less viable ones. Remember the 80:20 rule, 80% of business usually comes from 20% of your customer base.

6. Build customer relationships and communicate. Many companies have poor communication skills with customers. It is important to be very responsive and build a good relationship and understanding with customers as they prefer dealing with companies they know and understand well. For example always return calls and emails and do what you promise and when you promise. And if you can’t deliver on time, then let the customer know why not and offer an alternative way forward.

7. There is a very fine line between success and failure. The difference between a successful or unsuccessful deal, can come down to very little. It’s often just that extra effort on your side that tips the scales for success. So never give up and always look for opportunities to make a deal successful, even when it may seem unlikely to others.

8. Create a virtual organization. In the early years of a new company, one usually cannot pay for lots of staff, so it’s important to develop strong and effective relationships with supplier companies and partners, who can assist you in achieving your company’s goals. For example I consider the people I work with at my suppliers as part of my company, even though they don’t work for me technically. But their input and efforts are often just as vital to the success of many of my ventures. These relationships also allow you to deliver on greater jobs/projects, than you can succeed as a small company with few staff.

9. Don’t expect success overnight. Unless you are really lucky, achieving success for a new company takes time, lots of time. It’s a marathon not a sprint and requires lots of perseverance and a “thick” skin. If you’re a person that takes “no” and failures hard, then you need to get over this in order to make your company successful. Running a company is never easy.

10. Strong brand and low expenses are important. The more one has to invest in a new company, the more likely it will not succeed (plenty of ad hoc evidence). It’s far more important to build a strong brand while keeping expenses and investments to an absolute minimum. You need to run a tight ship.

11. Make the boring sexy. Many start ups often try to bring a new and previously unknown products /services to market. While it is possible to succeed with something absolutely new, I think it’s often easier for a start up to work in an existing market where you know a customer base and demand for a certain products/services exists already. Ok so there is also a lot more competition. But that’s where you need to create the “sexy from the boring”, so that your organization stands out. For example what Starbucks did for plain old coffee or Seth Godin refers to as Purple Cows in his books on marketing. You can always branch out to the more adventurous products/services once you have an up and running viable company.

12. Be flexible and adaptable. One advantage that smaller companies have over larger organizations is that they have the flexibility and ability to respond to changing market conditions and customer needs much quicker than larger companies. Larger companies are often tied down by procedures and protocols and cannot respond quickly to a situation that requires adjustment quickly

13. You need to be committed to the business. If you work on it part-time or “halfheartedly” then chances are it will never really take off.

14. Your role within the organisation will change over time as the company grows. In the beginning you will be forced to do many or most of the tasks and a significant amount of time will be spent marketing the business with little or no income being generated. But as the company grows, your role will change and you may find yourself more involved with the operational delivery of the products and services and less involved with the roles you fulfilled when the company started. But as you get more people on board you need to delegate the operational responsibilities and refocus your energies on building the business rather than working in the business. This can be trickier to do than it sounds but trying to maintain a balance is crucial.

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