The conventional wisdom holds that most successful entrepreneurs are those who are born with the innate ability to innovate, inspire, and self-motivate. Most people also assume that the greatest entrepreneurs tend to come from family backgrounds rich with business experience. That conjures up the image of an entrepreneurial class that was all but born for the role. The truth, though, isn't so simple.
In reality, there have been surveys of entrepreneurs that seem to indicate that they come from all walks of life—and that they bring various levels of skill to the table. One such survey found that 52% of entrepreneurs didn't have an immediate family member who'd ever started a business. Some of the most successful entrepreneurs in history, including Bill Gates and Jeff Bezos, fit into that category. Despite having no formal training and no family background in business, they did just fine.
That begs the question: where did they learn the skills they needed to succeed? After all, educational institutions around the world are just now starting to grapple with the task of preparing young entrepreneurs to start their first businesses. And as any veteran entrepreneur can tell you, simple common sense will only get you so far.
The answer, for most of them, is that they learned what to do on-the-fly by simply doing it. But it doesn't have to be that way. Today's budding entrepreneurs can draw some very valuable lessons from those who have come before them. To help them get started on that wonderful journey, here are four lessons all entrepreneurs must learn on the way to success, and some advice on what to do with that knowledge:
1. An entrepreneur's time is money
If there's one experience that's common to almost all new entrepreneurs, it's that in the early days of their first venture, they feel it necessary to be everywhere. In a one-person operation, that makes sense. But it's almost always the right decision to ditch those tendencies as soon as possible. That's because how every moment of an entrepreneur's day is spent holds a direct correlation to how successful the business will be. It's critical to leave work that others can handle to them and to focus on efforts that will grow the business.
A great way to start doing that is to plan each day with a schedule and make every effort to keep to it. The specifics of each entrepreneur's schedule will vary depending on the business they're in, but some general guidelines always apply. They are:
Create a stable morning routine – to maintain a daily schedule, it's necessary to have a predictable start to each day. Get up as early as is comfortable, have breakfast, exercise, and get going. That will help to make sure each new day gets off to a solid start.
Complete high-value work early – Because an entrepreneur's time is valuable, it's important to front-load each day's schedule with the most important work of that day. First, it will help make sure the work gets done on time. Second, if the schedule goes awry as the day progresses, the agenda items that get skipped won't be mission-critical.
Build buffer time between appointments – In a perfect world, an entrepreneur would be able to spend every moment of the day zipping from priority to priority—no downtime. In reality, that seldom happens. It's important to leave some padding between each appointment, in recognition that there'll be overruns here and there. Also, when time permits, it will allow for some sanity breaks, which are essential to avoid falling victim to entrepreneur burnout.
Reserve time at the end of the day for reflection – It's easier than you think for an entrepreneur to get so wrapped up in their daily goings-on that they lose sight of the bigger picture. To avoid that, it's important to leave time each day to digest the day's events and think about how they've affected the business. That way, making slight course corrections from day to day can prevent small issues from becoming big ones.
2. The customer is king but isn't infallible
In the early days of any business, it's easy to see each new customer as the lifeline keeping the business afloat. For that reason, it's only natural for an entrepreneur to bend over backward to make early-stage customers as happy as possible. On the whole, that's a good impulse. That doesn't mean, however, that there shouldn't be limits.
The reality is that every business will have customers who make unreasonable requests. The issue is that granting those requests can come to haunt a start-up because it sets a precedent that's difficult to undo later. If deviating from business norms becomes standard operating procedure—it won't be long until the customers start costing more money in time and effort than they're worth.
To avoid that situation, it's important to set clear boundaries with each customer early on to define the relationship. If the company's products and services have real value, the customer will understand those boundaries and stick with you. If they don't understand—it's a better idea to let them be someone else's headache. It's better to do that early and avoid an (unfairly) unhappy customer destroying your business's image with ceaseless complaints.
3. Ask for guidance early and often
For any new entrepreneur, the biggest hurdle is often their own pride. Many first-time founders start their ventures convinced that their vision will see them through to success. That creates a powerful disincentive to reach out for help when it's necessary or to seek other entrepreneurs who've already dealt with common early-stage business problems. Failing to do so can doom any new business.
Put simply, new entrepreneurs have to recognize right away that there's going to be plenty about building a thriving business that they don't know. Trusting your gut feeling can sometimes help, but business intelligence exists for a reason, so use it. It's not a sign of weakness to ask someone more experienced for help—it's a sign of wisdom. That's why it's a good idea for every first-time business owner to find themselves a mentor or coach who has deep and relevant experience running a similar operation. The huge number of early pitfalls an experienced entrepreneur can help a new start-up avoid can mean the difference between success or failure, and with an estimated 90% of start-ups ending in failure, anything that improves the odds is worth doing.
4. Protect your cash flow—or else
It should go without saying, but no business can operate without enough money to keep the doors open. Still, an astounding number of businesses fail due to cash flow problems—82% of them, to be specific. Most of that is due to the fact that the majority of first-time entrepreneurs don't have a firm grasp on the basics of business accounting, which is far more complex than managing their personal finances.
Stabilizing a new business's cash flow should be top priority for every entrepreneur. Getting that right will form a foundation for growth and success. The effort starts with a solid plan (with contingencies) to finance the business as it gets up and running. Then, it's necessary to do the often difficult work of aligning the business's credit terms and accounts receivable procedures with its ongoing expenses. Where that's not possible, alternate means of securing cash flow must be considered.
The work doesn't stop there. The next thing an entrepreneur has to do is either learn how to create an accurate cash flow forecast or find someone else to do the job instead. Having a cash flow forecast that's in line with real-world results helps assure that the business won't have any sudden bottom-line surprises that can threaten its existence. It's a task that any entrepreneur with a reasonable amount of mathematics skill can master—but it's so important to a business's survival that it absolutely cannot be overlooked.
Don't learn the hard way
Even though every entrepreneur has to start somewhere, it doesn't mean that they have to begin their journey by flying blind. As these lessons should make clear, there's quite a bit to know, but not every lesson is difficult to learn. They only become difficult when you learn them the hard way—when they're already affecting a new business's prospects for success.
So, the most important lesson of all that any new entrepreneur should take to heart is this: take the time to do all of the legwork and research you can before jumping into your first business with both feet. Plenty of people have already walked the path you're about to embark on, and there's no shortage of resources and people available to help you. You've already got the drive to succeed, so back it up with the knowledge you can draw from others, and there's no telling how far you'll go.
Small Biz Buzz hosts @cnheuft and Derek Harju are joined by @tanyamoushi of Moushi & Co. to talk about solopreneurship executive coaching. Check out our latest episode of #SmallBizBuzz. https://t.co/8PqDS9BKIZ pic.twitter.com/n4IfVodmC8— Keap (@KeapGrowing) March 21, 2020