To view my 10-minute video on the 8 Ingredients for Entrepreneurial Success, go to https://youtu.be/3h6_F6xxuts
80% to 90% of companies eventually fail. We’ve all seen the numbers from Gallup and the Small Business Administration. It may be year 1 or year 5, but the statistics are real.
I get asked from time to time “How did you launch 6 companies and have only 1 fail?” Some would say luck and good timing. I would agree that those played a part in my success. When I look back over the last 26 years, I’d say these 8 played the most in my (and our companies) our companies success. Regretfully, I learned some of these the hard way, but others I learned through my mentors, coaches and investors.
Here are the 8, in summary. (Watch my 10-minute video with more in-depth insights,
- Know your talents. You must know the difference between talents (which come naturally) and skills (which are learned). Your talents enable you to move thru life easily because it comes natural. If you aren’t sure what those are, ask your spouse, best friend or parents. If you need more insights, take the Buckingham Strengthsfinders Test.
- Get a mentor or coach. My first company took off. In the first months of our startup, I landed an $800K contract. Yes, it was great timing. The company grew, but if I had not made so many mistakes, it would have more than tripled. In all my remaining companies, but one, I had a mentor and coach. In the one company I did not, I failed and it cost me a lot of money. If you want to increase your opportunity for success, get a coach and/or mentor. (I recommend both.) The other key reason for a mentor/coach is that you always want someone to help you stay accountable in all your actions…no matter if it’s money, hiring, secretaries, dinners, travel, buying homes, etc. We all need guardrails in life. Last, be sure your mentor is a person of faith and high morals. You’ll need prayers daily and a moral standard above your competition.
- Know and manage your cashflow. Yes, we have all heard the phrase, “cash is king.” Cash in the bank (not in the mail or in an invoice) is imperative to exist. If you look at the #1 reason most companies fail, it is because they run out of cash. Protect your cash and make all spending decisions on your 30 thru 90-day cashflow projections. If you are a seasonal business, you will need to plan farther out. (Read Dave Ramsey’s business books to learn more.)
- Hire to your weakness. Like most successful marriages, one spouse is different than the other. In my case, we are opposites. You don’t need 2 pitchers or 2 quarterbacks, you need a pitcher and a catcher or quarterback and a receiver. Whether it is your first hire or 100th hire, always hire to the weakness of the team. You’ll be strengthened tremendously.
- Trust your team. If you hire right, you’ll manage less and have great people to make informed decisions. Yes, you’ll need to coach them in the process, but once equipped, you need to step back and let them make decisions. If you do, you’ll find more time to do your part more, and the company will benefit.
- Communication matters. You need to effectively communicate with your key team members and equip them to effectively communicate with their teams. When communication occurs, trust increases because transparency increases. When trust increases, companies grow.
- Customer service builds recurring revenue. You’ve worked hard to get the deal, now you want to move to the next opportunity? Delivering great customer service after the sale enables you to retain a client (recurring revenue) and with quality service comes referrals (building on your revenue stream). Watch the video to get insights from Chick-fil-A on this one.
- Stay entrepreneurial. Once many companies get a solid financial foundation, they take less risks. What happens then? They become stagnant because they fail to do what go them there…innovate and take risks. As an entrepreneur, you must continue to make tomorrow better than today, and with this comes the need to constantly create and re-invent. Things are changing faster today than ever before. You can’t afford to just sit back. Wake up each morning, thinking of how you and your team can improve your company, better deliver your clients and impact your community.
For more how-to information on improving yourself, your team and your organizatioin, go to rootloud.com
Mitch Smith, Founder & CEO of Rootloud