Editor’s Note: This is the second in a series of posts we’re doing (you can find the first one here) called The Business of Starting (TBOS). In each post we’ll get advice from an industry expert on things you need to consider when planning on developing a business out of your startup.
This edition is a guest post by Patrick Driessen. Patrick is a visionary, passionate, hyper-active, dyslexic and intuitive entrepreneur, business leader, angel investor, mentor, author and agent of change with a passion to help other people succeed! You can read more about Patrick at the bottom of this post.
“Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma – which is living with the results of other people’s thinking. Don’t let the noise of other’s opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary!” – Steve Jobs
Having started, run and lead various companies as an entrepreneur since I was 15 years old, I have learned many things about being an entrepreneur; often the hard way…. Some of my own business ventures were very successful, some unsuccessful, and one even resulted in my personal bankruptcy (at the age of 21), however all of them made me very rich and happy! They made me rich and happy in enriched knowledge and experience; my failures and success allowed me to learn more, build new valuable relationships, get new ideas, get more insights & inspiration and apply my lessons learned to become more successful!
A lot has been said, written and published about the key qualities of successful entrepreneurs: e.g. passion, creativity, leadership, vision, self-confidence, relationship building, innovation, organization skills, communication and coordination skills. Based on my own experience I would like to share and highlight some other key qualities and insights that will help an entrepreneur to succeed. Just ask yourself the following questions…
1. What is your personal mission statement in life?
As Stephen Covey wrote in his popular book “The Seven Habits of Highly Effective People”, the second habit he talks about is “Begin with the End In Mind”. He recommends formulating a “personal vision statement” to document one’s perception of one’s own vision in life.
What do you want to accomplish in your life? One effective way to write your personal mission statement is to visualize the day when you die. What do you want your loved ones and friends to say and remember about you? Another approach is to write your own obituary.
Without a clear personal mission statement, you will quickly lose focus and direction in your business. Without a personal mission statement, you won’t be able to find a passion or desire for success.
As one of my fellow coaches and friend Denis Gianoutsos likes to state: “There are two important days in your life: the day you were born and the day you knew why!” So what do you want your life to be about? What’s your mission and what’s the big picture?
For more insights into your positive self-direction, please see: ‘This is Your Wake Up Call!’
2. Are you self-motivated?
Perhaps one of the most crucial qualities for people who are self-employed to succeed. Without self-motivation, you will always find yourself putting things off. You won’t be able to accomplish anything as there is no one there to motivate you or watch over your shoulder when you’re your own boss. So if you are not a self-motivated kind of person, working for yourself or being an entrepreneur is definitely a risky business for you. You can mitigate this risk: get a business partner, get a coach & mentor or ask a close friend to help and stimulate to motivate yourself!
If you think you are not self-motivated enough, make it part of your self-development plan: coach yourself to improve in self-motivation! Success guaranteed!
3. Are you persistent?
Understand that there is no “instant gratification” when you’re running your own business. You won’t get a pay check every month like you do in a 9 to 5 job. Initially, you may need to work very hard for little reward.
If you’re not persistent or don’t fully believe in yourself and in your business, you will find yourself giving up very quickly. Of course, it is possible to earn good money by running your own business, but you need to remember that it will take hard work, time and persistence to achieve true success and happiness!
Like Sir Winston Churchill said: “Never, Never, Never Ever Give Up!” So whenever you fail or make a mistake; take the lessons learned, get back on your feet to apply them and use your enriched experience to succeed faster and better!
4. Are you financially responsible?
A very important quality for all business owners. When you’re your own boss, you’re a CEO, accountant and finance manager. You’re fully responsible for managing and controlling your business budget. When you start making profits, you will need to know how to manage it wisely. Often times, you will want to put a portion of your profit back into your business to help it grow and expand further. Or you want to build up a solid cash position to finance a possible acquisition.
Successful entrepreneurs actively manage their P&L (Profit & Loss) balance sheet, and especially their cash position! They focus on two things to improve their financial performance:
A) Increasing their profits. This is only possible through either:
* Increasing revenue, or
* Cutting costs and cost avoidance.
B) Growing their business. This is only possible through the following 4 methods:
* Increasing acquisition of the right type of clients (through organic growth or M&A)
* Increasing margins
* Increasing the frequency of purchase of your clients
* Reducing the attrition of the right types of clients.
5. Are you hungry for success?
If you want to be an entrepreneur, you have to think and behave like one! You have to think and act as a leader, as a CEO and as a warrior! Understand that business is not the same as a hobby where you can take it lightly. If you treat your business like a hobby, you will never be able to achieve true success. A business needs to be worked at seriously and professionally, you can’t allow personal things to get into your business. Remember what the headline in Donald Trump’s Apprentice show says? “It’s Not Personal – It’s Just Business!”.
6. Do you have enough supportive friends & family?
Being an entrepreneur often means having to deal with tough personal, financial and emotional challenges. Often almost everyone around you will have doubts about your plans, your vision or your growth strategy. Will it stop you or de-motivate you?
A lot of people think that startups and being an entrepreneur suck, and they are always happy to explain to you why! Other people will tell you that you are ‘crazy’ to be an entrepreneur instead of working as employee for a well-established organisation, which offers you security, a compelling salary, bonuses, 20+ holidays, etc. Will it stop you or de-motivate you?
Often you will make mistakes, sometimes having a big impact on your business, your team, your financial position and… on your emotions! Will it stop you or de-motivate you?
Being an entrepreneur sometimes means being very lonely. It’s tough, it’s challenging and for many it’s the best thing ever…. But…not always! For all those very tough and lonely moments in which you could get depressed you will need a small group of close friends and family members who will help you get through these difficult moments. They will kick your ass when you will need it the most! Who are they? How can you get their full support and how do you make them part of your entrepreneurial journey, so you can rely on them when you really need to?
7. Can you create enough sources of funding?
Starting, building up and expanding your own business not only requires time, lots of energy, experience, knowledge, an exceptional team, strategic partners, many supporters and paying clients; it usually also requires lots of money!
In the startup phase you will need to bootstrap and fund yourself and your new venture with your savings, and possibly cash flow from your side job(s) or day job. Once you’re a fulltime entrepreneur (which is the best way to kick-start your venture), you will soon realise that you will need additional funding. Maxing out credit cards, taking a second mortgage or selling some of your assets are all viable options, but maybe you will need even more money to fund the growth of your business. The big question is: before and while starting your new business, have you created enough access options to funding sources in case you require more money?
Have you got access to trustworthy friends and/or family members who are willing to lend you money or take an equity stake in your business? Have you got access to angel investors and have you been actively building a relationship with them? Do you personally know the loans and/or branch manager at your bank? Do you know someone who can introduce you to an outstanding venture capitalist? Have you built up a valuable relationship with some of your clients and are they willing and able to help fund some of your growth without requiring an equity stake?
All practical options, which usually only will work successfully for you if you have planned for it, invested time and passion in it and took enough action on it.
8. Are you a people leader?
Building up a new venture is like a rat race; only the best, smartest and fastest will win! It’s also like an endurance race in which the best TEAM will win.
To build up your winning team, you will need to be able to select, hire, retain and utilise the best people. As leader of the gang, you will often be the linking pin between people who do not know each other, do not like each other, but will need to work together with each other as one unified, motivated and ambitious team.
Once your team starts growing you will need to unite, inspire, motivate and lead more and more people. First maybe 5, then 10, rapidly growing to 50 and then following that successful acquisition your team grows to over one hundred team members! Can you still lead this team without losing the personal touch and while maintaining valuable and personal relationships with many of your team members?
Even if you have never had direct reports before and even without ever having lead a team before, you can become a great leader! All it takes is leadership development: education, training, practice, coaching, mentoring, reading, changing your mindset, changing your behaviour and often changing your emotions…. Yes, becoming a true leader takes a lot! But to become a leading entrepreneur it’s a necessity!
For some useful leadership insights, please see: ‘The World’s Shortest Leadership Course’
9. What is your exit strategy?
As successful entrepreneur you will need to lead your business from start to finish. So where do you draw the finish line?
When and how do you want to exit your company? Do you want to sell it? If so, when and to whom? Do you want to list your company? If so, when and at which stock exchange(s)? Do you want to merge it? If so, with which company? Do you want to hand it over to one or all of your children? If so, when and to which one(s)?
For what price and under which conditions will you hand your baby over to someone else?
What’s behind the finish line? Imagine you have set your exit strategy and then… you’ve successfully executed your strategy: you’ve exited your company! Then what? What’s next? As part of your exit strategy I advise you to dream/imagine/decide what you want to do with the successful experience and reward(s) of growing and selling your own company. It will drive, inspire and motivate you to create your follow-up plan! Make it part of your bigger picture!
10. What is your company worth?
Are you good at maths? A successful entrepreneur knows the value of his/her company at any point in time! He/she also knows what kind of unique value he/she wants to create, which is often based on their exit strategy.
Why is this so important? Knowing what your company is worth versus your ideal exit strategy, timing and desired sales price, will determine if the time is right when you have an opportunity to sell/merge/list your company at any point in time. If you know that there still is huge growth potential to create more unique value, you might decide not to sell or you could include this value in your desired sales price. As long as you know what your baby is worth.
Knowing what the value of your company is also drives you to focus on creating and maximising value. This could be your brand value, goodwill, revenue, profit, client base, intellectual property, market share, market capitalisation, etc.
For each industry and market there are specific metrics and criteria which can be used for calculating the value of a company. I advise you to research and analyse these and then to use them to optimise the unique value of your own company.
11. Who is your coach and mentor?
Successful entrepreneurs, leaders and CXO’s often have one thing in common; they have a coach and mentor! A coach and mentor can help you to get the best out of yourself. A professional coach can help you with your self-development to deepen your learnings, increase your performance and enhance your quality of life. A senior and seasoned mentor can help you to succeed in your particular industry/market by sharing some of his/her lessons learned, experience and by leveraging his/her network.
A coach & mentor can be one and the same person. Preferably they are two persons: you find yourself the best certified coach and an experienced mentor. Your investment? Mainly time and brain power! Return on Investment? Huge!!!
You can find passionate coaches and mentors who will help you for free or for a reasonable hourly/monthly fee. See also: ‘Can You Afford NOT To Invest In A Coach And Mentor?’
I hope these insights and qualities will help and inspire you to succeed as entrepreneur faster and better! Of course there are many more qualities and insights which can lead to success as entrepreneur; find them, explore them and use them to succeed!
“To attract attractive people, you must be attractive. To attract powerful people, you must be powerful. To attract committed people, you must be committed. To attract innovative people, you must be innovative. Instead of going to work on them, you go to work on yourself. If you become, you can attract!” – Brian Tracy
About the author
Patrick Driessen is a visionary, passionate and intuitive business leader, entrepreneur, angel investor, author, executive coach, mentor and inspirational speaker with a passion to help other people succeed! His stories are most often thought-provoking, inspirational and motivational! He is the founder of various organisations focused on entrepreneurship, innovation and investment management. To help more tech ventures succeed faster and better, he has started Seed Accelerator; the 1st startup accelerator in Australasia.
For more information, please see: http://www.helpingyousucceed.org or http://www.seedaccelerator.com