10 Tips for New Entrepreneurs – Sure Ways to Increase Your Chances of Success

Are you a new entrepreneur or thinking of taking the plunge?
Here are 10 sure-fire ways to increase the chances that your new venture is successful.

1. Make sure you are ready, and other key stakeholders in your life are too!

Owning and running your own business is neither easy nor boring. It surely is not for everyone. Each person’s situation is unique, but most of us need some kind of safety net, whether that be at home to handle overload duties with the family, or financially. Ensure that your income is either not vital to your monthly living, or is going to be covered through savings to the extent that your business doesn’t replace your pre-entrepreneurial income.
You must also make sure you are ready for the time investment which can be immense at times, and for the sacrifices that will surely have to be made. You may not be able to play on that pickup hockey team or sandlot baseball team on Saturday mornings any more — but you should try to maintain some balance as much as you can. Finally, ensure that you have the necessary skills, or have ready access to them through your network.

2. Have a clear vision and make sure it’s understood

Without a clear, written, well-articulated goal or goals for yourself and your business, how do you know what do when you get up each morning? Too many people today sit around waiting for their email to tell them to do something! Applying the military analogy of “Commander’s Intent”, it is much more effective to empower your team and your company and yourself with three things – purpose, resources, desired endstate – and let them deal with the myriad possibly interim difficulties and required changes to their own plans.

3. Have a business plan, and monitor/update it regularly

Getting into this kind of routine early in your entrepreneurial venture is important discipline for several reasons. It prepares you for the day when outside investors will demand it. It also helps you quickly test your assumptions regarding what kind of revenue and expenses you will have in your business. Regularly updating a business plan is vital if you are going to seriously use it. At least annually.

4. Work your network hard both before and after starting your business

People want to help. Studies have shown that at least 80% of the time people will help you, if you ask! Your personal network is one of your most valuable assets. Use it! One of the biggest mistakes I have made myself, and I have seen made over the years, is not asking for all the help you need. So figure out how your friends and acquaintances can assist your venture and ask for that referral, piece of information or introduction. And don’t forget to work into every networking opportunity an offer to help the other person in some way.

5. Never forget “If it doesn’t jingle, it doesn’t count!”

I first heard that from my finance professor, Jim Hatch. It basically means cash is more important than virtually everything else. Without cash your business sputters and eventually dies. All the sales in the world won’t help you if they are sitting in a poor quality receivable. And just try to buy a new car with EBITDA or Net Income!

6. No business is too small to do things right

I was once very impressed to see a restauranteur with one location who had an operations manual that would have impressed Ray Kroc. This was about 17 years ago and for the record that restaurant is still thriving. This man had read Michael Gerber’s The E-Myth and understood that by working “on” his business a little, he could make it so that almost anyone with the right attitude could work “in” it. No one person was or is vital to the operation on a daily basis, including the entrepreneur, once you get this formula right.

7. Put off hiring employees as long as you can, and then hire the best you can find

It takes some courage to consistently hire people who you feel are “better” than you are, but that’s what successful entrepreneurs do. Once you have decided you must take the plunge and hire that first (or next) employee, then be sure you know what you need and want in that position, and be ruthless about not settling for less. A wrong hiring decision is almost never the band-aid you want it to be, and can be expensive and time-draining to make right, not to mention the unfairness to the person that you put in the wrong position. Find the budget to get the person you need and then let them shine. You will make mistakes. When you do fix them swiftly and fairly.

8. Don’t involve the bank unless you absolutely have to (new since 2008)

friendly neighbourhood bankerThe bank is almost never really your friend. Wall Street Merchant bankers’ greed in the decade or two prior to 2008 created such a huge implosion of available capital, especially to small business, that there is still no end in sight in terms of real commercial lending to small business. What happens in reality is the bank loans the money to the owner, but takes no real risk in terms of the business. Not until your business is much larger and the threat of moving your business is enough to get personal guarantees removed. If you can, bootstrap your venture and don’t load it with debt unless you must.

9. Be prepared to admit mistakes and do it quickly

Thomas Watson, founder of IBM said something along the lines of:

Would you like me to give you a formula for… success? It’s quite simple, really. Double your rate of failure. You’re thinking of failure as the enemy of success. But it isn’t at all… you can be discouraged by failure / or you can learn from it. So go ahead and make mistakes. Make all you can. Because, remember that’s where you’ll find success. On the far side.

You can’t be afraid to make mistakes, and you have to be able to quickly recognize them and deal with them. Not every idea you try will be successful. But as Mr. Watson said, it’s on the other side of those failures that you will find the right formula.

10. Have Fun!

If you are not having fun doing what you are doing, what really is the point? If money and bragging rights are more important to you than getting satisfaction out of what you do and how you do it, then the grind of the entrepreneurial world may not be the right place for you. Perhaps a corporate job would be better. I have always found that the environments where there is a commitment to results coupled with a positive atmosphere are the high performance places to work.