You have heard it before, right?
The devil is in the details
Starting a company requires above average guts, energy and enthusiasm. Once you have taken your baby from idea to reality it’s time to relax, right? Wrong.
Most entrepreneurs (8 out of 10) fail within the first 18 months according to Bloomberg, because they lack the needed ingredients for creating a successful and sustainable company. How do you rate yourself on these areas?
- Stamina to stay for the long run.
- Moving from selling the big picture to managing the daily details.
- Willingness to pivot when circumstances and results point you in a new direction.
- Managing cash flow, not just revenue.
- Creating early feedback and conversation with customers to stay on top of market needs.
It infers not just a sprint but a marathon, and starting a company is definitely the latter. This is not just about putting in more hours for more months, it is also about hiring the right team so you are not doing everything and burning yourself out. Stamina happens when you put your efforts in the right places, the ones that matter most. I focus on improving your ability to tell the difference and give you tools to prioritize your time in my Wealth Development Program–because it is a critical element of your success and happiness!
When you first set off to start a company you need to have a clear mission–your big picture–and communicate it to potential investors, customers, employees and advisors as you get off the ground. As your company moves from idea to operations many entrepreneurs fail at this next phase.
Moving from selling this big picture to managing the day-to-day company.
In fact, as an entrepreneur you may be a creative genius, and lack the desire or personality to move from creation to operation. If this is true for you, your success will depend on surrounding yourself with people who are good at taking your idea and keeping it humming. Making sure materials are where they need to be when they need to be there and that customers are served not just at the time of sale but all the way down the line are the types of details that will make sure your idea not only launches but grows and prospers. Know what the 5 critical elements are for your company’s success and put your energy into ensuring these areas are well covered.
This is the key to success in life, not just business. And as an entrepreneur, being flexible can be the strength that gets your company to the soaring success you desire. Few companies end up where they thought they were headed. Markets change, customers’ needs become more obvious as you actually attempt to sell to them, technology changes the playing field, and other companies continue to move. Being able to pivot will make the difference between a great idea that goes no where and an idea that becomes a multi-million dollar business.
Cash Flow is King
This is a common business saying, because too many businesses are profitable, yet fail. How, you ask, is that possible? If a company has bills due and the money from customers is committed but won’t be paid until creditors take action, that company may show great profit on paper but still have a big problem. That is why it is so important to know when your money is coming in and when it must go out. You need to negotiate favorable terms with suppliers and find ways to have customers paying you as early in the process as possible. This also means when you are estimating how much money you need to start your business, early cash flow/ working capital needs must be part of your total funding. Getting through the early months or years until a company is funding itself is often overlooked by entrepreneurs.
Conversations with Customers
Creating ongoing relationships and in-depth conversations with customers is the ultimate key to any company’s success. Too often entrepreneurs do their market research for their business plan or investor funding, only to then completely drop the conversation. Yet, since your customers are the life-blood of your company it is imperative you know who they are, what they want, what unmet needs they still have, and where they are headed. More profit is to be made on follow-up sales to existing customers (without the cost of finding the customer) than your intial sales. So take the time to really know your customers and how you can best meet their needs. This will also keep your company and its products offering differentiated value–something customers will pay for. Having a good product is only half the game. Having one that customers believe they need is the more important other half.
With attention on these areas you will have put yourself into the top 20% of entrepreneurs.