Entrepreneurs, by definition, are problem solvers. They see a need or a better way of doing things, and then they craft a clever way to make it happen.
So why don’t all entrepreneurs succeed? Accordingly to a Small Business Development Center study released this February, 25 percent of all new businesses fail in the first 12 months. Almost half–44 percent– are gone by year three.
How do you make sure your business is in the 56 percent that is still around in year four? Here are my nine principles for start-up success. These tips ensure you get off to a good start…and they lay the seeds for guaranteed growth in year four and beyond.
- Don’t start a company unless you are radically passionate about it. It’s exciting starting a business. But the middle is hard. The unk-unks (unknown unknowns) can sap your strength and run down your resolve. If you are radically passionate about your vision and purpose, you will have enough excitement to use when things get difficult.
- Hire people you will love working with. Then, as you grow, hire people your people will love working with. You will be spending more time with these peeps than you will with family and friends as you build an enterprise from the ground up. This is so much easier if you like them!
- Hire people who are passionate AND intelligent. New ventures rarely work if the players have just one or the other. You must hire for both.
- Pay these people well…because your success depends on them! Be generous with compensation. You will alienate and lose your best and brightest if you are greedy.
- Full transparency is a must. No closed doors. No secret files. Share all news both good and bad. Transparency makes everyone feel like they are part of an organization with integrity. This makes them work harder for you. And when problems arise, you never know who might come up with an elegant solution.
- Keep the company structure flat. Not only in the beginning. Forever. Hierarchies eat away at creativity and innovation. Eat lunch in the cafeteria with everyone else. Have an actual “open” door in which anyone can walk by and feel they can ask “do you have a minute” and invite them to sit without looking at your watch. Make everyone feel important by listening and taking action when appropriate.
- In the early days, obsess about only one thing: sales. Operational details are always important. You are creating processes that will form the bedrock of the company’s product. But don’t obsess about efficiency and process in the early years. The only goal post is sales. Sales can fix everything!
- Failure is key to your ultimate success. No one hits a home run every time. If you swing and miss more than half the time, you are still a wild success. Learning from what doesn’t work helps you tweak to find what does work.
- Never stop innovating. Don’t stop recalculating, readjusting and improving. Ever. The world is constantly changing. Baby Boomers went to college with electric typewriters. Millennials went to college with Wi-Fi tablets and laptops. The wind is always blowing. The art of success is aligning your sales with the direction of the prevailing wind.
Now, you may have noticed that the majority of these principles have to do with the team you put together, and there’s a reason for that. Your team is the number one driving force behind your success. I can say with complete certainty that if it weren’t for my own amazing team of mentors, partners, and employees, my business wouldn’t be where it is today – and I am incredibly grateful for their contributions, because they make it possible for me to do what I love, day in and day out. So be sure to follow this roadmap – and your new company should also be able to not only survive, but thrive. Good luck!