School Is Not Necessarily Education
Develop a passion for learning. If you do, you will never cease to grow. —Anthony J. D’Angelo, entrepreneur, education trailblazer
The passionate debate persists about whether college and advanced degrees are worth it for entrepreneurs. However, everyone can agree that although you may not be in school, your education should never stop. Entrepreneurs who excel educate themselves constantly about new technology, business strategies, and so on, and you don’t necessarily have to be in school to do that
You’re in No Rush to Get an MBA
What would that degree do for you? You’d ultimately go back to running your business. You’d lose time and money. You don’t need Harvard; Harvard needs you!
Spend the Majority of Your Time with People Smarter Than You
As iron sharpens iron, so one man sharpens another. — Proverbs 27:17
The average person is intimidated by smart people. We’d all like to think that we are the smartest person in the room even if we know it’s not true.
If given a choice to spend a week quarantined with really smart people or people of average intelligence, the average Jane would choose people of average intelligence. Who can blame her? But what a tragedy! It’s as if Jane’s fear, ego, or yearning to fit in prevents her from growing and learning. Overcoming this feeling of insecurity is the first step to ascending to greatness.
Office Space Is Not a Priority, But a Good Team Is
I think, team first. It allows me to succeed, it allows my team to succeed. — LeBron James, NBA champion
Acquiring office space should always be justified by how it will improve your business and raise your profits. Office space is a luxury, not a necessity. You adequately weigh the pros and cons. Most entrepreneurs, especially new ones, find more cons than pros. Save the money you would invest in office space to finance things that get you a solid return
What You Wear Isn’t What You’re Worth
Without going beyond the extremes of ridiculousness, wear what is comfortable to you to perform your best. Respectable and comfortable are not mutually exclusive. If a person cannot see past the irrelevancy of your clothing to assess the relevancy of your idea, perhaps you should move on. Cultural norms are changing for the better such that ideas are more important than if you’re wearing Izod
You Don’t Always Have to Be the Smartest One in the Room
You never really learn much from hearing yourself speak. —George Clooney, actor, director
The most successful CEOs are the most humble. They know that they don’t have all the answers; they know that they need help. If you are one of those entrepreneurs full of bravado who knows everything and is unwilling to listen to and to hire others, especially those smarter than you, you’ll only get so far. The best entrepreneurs don’t always have to be the smartest one in the room. They know better.
Talent Trumps Seniority
It’s not so much a secret anymore, but an expectation: Start-up tech companies prefer to hire people under thirty years old to avoid dealing with outdated and ineffectual norms that give preference to older people. For example, when Facebook started, it intentionally avoided hiring people in their late twenties and early thirties. Not until the company began to mature and needed to bring in experienced executives did it relax this practice.
You Are Odd, and It’s OK
Eventually, the nerds and the geeks will have their day. —Judd Apatow, film producer, comedy writer
When it comes to being a successful entrepreneur, it pays to be odd. And besides, when you become wealthy and successful, people tend to forget how odd you might really be. Regardless, everyone wants to be your friend
People Don’t Only Work for Money
Do not hire a man who does your work for money, but him who does it for love of it. — Henry David Thoreau, author, philosopher
Before determining what you will pay people for their services, stop and think about what you can offer them instead of monetary compensation. Chances are you have something that they want, and you can use that as leverage
You Have a Sidekick
Two heads are better than one. —John Heywood, English playwright
The idea of one person running a race against four others seems a bit ridiculous, but so many entrepreneurs do exactly that. For whatever reason—pride, fear, or greed—they think they can win by themselves. Avoid this trap. If you don’t have a team member or a cofounder, search for one. It may take some time and effort to find the right people, but once you do, you increase your chances for success greatly.
Don’t Let People Abuse Your Flexibility
It’s easier said than done, but forcing people to respect your time and flexibility is only fair. Otherwise, you will always be on call. People who aren’t entrepreneurs must learn that entrepreneurs are flexible because they work hard for that privilege. When that privilege is abused or at least not respected, frustration and angst ensue.
Don’t Manage People, Manage Expectations
High expectations are the key to everything. —Sam Walton, founder, Walmart
Make sure that you don’t try to manage people, because it’s impossible. If you try to do that, you’ll drive yourself crazy. Instead, define and manage expectations of individuals who work with you or for you. Clearly setting expectations in the beginning of the relationship and holding people to them avoids confusion and misunderstanding later. If you do this, you are on your way to becoming a much better manager.
Get the Right Mentor
No entrepreneur has succeeded without some type of mentor figure. Mentors are invaluable. Make sure that the one you choose has achieved what you want and that you consult that mentor frequently. If your mentor is not accomplished enough or is inaccessible, find someone else who can really help you move closer to achieving your goals
Choose Your Spouse Wisely
The most important career choice you’ll make is who you marry. —Sheryl Sandberg, COO, Facebook
Choose a mate who understands that your drive to succeed at times trumps satisfying their sex drive—among other things. Distractions in the form of bad or draining relationships have wrecked so many businesses. In fact, many venture capitalists devalue a company’s worth based on the increased risk that married cofounders present. When choosing a mate, make sure that person is an asset, not a liability.
Fire Unproductive People
Hire slow, fire fast. —Unknown
One of the biggest misconceptions about forming a team or hiring employees is that once you find great people, your personnel problems are solved and that everyone will constitute a tight and effective unit for years to come. Business rarely works out that way, especially for young companies. For reasons ranging from poor performance to recruitment by other companies, you can expect to lose people. Because attrition is inevitable, entrepreneurs and leaders of small companies must be committed to always looking for good talent.
You Don’t Need Money to Make Money
Don’t believe the hype about needing money to start a business. It’s deceiving, and if you believe it, you could be ruining or delaying the success of your own endeavor. People who repeat such generalizations are sometimes simply trying to sound wise and learned, or they are trying to justify why they are broke.
Having no money doesn’t mean you have no resources. You’ve got something, so get started on your new business—and without spending any money if you can.
Pay Taxes Quarterly
Make sure that you pay estimated taxes quarterly to avoid being chopped by the tax ax.
A Check in Hand Means Nothing
When you receive a new purchase order, a check, a verbal agreement, or a written agreement from a customer wanting to buy your product or service, don’t get too happy and excited. Save the celebration until you have cold cash in hand or the funds are verified.
Avoid Negative Cash Flow
Negative cash flow is not a bad thing per se. In fact, it is necessary for many businesses in numerous industries, particularly if the business is in the start-up phase. However, maintaining a negative cash flow position for too long is detrimental to any business. Your goal as leader should be to find out what the norms are for your industry and what is healthy. A financial adviser can also help you understand your options so that you can avoid this financial stumbling block.
Borrow Money from a Bank before You Need It
Entrepreneurs must be mindful that recessions and economic downturns are inevitable. If you are in business long enough, you will experience one. Preparing your company to weather these storms is part of your job. One of the best ways to do this is to secure your company’ s financial welfare by applying for and receiving credit when you don’ t need it.
Prepayment Is King; Disregard Standard Payment Terms
The nature of business is that buyers want to pay as late as possible, and sellers want to be paid as early as possible. Your goal as an entrepreneur is to maintain good cash flow, and the best way to do that is to receive your money as soon as possible. You must be confident and direct about when you expect to be paid. Yes, it can be awkward and uncomfortable at times, but it sure beats not being paid at all or having to go to court.
Hiring a Professional Accountant Is Money Well Spent
As an entrepreneur, you have to decide what services to pay for, and accounting is one of them. Although accounting services may seem expensive, especially if you are just starting out, you will save money in the end. From the very beginning, finding a good accountant is a high priority. Don’t think of doing business without one.
Manage Debt Well
The best entrepreneurs manage their personal debt well. Also, they find the best money mentors or financial gurus to help put them in a position of maximum financial leverage. Undercapitalization continues to be the main reason so many businesses fail. Considering this, you want to ensure that you do everything you can to maximize your chances of success. Yes, it’s important to have a good idea and eventually a profitable business, but following the right financial path to get there is critical, too.
There’s a Downside to Having Investors
In many cases, more money and resources translate into more problems. If the business plan and model are not sound, throwing more money at it will yield poor results. To illustrate, it can be like giving more money to a shopaholic. The ideal situation for having investors is when your company is experiencing certified, tremendous growth, a spurt that is outpacing your current resources.
Understanding the downside to having investors in your business will better prepare you for the experience, if you choose to go that route. A capital infusion by an investor can be a huge accomplishment and really propel your business to the stratosphere of success, but remember that it can also be pure hell.
Focus on Building Revenue
Entrepreneurs who ignore the revenue question only hurt themselves by overlooking the obvious. The best entrepreneurs ask the revenue question every day and focus on building value through sales. Everything else is less important.
The Biggest Investment in Your Company Is Yours
If you are seeking investment capital from an angel or a relative, be sure to quantify in clear terms the investment you’ve made in the company. Investors want to see that important information, which can increase your probability of getting funded. If you are raising money in an unconventional way, you may have to quantify your input in an unconventional way. For instance, log the hours you’ve worked on your business and price your labor based on current market conditions. Or add up all the expenses you’ve had to pay to get the business to where it is. Do whatever it takes to validate your dedication to the business. A business whose founders are well-vested is a business that’s worthier of investment.
Use Different Banks to Minimize Risk
Always open your business bank account or business credit card with a bank that is not affiliated with the bank where you conduct important (especially personal) finances. By doing this, you minimize your risk of the bank doing something to jeopardize your financial welfare. Furthermore, read your terms for accounts and loans as if your life depended on it, and ask questions if you don’t understand. You must have a strategy when opening bank accounts and applying for credit cards for your business, because they have a major effect on your financial future. If you don’t take this crucial step, you are headed for disaster.
Know Your PAYDEX Score
Read everything on the D&B website, because it is an essential step toward effectively managing your business credit, which helps to drive down costs and improve cash flow—not to mention it could be the determining factor that helps you close a big deal to become a supplier for a major company.
You’re in Sales, Whether You Want to Be or Not
Companies that focus on sales and customer needs from the very beginning are more likely to be big winners. For instance, without Steve Jobs’s talents in marketing and sales, Apple wouldn’t have grown to be a public company with record sales. Steve Wozniak, who certainly was the technical brain behind the Apple I personal computer, wanted to give away his inventions. Jobs, on the other hand, was adamant about selling the Apple I and other products at a premium price. The rest is history. Similarly, Mark Zuckerberg had Eduardo Saverin, who began selling advertising for Facebook in April 2004. These ads included moving companies, T-shirt retailers, and other companies that sold college-related products and services.
Your Customer Is Your Boss
Just because you are an entrepreneur doesn’t mean that you can’t get fired. In fact, entrepreneurs get fired every day by dissatisfied customers. Ensure that you listen closely to your customers and respond to their changing needs in a quick fashion. If you introduce something new, be sure that you are prepared for the possibility that your suggestion could backfire.
You Have Sales before You Have a Business
Forget about the business outlook. Be on the outlook for business. —Paul J. Meyer, author, businessman
Having sales before having a business was proof that I had a promising venture. In fact, considering all the businesses I have started—and there have been many—the most successful ones were those that had sales or significant demand before I even incorporated. There is no better way to start a business than with purchase orders. I had no idea what I was doing, but it was the best situation possible.
You Aren’t Always the Best Person to Close a Deal
The best entrepreneurs know that being a CEO doesn’t make you the best person to present to investors, to close a sale, or to do a number of other tasks. Perhaps you don’t speak with passion or you have trouble communicating. In this case, you must be willing and able to adjust to different situations to maximize your opportunities. As it relates to understanding your talents and gifts, Morehouse College alumnus Dr. Martin Luther King Jr. put it best in one of his sermons: “A Ford car trying to be a Cadillac is absurd, but if a Ford will accept itself as a Ford, it can do many things that a Cadillac could never do: it can get in parking spaces that a Cadillac can never get in.” King finalizes his thought, saying, “The principle of self-acceptance is a basic principle in life.” I concur, and entrepreneurs who understand this principle in business are exponentially more successful.
Networking Isn’t All about You
Most people starting a business are especially excited about networking. The idea seems like the smart thing to do in order to grow a business. However, after a while, many discover that the main result is a stack of useless business cards. Some people end up like me, disillusioned by networking.
I am not encouraging you to avoid networking events entirely, but if you choose to attend them, get the most out of your experience by assuming an attitude of service. Ultimately, it will come back to you multiple times.
Don’t Waste Time on People Who Can’t Say Yes
Tread lightly and treat everyone involved in the process with the utmost respect, from the secretary to the CEO. You want those who aren’t necessarily decision-makers but influencers to also buy in to what you propose. Insiders, those who work for the company you hope to bring on as a client, have influence on decision-makers. Sometimes these individuals yield more influence than you think. Your goal should be to draft them onto your team so that they can sell your idea from the inside.
There’s No Such Thing as a Cold Call
A winning effort begins with preparation. —Joe Gibbs, former NFL coach, race team owner
The biggest benefit of doing your homework is instantly establishing trust and credibility with your prospect, which goes a long way. As angel investor Reese suggested in his advice, an entrepreneur who approaches him and knows his background instantly earns his respect and ear. Likewise, your cold calls can warm up quickly when you’ve researched your prospects thoroughly. They will appreciate your efforts to understand their position.