6 Expert Tips for Entrepreneurial Success
And other tips for entrepreneurial success.
1. It is not about the money, but it is always about the money!
Make sure you understand financial statements, including the elements of the capital structure. Do not outsource this basic understanding to your accountant or CFO. You will be better able to identify trends, problems and issues in your business. Financial statements provide a view of the actual dynamics of your business and can be helpful in determining: how to price your product, how much you should spend on marketing, whether you are spending enough on research and development, and if you have enough cash to pay your employees and suppliers.
At some point you are likely to be raising money and you need to understand the implications to you and the company of the key financing terms. Finance is not complicated but it does have its own terminology and you want to be conversant in that language—because the people that you want to raise money from certainly are.
2. Failure = feedback
If someone turns you down for funding — which will happen 80% of the time—convert the conversation into a chance to get constructive feedback. When you get the feedback, don’t argue with them point by point in a defensive manner. Listen, and you will learn something for your next pitch. And, always ask if you can come back in 6 months with an update and after you’ve addressed their concerns. A “no” doesn’t mean “never” so you want potential funders to take a second meeting.
3. Build relationships
Start talking with potential funders when you don’t need the money and send them summary updates on milestones you’ve achieved. Venture Capitalists (VCs) like to get to know an entrepreneur before they invest and like to see milestones being reached. You will also get to know the VC during the process. You never just want money from a VC, you want their mind and contacts as well. It is a good idea to develop a relationship with the potential funder before you take their money.
4. Realize you aren’t good at everything
Figure out early on what you are not good at or not that interested in doing and make sure you have a senior person on your team that excels at that very thing. Even the most talented and brilliant people cannot do everything well. It’s important that the complementary person be senior enough to signal that a diversity of talents can be successful at your company. Your company and employees will benefit by having a mix of skills and talents.
5. Come out from under the rock
Build your professional network beyond your immediate job. Juggling the demands of work and family leaves little space for what can seem like non-core activities—such as becoming involved in a civic organization or taking time to meet with people in other industries. Most people have several careers during their life and a person that may not seem relevant to your current job could be the person that is the most important in your next position. Follow up and have breakfast or lunch with that person you met recently at dinner or a conference who has a job that is interesting but has nothing to do with yours. Or join a non-profit board about whose mission you are passionate—you’ll be doing something good for your community as well as for yourself.
6. Surround yourself with great friends
Have a great group of friends who can see you through the craziness of being an entrepreneur. They will help you celebrate the heights and get you through the depths with humor and love.
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