This blog is my experience of answering the questions that were asked to me by first time entrepreneurs while they were participating in my Business Coaching Program. Among many, I have chosen to answer the 9 frequently asked questions that every budding entrepreneur would carry in his mind before starting a business. My answers to all these questions are your business tips for success that would accelerate your entrepreneurial journey to a next level.
Business Tips For Success Through Questions & Answers:
- Can running a company be learnt through books and articles ?
The counter question to the above question that I normally ask my participants is “Can you fall in love with your opposite sex just by reading a book on romance ?” – Of course no. You got to fall in love to fall in love. As simple as that. Similarly, to learn entrepreneurship, you got to dive in – Starting a business is the only way to learn how to run a company? A strategy used by a successful retail business cannot be applied to a training business. As an entrepreneur or a CEO, you have to devise your own strategy for your business success. That is the very reason you are a CEO. Books and articles can definitely be an accelerating factor to drive your business strategy, but a complete guide for your running a company comes only once you dive and start experiencing. Books and articles can give definitely give you few business tips for success, but, nothing on earth can you teach you better than your own experience.
2. Should I work in a company before starting a business of my own?
There are few entrepreneurs who started their entrepreneurial journey without any working experience – Mark Zuckerberg, Steve Jobs, Bill Gates to name a few. The fact is that the number of such tech-wizard heroes who make it big in terms of money and fame at a young age (and mostly male) is less than 10% of the overall entrepreneurs on earth. They are fortunate to be invested by high esteemed investors and get most of the media attention. But, there is also a negative side of such start-up heroes and their businesses – they experience the highest rate of failures. About seven to eight businesses in ten disappear within 5 years of their inception – The story of Webvan is a great example of a big failure. Therefore, business tips for success from these celebrated entrepreneurs may not be relevant for starting a business.
The research done by Kauffman Foundation on the subject of successful entrepreneurship says a very different story. Among successful entrepreneurs, many never went to a college (forget about dropping out) and others did not start their venture until they have got well along in their careers. The age of an average entrepreneur when he starts is about 40 years. As an example, think about Subroto Bagchi of MindTree Ltd. who started at the age of 42 and got the company to IPO in a record 9 years of time. Eighty percent of all new companies are started by people who are above thirty-five ( who had a stunning career of 15 long years ). I was amazed when I learned that, more entrepreneurs are between the age of forty-five and fifty-five and entrepreneurs over fifty-five now create more companies than those under thirty-five. One more surprising fact is that, the chances of a starting a business and it’s surviving increases as the age of the entrepreneur rises. This is because of the natural mental maturity and corporate experience that they carry compared to the young blooded entrepreneurs.
If you are still at the beginning of your career, I strongly recommend you to make your company as a school to learn business tips and start-up lessons like how to organise a team, how to sell a product, how to acquire another company, how to build client relationships, how to maintain legal and regulatory information etc. The fact is – an average entrepreneur will be an employee for almost 15 years before starting a company.
3. How many years does it take to build a successful company?
Starting a business with dreams of making it overnight success is foolishness. Great companies do not happen overnight. If you have come across any company that enjoyed overnight success, then, probably you have not noticed their several years of silent hard work and perseverance. All successful companies have taken at least a decade to stay strong and attract public investors. Google took 7 long years to be able to tell a convincing story to public investors. Microsoft and Oracle waited for 11 years, Amazon took 10 good years, Infosys went public in 12 years, MindTree had its IPO in 9 years.
Many unsuccessful entrepreneurs think that starting a business is all about one good idea. In fact, every successful entrepreneur knows that their first idea never made their company successful. The reality is, every startup exists to search for an idea for a product or service, that can be evolved through continuous development as a result of market testing and iteration until they could be scaled. The successful idea is one that could be changed as per the market needs. Every startup has to constantly and continuously improve its products and services if it hopes to survive. Business tips for improvement should be considered from experts in the industry as you cannot possess the entire knowledge in the world.
I personally do not go with the notion of serial entrepreneurship, whose founder’s the only intention of starting a business is just to sell it to someone within 2 or 3 years of its inception. Passionate and real entrepreneurs stay in the company they found for a long time to see it growing and becoming an inspiring story for generations to come. Infosys is a classic example for this.
4. Should we go in search of a venture capitalist for our initial funding?
This is one of my top business tips for success in fundraising for entrepreneurs who are newly starting a business. I will answer this based on my personal opinion rather making it generic. Every business need initial capital to start with. I agree. I have come across several budding entrepreneurs who attend every start-up summit or events in multiple cities in search of a venture capitalist for funding their idea. Most of these fellows have a common misconception that, the business is more likely to succeed if a venture capitalist backs it. This misconception is because of the hype created by media about the silicon valley’s widely successful companies. I would definitely agree to the fact that, most of the well-known technology companies could never have reached critical mass without venture backing, but, not having a venture backing alone should not be the reason for not starting a business. Also, it is important to understand that, all venture backing companies are not successful or does not guarantee success – The failure story of Indian retail start-up Subhiksha is a great example for this.
Just because, a venture capitalist turned down your idea, does not mean your idea cannot be the next big thing on this planet. I have come across several budding entrepreneurs during my Business Coaching Program, who dropped their ideas just because a venture capitalist had no interest in it. You shouldn’t do this. It’s insane to drop your idea. I would rather suggest you work on it and improve your idea and the value proposition that it provides to the customers. One more hiccup for entrepreneurs who get funded is the continuous unnecessary interferences from the investors into the business operations which could probably make the founders lose focus, eventually resulting in business failure.
If you were to take my suggestion, then, instead of going in search of venture funding for starting a business, bootstrap your business with the help of your parents, siblings, relatives, friends, well-wishers, who will not kill you for not repaying them on time. And these are the one who does not interfere with your daily business activity (Please do not take their money for granted). Once you have a keen insight into your company’s product/service, its customers and right strategy on how your company will make profits, approach angel investors or venture capitalists. Consider this as one of my important business tips when it comes to funding.
5. Should every successful company have a co-founder?
Infosys had 7 co-founders, Apple had 2 co-founders, Microsoft had 2 co-founders, Flipkart has 2 co-founders, Ola has 2 co-founders and MindTree had 10 co-founders. All are highly successful companies. This does not mean, having co-founders made the company successful. The key factor here is that they all had only one decision maker, that is, one CEO. From each of the above-mentioned companies, there is only one person who is very well known to the media and the rest of the world outside the company. He is the entrepreneur-in-chief. For example, Infosys – Narayana Murthy, Apple – Steve Jobs, Microsoft – Bill Gates, Flipkart – Sachin Bansal, Ola – Bhavish Agrawal, MindTree – Subroto Bagchi. The CEO is the driving force of the company, without whom the company would not have even started. The CEO is the one who came forward with an idea, first articulated the vision for the company and brought others together for starting a business.
Having a single CEO for a company avoids problems at the leadership level. The entire company would have to look up to only a single person as their leader. On the contrary, having multiple CEOs will lead to ego problems because of the difference in opinion that both carry over solving a particular problem. They value their self-esteem over the actual problem to be solved. Also, investors are more happy to invest in a company that is run by a single decision-maker who can be held responsible for a company’s operations and results.
6. Can I hire my close friend as one of my initial employees?
The answer is very much straightforward and one of my very important business tips for success who are surrounded with many friends and relatives. Do not hire friends or relatives in the first place while starting a business. To be precise, never hire your friends or relatives as your employees while you are on the leadership team. As an entrepreneur, your company should be your first priority when it comes to your official life. You are now a boss. You should be in a position to fire people once you realize they are unable to contribute to the company in anyway. This can happen only if you are free from emotions. Hiring friends or relatives is very easy, but, your emotions will take a front seat while you want them out of company for any reason. I have found such problems with many of my clients who hired their friends and relatives for easy availability of resources presuming they know them well, only to discover later that, they hardly knew them outside the friend zone. You end up losing a great relationship if things go wrong at the workplace. It is not worth the hire. Friendship and employment relationships can never go hand in hand. Better back away from the idea of hiring your close friends or relatives.
7. Which is the most important segment of business ?
For starting a business and to successfully run it, you need to have a great team for each segments like Human Resources, Finance, Operations and Sales. Though, each segments interact with each other to achieve a common goal, I personally feel “sales” is what is very important among all other segments. Sales is the one that brings in the required revenue to keep the company’s functions running. Focus more and more on sales with utmost customer satisfaction. Understand the customer needs thoroughly and design your product or service as per their needs. Do not over design nor under design. Devise a extraordinary sales strategy that brings in more and more revenue through maximum sales.
8. What is the basic quality of a budding entrepreneur ?
In a single phrase – “Love for more money” is the basic quality that I see in every budding entrepreneur. Making money is what entrepreneurship is all about. But, the phrase will be wrongly projected if I do not make you aware of the fact that, money is only a byproduct of the good work we do. Love for money is not a bad thing, but, focusing only on money is a wrong way to attract money. To attract money, focus on your good work. Give awesome service to your customers in ways that customers fall in love with you. Happy customers help you grow richer and richer. If you are richer, only then you can feed your employees and their families. Making money is the only way to grow your country’s economy.
Starting a business of your own involves disturbing a safe career path, emptying savings, living with debts, late night works and praying the almighty not to make the initial predictions of family and friends who warned of failure. After so much of struggle, one cannot explain the overwhelming experience that a successful entrepreneur goes through when he sees his bank balance shooting to greater heights beyond something that anyone could imagine. I feel everyone should experience it.
9. What is that the one character that every entrepreneur should possess when faced with a tough situation?
Starting a business is all about Intuition – This is the ability to understand and acquire knowledge instinctively, without the need for any proof or conscious reasoning. In simple words, it is a gut feeling that anything worth could be achieved and any problem could be solved. Intuition helps entrepreneurs build their own door when the opportunity does not knock. Most entrepreneurs started building their business with this one feeling. Most of the times, entrepreneurs would hear a quiet voice from within to act when an inspiring thought comes to their mind. All billion dollar companies are a result of intuition. Take it Google, Facebook, Amazon, Apple, etc., all had an inspiring thought that never existed in the world before but strongly felt that, they could be the future. They worked with their intuition and made it big. When faced with a tough situation, remember this line by Robert Schuller – “Tough Times Never Last, But, Tough People Do”.
Hope you enjoyed and learned a lot from reading this blog post on 9 business tips for success for every first-time entrepreneur.
In the blog 5 characteristics of every successful entrepreneur I have detailed, what characteristics should every entrepreneur build in themselves to make them successful in business?
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