Over a year ago, a very good friend called to inform me that he was leaving his senior position in the banking industry to start his business. Having left my own paid employment to focus on my businesses several years ahead of him, I consider myself his business ‘senior’ ! We therefore arranged to meet over lunch as I felt obliged to advise him on a number of issues that I think are very important for him to think through. After our lunch and discussions, I sent him a mail capturing the essence of my ‘lecture’. Last week, he called and reminded me about the mail. I sought his consent to publish it on this blog. He agreed. I am therefore reproducing the mail and hope it also helps somebody somewhere.
Dear ………. ,
The lunch we had provided me an opportunity to remind you of a number of things that you need to consider as you strive to see to the take off of your business. These are all issues that I believe you are fully aware of. As a good friend however, it is my responsibility to remind you. I hope you take them seriously.
As I always say, success in business will result from getting several things done correctly. We couldn’t have discussed everything at one sitting. We actually can’t exhaust everything in even ten sittings. Below, however, is a summary of a few critical issues I reminded you of:
- Take your time: There are literally millions of business opportunities in our country. Each opportunity if handled well can lead to success. What is very crucial is identifying exactly which of the opportunities are congruent with your skills, interests and resources. It is therefore very important that you take your time to really study your options and ensure that there is perfect fit with the three factors mentioned above.
- Stay focussed: Having settled for a particular business, which you informed me, there will be need for you to stay focussed. Focus in business, as in any endeavour, is key to success. Most budding entrepreneurs tend to get distracted away from their core business to start others even before the first business achieves certain level of traction. This can, not only stunt the growth of the core business as you divert resources (especially limited finances and time) away, but can also jeopardise its survival as well as the ‘new’ opportunity. Staying focussed is important at all stages of business enterprise development. This helps you build your competence as each business has its gestation period and ‘tricks of the trade’.
- Manage your cash-flow: Nothing, absolutely nothing can so quickly kill your business like poor cash flow management. You have to be prudent with your finances. Though this seems quite evident, start-up entrepreneurs who have worked in large corporations tend to expect their start-up businesses to support their previous senior level executive office and life style. This, generally, is hardly possible. You must be willing to appropriately adjust as you put life into your business. Besides, it is sometimes actually ‘better’ to start a business with a little less resources than a little ‘more’ than you need. This is because it is ‘easier’ to be creative and prudent with less resources than with more. Starting at a ‘disadvantage’ will therefore help establish a prudent culture in you and the enterprise. This will come to your good stead even when you succeed and grow. So even if you have all all the financial resources you need, keep a certain amount away, obviously without jeopardising the survivability of the enterprise. Pretend that the amount does not exist. It is just to help you and your team exercise and stretch your creativity.
- ‘Recruit’ entrepreneurs: Staffing a start-up is very critical. The more staff with ‘entrepreneurial minds’, rather than ’employment mindset’, you can get, the better are your chances of success. Staff with entrepreneurial mindset will be more inclined to put in the long hours that will be required as you struggle to find your feet and bearing. They are also more likely to weather the difficult times you are very likely to face at the beginning. They will ‘view’ and accept your initial challenges with much more understanding and forbearance than their employment-minded friends. Take your time therefore and recruit staff that share your vision and are excited about it. Be upfront and clear with all about the challenges, anticipated and unanticipated, that you will all face.
- Commit to only what you can do: Entrepreneurs are generally extremely optimistic people. We therefore have the tendency to think that ‘everything is possible’. This is because we believe we can surmount all difficulties. However, sometimes difficulties can not be surmounted within a certain envisaged period. And not everyone will be willing to wait ‘forever’ as you address issues that face you and your enterprise. It is therefore very important that you only to commit to what you are sure you can do when you agree it will be done. Failure here erodes our credibility and it takes effort and time to restore that. It is simply cheaper and better to avoid its occurence.
- Develop a learning culture: From the get go, ensure that you set out to create a culture of learning in your enterprise. Your staff must learn to share their experiences so that the enterprise builds and internalises its quantum of knowledge over time. You and your staff must understanding the dynamics of your business. Building business intelligence must be taken seriously. Information must be shared amongst those that need to know on a regular and timely basis. One way to do this is to regularly review all ongoing projects and concluded transactions (whichever way they ended). Those to participate in such review sessions are all the staff that were involved and those that could be involved in such transactions in the future. Participating staff should sincerely share their experiences. To encourage sincerity, such reviews must not be turned into a blame forum. Instead, it is time to learn and even laugh about the ‘stupidity’ that has happened along the line. Failure to adopt such approach will lead to people becoming unnecessarily defensive and therefore unwilling to open up. This is what J. Paul Getty had to say: ‘To succeed in business, to reach the top, an individual must know all it is possible to know about that business’. Take learning seriously.
- Get a mentor: You will also need a mentor. Any prospective mentor must be a lot more experienced than you and sincerely wishes you success. A mentor must be a ‘been there, done that’ kind of a person. They must have established their own success, and hopefully and preferably, with reasonable medals of failures! You will need to meet your mentor from time to time, say once a quarter. Review what you discussed with them during your last meeting; any challenges you are currently facing; and what your plans are on other matters. It is always good to come up with well thought-out and proposed solutions to your dilemmas than simply relying on your mentor to come up with propositions for you. They can then refine your thoughts and make it sharper, or help you completely alter them. Remember that due to generational and educational gaps, your mentor could also learn from you. You should strive to make the interaction and relationship interesting to the mentor.
- Be ready for the long-haul: I always tell entrepreneurs that business is a marathon and not a sprint. You should therefore ensure that you have, and maintain the emotional and intellectual stamina to run the ‘marathon’. Set backs, challenges, difficulties and even failures will interweave with your successes. You must just simply enjoy the whole journey. As David Rockefeller said: ‘Success in business requires training and discipline and hard work. But if you’re not frightened by these things, the opportunities are just as great today as they ever were’. I think this remains true today. Note also that whilst some issues must be handled on immediate and short-term basis, it is very important to take a long-term perspective in running your business. This will make it easy for you to forgo instant gratifications that may however hamper the long-term success of your business.
- Don’t give up! Nobody ever succeeds in business by giving up at the sight of the slightest challenge that crops up. In fact, people only succeed in business when they develop the capacity to surmount business challenges and difficulties. I advise you to read the biographies of some of the most the successful businessmen, and you will be able to put the difficulties you are likely to face in their proper contexts and even make fun of them. Giving up in a business should only be when it is the sensible and pragmatic thing to do.
Wishing you the very best and happiness as you embark on a journey that only those with faith and confidence can embark upon. Whichever way it goes, remember this:
‘The great accomplishments of man have resulted from the transmission of ideas of enthusiasm’. – Thomas J. Watson
My best regards.
Musbahu El Yakub
9th May 2014