What traits and skills really make Richard Branson, Bill Gates, Donald Trump, and countless other entrepreneurs so successful?
Over the past decade, we've identified key ingredients that lead to success, which we've observed both in celebrity entrepreneurs and in our most successful clients. When it's all said and done, they have all of the following critical skills, which are essential to entrepreneurial success:
Vision & Leadership: Entrepreneurs must have a vision of where the company will be in the future. In addition, you must be able to communicate you vision so as to motivate employees, investors, and partners to help you achieve that vision. You must be able to identify staffing needs, expertly fill them, and lead your team to success. Rarely do entrepreneurs build successful companies all by themselves.
Focus & Execution: Entrepreneurs must focus to make sure that goals are achieved, customers are satisfied, and employees are motivated. For most entrepreneurs, staying focused is harder than it sounds. Be careful not to be seduced by the next exciting opportunity without executing on the priorities at hand. And don't let perfectionism prevent you from taking action, either; at the end of the day, a product on the market is better than a product shelved due to lack of focus, execution, or perfectionism. Get to market and get feedback from your customers as soon as possible.
Persistence & Passion: As an entrepreneur, you must be passionate about what you are trying to accomplish. In addition, you must be willing to commit whatever is needed of them, whether it's time, energy, money, or other resources. You must persist through trying times (which will be frequent), and fight as much as needed to achieve the goals you have set for yourself and your team.
Technical skills: As the owner of your firm, you may not need to be the most skilled technicion on your team. But you need to have necessary foundational knowledge to be able to lead your technical team and make informed decisions.
Flexibility: Successful entrepreneurs understand that the world and the environment in which they operate are constantly changing. While you must focus on the end game, you also must adapt your strategies and offerings to meet changing market conditions.
There has often been debate regarding whether entrepreneurship can be taught. Can you really teach persistence or passion? Perhaps you can't. But if you understand the importance of these entrepreneurial traits, you can focus on them and make the necessary adjustments to succeed in your entrepreneurial endeavors.
What about you -- what skills or traits do you think make entrepreneurs successful?
Just for a moment, consider the following press release headlines:
"Company X Receives Top Marks in Bloomberg Article..."
"Company X Ranked #1 Global Provider...Second Year Running"
"Company X Acquires Leading Provider of..."
"Company X Launches Philippines Operations"
"Company X Names Industry Veteran as Vice President..."
Now imagine what it would feel like to be the founder of Company X. For one Growthink client, Liam Brown, this isn't a dream - it's a reality.
A few years ago, Liam had the vision to come to Growthink for assistance with a business plan for his vision - a company named Integreon. Liam, with a solid business plan, turned his vision into a business, raised capital, and attracted a highly motivated work force. Today, Integreon is a leading business process outsourcing (BPO) service firm that employs over 2000 people, with offices ranging from Mumbai to Fargo and New Delhi to midtown Manhattan.
Even with an amazing business plan, heights and milestones like the ones listed above cannot be achieved without vision. Simply put, you must have a vision of where you want your business to be in the future. You must be able to communicate your vision in an exciting manner to employees and investors, so that they too share your vision and are motivated to help you achieve it.
Unlike your business plan, your vision doesn't provide a specific roadmap for your business. Rather, your vision paints a picture of what the your business strives to become in the future. A leader with a strong vision motivates his or her team to achieve this picture, regardless of the action plan that will be employed.
Vision provides motivation to both the leader and employees. It gives employees something that they can believe in and rally around. While it doesn't tell the employees exactly what to do to achieve it, having vision instilled in them helps positively mold their decision-making when problems must be solved that don't have clear answers.
A strong vision combined with a strong business plan is critical to the success of a growing venture. The vision motivates everyone to achieve success, while the plan guides them to where they need to go. In addition, the plan is significant in that it documents the vision. By "cementing" the vision on paper, the team gains more confidence that the vision will not be easily changed and that the organization is truly committed to achieving it.
In my previous post, I explained how getting an outside perspective improves your chances of raising capital.
There is a second, equally important, benefit of retaining a business planning consultant to develop your business plan: it improves your business strategy.
Let's start with some facts...
Fact #1: There are 24 million businesses in the United States alone.
Fact #2: History tends to repeat itself.
What I mean is, if you have an idea, whether it's a marketing idea, operations idea -- anything really -- chances are it's been tried before. Chances are also that if it failed the first time, it will most likely fail again.
That's not to be discouraging, because there's a decent chance that it wasn't executed properly the first time, or lacked the nuances you bring to the idea. Regardless -- if your idea has been tested before, I bet you want to know about it.
When you are aware of the earlier attempts of an idea, you can quickly learn from them and either 1) Determine that it won't work (and cut your losses) or 2) refine the strategy and make it work. But, if you never know about those other attempts, your chances of failure are increased.
A competent business plan advisor can provide a lot of value during this research and discovery phase. Reputable business plan consultants not only perform market research, they leverage their existing knowledge and experiences regarding their own businesses and the businesses of their colleagues. This positions them to point out those potential pitfalls and strategies which have failed in the past, as well as strategies that have been proven to work.
This is very important, because unrealistic assumptions can kill a business.
To explore this, let's take an example from a company I just spoke with yesterday. This firm is about to launch a new division offering BPO (business process outsourcing) services. When I asked about their expected sales cycle (the time it takes from when they contact a prospective customer to when they secure the client) they answered 3 to 6 months.
Well, 3 to 6 months is a reasonable sales cycle in this industry. But what if they told me 3 to 6 weeks? Worse yet, what if they went out and succeeded in raising financing -- expecting revenues to come in within a 3 to 6 week period?
Most likely, they would have raised too little money and gone bankrupt while anxiously waiting for prospects to become customers.
There's another piece to business strategy consulting, which involves taking interesting (or even seemingly mundane) ideas from other industries and finding creative ways to adapt them to your business. These types of insights are frequently offered by outside advisors and have been known to result in breakthroughs responsible for transforming entire industries.
Consider roll-on deodorant. The "roll-on" part was inspired by the ball-point pen. Before that, deodorant was packaged in cream form. Or, consider Fred Smith's Fedex. Smith applied the banking industry's method of clearing overnight checks to the overnight delivery of packages. Each of these cross-industry breakthroughs resulted in billion dollar industries.
I'll admit it... As a kid, I hated history class. I couldn't imagine information less relevant to my life than what happened in Europe 600 years ago. But you can't be ignorant about what has happened in the past or what is happening around you -- even half-way across the globe -- because it does affect you. Knowing what other companies are doing, what's working and what's failed -- that's the information that will prevent you from repeating failures and allow you to replicate success.
Who knows? A well-researched busines strategy might just result in a breakthrough that establishes your place in business history.
Yesterday I was looking at an online forum that deals with all aspects of entrepreneurship. I quickly found the capital-raising section and started reading a post from someone who was considering outsourcing the development of their business plan to an outside firm.
Shortly thereafter, I saw a comment from an entrepreneur named Joe, who said, "How could you even consider outsourcing your business plan? Only you know your business well enough to write it."
Well, I'm probably pretty biased on this topic, since Growthink has been developing business plans for clients for a decade. I want to put that bias aside for a minute, though, because I'd like to explain the value of letting nearly anyone outside your company help with the development of your business plan.
Here's my stance: Only outside viewpoints can ensure that your business plan includes both a solid Business Strategy and Communications Strategy. Right now, I want to talk about Communications Strategy - I'll touch on Business Strategy in an upcoming blog post.
Before we go any further, however, I want to dispel the biggest myth about business plans.
Most people think that the goal of a business plan is to provide an in-depth analysis of your business. If you have any aspirations of presenting your plan to outside investors, then this thinking is incomplete. But most entrepreneurs are looking for a business plan to raise capital to market your company to investors.
Yes, your business plan is a marketing document.
Would you buy toothpaste whose packaging states, in huge letters, "Sodium Fluoride," "Tetra Potassium Pyrophosphate," and "Titanium Dioxide?"
We all purchase toothpaste whose packaging promotes the BENEFITS such as "freshens breath," "whitens teeth" and "prevents cavities."
The same is true with business plans. You should never -- particularly at the beginning -- pile on information about the details of your business. Rather, you need to focus on the benefits that investors will care about: the size of the addressable market, the milestones you've achieved to-date, what you have that your competitors don't -- and, importantly, how you expect them to get a return on their dollars.
A great communications strategy, in business planning, or in anything else, starts with figuring out what your audience wants to, needs to, and/or is willing to hear. Then, of course, you have to give it to them. You must put yourself in your audience's shoes and figure out the most compelling way to convey the benefits of your business to them.
Back to Joe's quote, "Only you know your business well enough..." Following his logic, there would be no advertising agencies or public relations firms.
Actually, imagine if all of your competitors decided to do all of their advertising and PR in-house, and you were the only one to seek outside, professional assistance. Your marketing would likely dominate your competitors'.
In the same way, when your business plan brilliantly communicates the benefits of your business to investors, you give yourself an immeasurable competitive advantage over the thousands and thousands of other businesses out there competing for capital.
It's no wonder that only a very small percentage of companies seeking venture capital successfully raise it. Yes, the majority of contenders may "know their business well enough," but sadly, not well enough to convince others to invest.
2008 was a tumultuous year, and most observers agree that we're now in one of the worst recessions in decades.
While the economy may be in for a bumpy ride, make sure you keep it in perspective. Don't let all the negative news stop you from moving forward with your entrepreneurial initiatives.
History has shown that a downturn can be a great time to start a new venture. General Electric traces its roots to the Panic of 1873. William Hewlett and David Packard founded HP during the Great Depression. Microsoft launched during the recession of the early 1980s. Disney, Oracle, and Cisco, and countless others took the leap during difficult economic times, and reaped tremendous rewards for their efforts.
One reason that recessions provide opportunities for entrepreneurial companies is because established firms decide to cut back on innovation and growth plans. Don't make that mistake! The key is to be running and growing your business successfully before the market comes back -- so that when it does, you have gained market share and are poised for explosive growth. As we've said before, persistence and optimism are critical for entrepreneurial success.
Running and growing a successful business requires that numerous jobs be performed at once, and well. The start of a new year provides an opportunity to take stock of your most precious commodity: your time.
What are you best at? Where do you add the most value?
Learn how and when to delegate or outsource certain tasks and responsibilities.
8) Build and Improve Systems and Processes
Most successful businesses are successful because they have effective systems in place. For example, if you walk into any McDonalds across the country, and order a Big Mac, you know exactly what to expect.
As Michael Gerber points out in The E-Myth Revisited, it’s critical that entrepreneurs build businesses, rather building an ever-increasingly stressful and taxing J-O-B.
Especially if you're interested in selling your business, you want to be able to walk away from the business and have it continue to run.
7) Build and Nurture an In-House Email List
Whether you run a dental practice, a restaurant, a software company or a social networking website, chances are you could be getting more out of your website traffic.
One way to improve the efficacy of your website is to offer an email newsletter via an online email submission form.
Building and maintaining an email list could be one of the best ROI decisions you make in 2009. Constant Contact and AWeber are two recommended resources for email communications. And, if you run a blog, you can set up blog-to-email newsletters using services like FeedBlitz.
6) Participate in Online Conversations
If you haven't already done so, start a blog, create an account at Twitter, sign up for Facebook, join LinkedIn... whatever your website or tactic of choice, get online and contribute to the conversations about your industry online.
5) Meet More People (Out in the "Real" Offline World)
Join new networking groups to establish relationships and potential partnerships with people and firms in your area. One great way to jumpstart your offline networking is to leverage MeetUp.com. MeetUp.com has thousands of business networking groups. If you don't see a group in your niche, you can even start your own.
4) Get a Life (Outside of Work)
It's critical that you take breaks from your business to enjoy life.
Make a resolution to enjoy physical as well as mental vacations from
your business every once in a while. This is not only good for your
health and sanity and relationships, it's also good for business!
You'll gain relief the stresses of growing your business, and once you
return, you'll be reinvigorated with a new perspective on your
challenges and opportunities.
3) If It's Not Working, Ditch It
Let’s be honest. Not every marketing strategy, fundraising strategy, partnership, or product line will be a winner. If you tried something in 2008 and it wasn't working, you might want to admit that and move on. Focus your energy and resources towards those priorities that will deliver the greatest return on investment (both in terms of time and money).
2) Learn Something New, Again and Again
Make a commitment to continual education. Stay updated on your industry while branching out into new areas of knowledge. Read blogs, books, newspapers, and magazines. An easy way to incorporate learning into your every day routine is to listen to interviews, audiobooks and podcasts. Summary.com is a great, convenient service for integrating business education into a busy schedule.
1) Continually Update Your Business Plan and “To Do” Lists
Update your business plan weekly, monthly and quarterly, depending on what’s changing in your industry and what you’ve accomplished in your business.
Updating your plan can be a critical factor in both your ability to raise capital and your ability to properly execute on market opportunities. The sections that typically require periodic updates include the milestones, competition, management team and financials sections.
To increase your personal and corporate productivity, take advantage of tools like Basecamp which allow you to track tasks and milestones online in a collaborative "wiki" environment.
For a great read on productivity, we recommend The Ultimate Sales Machine by Chet Holmes. As Chet recommends, focus on the daily tasks that are most critical to your growth, and keep the daily “to do” list brief (no more than 6 items).
That's it! I hope you found this list to be helpful for growing your business. Here's wishing you a prosperous 2009!
Sounds like a lot of territory to cover in such a short amount of time, doesn’t it? Surprisingly, it wasn’t. I managed to do it all… within one square mile or less.
The wonder of being in LA and having clients all over the world is that there’s one particular destination to which everyone is drawn. In addition, it’s fairly central to travelers doing business in the western half of the U.S.
No, it’s not Fresno.
Las Vegas is a desert Mecca of entertainment, gambling, and business. The latter is conducted everywhere from conference centers and meeting rooms, to poker tables, bars, restaurants, music halls, and nightclubs. Low and behold, I found myself in precisely such a scenario last week, accompanied by two Growthink colleagues and a handful of Brazilian clients. I knew, immediately, that this trip would be ripe for a sitcom episode.
My associate, Tristan, and I must have been dreaming when we thought we could fly in and out of Vegas for a day-long meeting. “We’ll have a productive day,” we thought, “and then we’ll just have a cocktail or two and head to the airport.”
Cut to 8p.m., when the entire gang of us could be found at Red Square – the infamous Russian destination in Mandalay Bay that features a plethora of caviar and spirits. Flights of sample wheat and potato, flavored and un-flavored vodkas were delivered to our table; and we relished in tasting each and every one, discussing the bouquet and the lingering effect of the smooth liquor on our palettes. In the midst of an amplified discussion, Tristan and I announced our impending departure and were immediately harangued into calling Southwest to arrange morning flights.
How can one argue with a handful of handsome Latin American men? Well, that was my excuse, at least – I can’t speak for Tristan!
After securing two seats on the 10:45a.m. flight to LA, we settled back in at the table and proceeded to talk about everything: politics, music, travel, the state of the economy… no subject was left untouched, and no better time was had. A singer by training, I was urged to perform for the group – which I did, right in the middle of the restaurant! Only in Vegas would no one give a second thought or a glance to a gal belting out an impromptu showtune.
Carrying on with the cabaret vibe, I suggested we continue the party at Forty Deuce – a burlesque club reminiscent of old Berlin: bawdy but glamorous; fishnets and feather boas; red leather seats and bottle service. Having worked for the owner prior to joining Growthink (I led corporate development initiatives for the parent company), I was able to secure the best VIP seats adjacent to the stage. The next two hours found us smiling, dancing, watching the show, and having an all-around amazing time that would not have happened if we weren’t in a place like Vegas. It inspired a camaraderie, which already existed from prior meetings but was enhanced by an environment of slightly daring opportunity. I mean, how many times does a one-day business trip turn into a 36-hour excursion?
When we finally shut our eyes that night, able to find last-minute rooms thanks to the down-season hotel occupancy rates, we knew we had solidified a long-term client relationship. More than that: we had developed friendships.
The next morning we gathered for coffee in the lobby before heading to board our plane. Bleary-eyed and tired, but anxious to proceed with our combined business-planning project, we all laughed, shook hands, and bade each other farewell until the next meeting in 2009.
Growthink's Co-Founder Dave Lavinsky had the opportunity to speak with entrepreneurship guru Guy Kawasaki last week. Guy is the Managing Director of Garage Technology Ventures. His blog, "How To Change the World," is ranked among the world's top 100 blogs, and he is a successful author. In 2004, his book "The Art of the Start" was a BusinessWeek bestseller.
Far too many businesses fail to raise capital because they lack the proper documentation, or because their marketing and offering materials (business plans, private placement memorandum, investor presentations) are unprofessional, unpersuasive, inadequate or incomplete.
If you are raising capital from multiple private ("angel") investors, a private placement memorandum (PPM) is a necessary part of your documentation. Unfortunately, however, the vast majority of entrepreneurs and business owners are not familiar with details of preparing a private placement memorandum and marketing a private placement offering. In too many instances, this lack of knowledge prevents them from raising necessary capital, or -- even worse -- it can create costly liability problems.
To assist entrepreneurs, we created this report - "The Top 10 Private Placement Memorandum Mistakes" - to help answer some of the most frequently asked questions. We hope the report will help prevent many of the common errors we see businesses make during the process of preparing a private placement memorandum, marketing it to investors, and raising (or failing to raise) capital from private investors.
Some common questions answered in the report include: - When do you need a private placement memorandum to raise capital? - What types of disclosures must be made in a PPM? - How can you market a private offering, while retaining a Regulation D exemption? - What types of intermediaries and "finders" can promote a private offering? - What types of investors can participate in a private placement? - What are your options for preparing a private placement memorandum? - How often should you edit or update a PPM?
If you are seeking professional assistance with your PPM, Growthink offers professional private placement memorandum writing and consulting services.
Or, if you're writing your PPM yourself, you can use our Sample Private Placement Memorandum Template to finish your PPM quickly and easily, so that you spend less time "preparing," and more time speaking with investors.
Increased production of fuel-efficient vehicles and energy-saving technologies
Rationalization of brands, models and retail outlets
Reduced wage and benefit costs, including further reductions in executive compensation
Significant capital structure restructuring
Consolidation in manufacturing operations
Ford is requesting a standby letter of credit for up to $9 billion.
is requesting loans of up to $12 billion.
Chrysler is requesting loans
of up to $7 billion.
The potential repercussions...
The automakers - especially GM and Chrysler - predict catastrophe if they do not receive the loans.
In its business plan, GM claims that without "such assistance, the company will default in the near term, very likely precipitating a total collapse of the domestic industry and its extensive supply chain ... The cost of failure in this instance would be enormous for everyone."
Chrylser argues that the $7 billion is "necessary to prevent further economic decline, if not outright economic depression."
What others have to say
Recent polls have shown varying degrees of support for the bailout among the public.
According to a USA TODAY/Gallup Poll, 47% of adults believe "providing loans and other help" to auto companies is "not very important."
A poll conducted on Nov. 11-12 by Peter D. Hart Research Associates, found that 55% of Americans believe that the government should provide loans to American automakers, while 30% oppose.
A CNN/Opinion Research Corp. poll, conducted by telephone on Dec. 1-2 with nearly 1,100 people, showed that 61% of those surveyed oppose government assistance for the major U.S. automakers.
Entrepreneurs: what do you think?
Here at Growthink, we're curious to hear what entrepreneurs -- who are used to shopping their business plans around to lenders and investors -- have to say about the automakers' business plans and potential bailout.