Entrepreneurs have it hard enough as it is. There’s no reason to make running your business harder than it needs to be. I’d like to offer a few thoughts to new and old entrepreneurs alike on what I’ve found to be critical learning points both from running my business, investing in others, advising others, and simply watching others from the sidelines.
If you’re an entrepreneur you pour your heart and soul into your business. You need every edge you can get. The first edge available to you is not doing stupid stuff. In the past month I have spent a lot of time with other entrepreneurs and I have seen a bunch of good things and a bunch of bad things. Today I’ll share some of those observations with the hope you find it helpful and use these perspectives to strengthen your business.
In the past I have covered some other challenges entrepreneurs face and I hereby declare them required reading. So here they are:
– Two traps that destroy entrepreneurs – CLICK HERE TO READ
– Two more traps that destroy entrepreneurs – CLICK HERE TO READ
– Entrepreneurs need to bootstrap to WIN – CLICK HERE TO READ
After you’re done reading them, continue with this post. The following tips are in no particular order nor are there broad categories they belong to. It’s simply a list of things I have seen go wrong recently and some thoughts on how to avoid those behaviors. Here goes:
1. Don’t name your company after yourself. I know you’re enamored with your own name and it’s easy to just name your company Schlockenstine and Company. It worked for Ford, Trump, and some other great entrepreneurs. That said, it can put you at a disadvantage when you are small. Typically you sell to big companies. They want suppliers who can support their bigger needs. If they have to choose between a company that clearly sounds like a one or two man band or a company that sounds bigger, they’ll be biased toward the latter. Change the name folks.
2. When people offer advice, listen… especially when you ask for it. I saw a guy go to a meeting where he got to pitch his company to investors. He kind of listened to the feedback (but not really). That’s not the bad part. When the second company pitched and was receiving its feedback, founder #1 was too busy pecking away on email to hear the feedback the other company was getting. Bigtime miss. It left a bad impression and sent the message he wasn’t interested in the investors’ perspectives. Fail.
3. Don’t underprice yourself. I’ve talked a lot about pricing before. Here’s a great post on the subject of pricing – CLICK HERE to read it. For many of you just starting businesses, you’ll struggle with pricing. It’s the most difficult and most important decision you can make. Many entrepreneurs are nervous about charging what they feel are high rates for their products or services. By being cheap, it’s easier to sell. The problem with that is you devalue the perceived quality of your product/service. You also make cash flow very difficult and increase the amount of selling effort you have to put in to make money. Price according to market rates. Get comfortable with that conversation on pricing.
For those of you selling professional services, take your last “real job’s” total cash compensation (base + bonus). Multiply by 3. Divide by 2000. That’s your hourly rate. When you first see the number you will choke on it but you have to realize, as an entrepreneur you don’t get paid vacation, healthcare subsidies, benefits, and other corporate perks. You also won’t be 100% utilized (translation – you’ll have unpaid time on your hands). To make “even money” with what you were making, use this formula. Trust me. It works.
4. FOLLOW UP! You would be shocked at the number of times I have told both entrepreneurs and job seekers to connect to me on LinkedIn and spin through my contacts. I tell them to spin through and I’m happy to make introductions they are interested in. And then they don’t do it. They are “too busy” to look through my contacts. I don’t know what they’re too busy doing. I am offering a personal contact, endorsement, and highly qualified sales or partnership lead. Walking away from that opportunity is pure stupidity. When things like that are served up to you on a platter, take advantage of them. I guarantee my contacts and endorsement are 1000x more fruitful than all your cold-call business development or mass marketing efforts.
5. Strike while the iron is hot. Your business is the most important thing in the world. To you. Your customers have 100000 other things going on and you are but one tiny part of their work. When they finally get around to reaching out to you, drop everything and seal the deal. You have their attention. Exploit that opportunity. If you tell them you’re too busy and you’ll catch up with them in a few weeks (or even worse you’re slow to return their calls or emails) you deserve to wait another 3 months until they get back to you. When that client phone call comes in, you need to focus on moving things forward as quickly as you can.
Those are a few top-of-mind perspectives that should help you make your business more successful. Do you agree/disagree with them? What tips do you have for entrepreneurs? Please share via comment.
Did you enjoy this post? If so, I highly encourage you to take about 30 seconds to become a regular subscriber to this blog. It’s free, fun, practical, and only a couple of emails a week (I promise!). SIGN UP HERE to get the thoughtLEADERS blog delivered to your inbox every week!