You may have grown up with parents who instilled in you to go to school, get a good education so you can get a good job with a pension. You were told by your parents, teachers, and society at large that you must work hard to be successful. There are a vast number of quotes about hard work.
“THERE IS NO SUBSTITUTE FOR HARD WORK.”
-THOMAS EDISON
And that is what some of us did. You got the education, and/or the job and worked hard for that promotion. Some of you decided to become an Entrepreneur. However, you interpreted the “hard work” philosophy as you must do the work yourself to make your business successful.
So, you became your employee; the sale person, cashier, accountant, cook, social media manager, marketing manager, and so on. These are all the jobs that an “employee” does for a business. What type of 9-5/9-9 employee have you become?
- Still works for someone else – exchanging hours for some dollars.
- Still works for someone else but has a “side hustle” – exchanges more hours for some more dollars.
- Works for self (i.e. solopreneur) – exchanges even more hours for less dollars.
“There are seasoned experienced entrepreneurs that are still working with an “employee” mentality. In other words, they are still working “in” their business.”
Don’t get me wrong, as a new entrepreneur starting out, you will need to fill all those jobs until you can hire others. However, there are seasoned experienced entrepreneurs that are still working with an “employee” mentality. In other words, they are still working “in” their business.
This does not allow you to manage your financials, create strategic plans, build valuable relationships or build a team of employees to help you grow your business. To truly become successful in your business, yes, you must put in the hard work, but you must also change your mindset. You must G.R.O.W.
G – stands for Grind– get out of the grind of the 9 to 5 or 9 to 9. You must allocate time to create a business plan and financial plan for your new or existing business. Otherwise, you could find yourself stuck in the 40-40-40 legacy trap. Working 40+ hours a week, for 40 years of your life to live off 40% of your income. If you can’t live off $100,000 today, how can you live off $40,000 the rest of your life?
R – stands for Retire – you must make a plan to retire your boss even if that is you. Take your business seriously. You must focus all of your efforts on building your business. You cannot continue to treat it as a “side hustle”. Start saving money so you can retire your boss. You will need financial resources to take care of your family during the transition period from employee to business owner.
O – stands for Ownership – once you have retired your boss and secured adequate financial resources to live on, then you are ready to focus 100+% on building a successful business. Often, due to our passion and enthusiasm we jump into business without a plan or sustainable sources of funding. And many have had years of success but there are many more that have failed.
According to statistics compiled by the UK House of Commons:
- The number of UK business births continued to increase from 383,000 to 414,000 between 2015 and 2016, a birth rate of 14.6% compared with a rate of 14.3% in 2015.
- The number of UK business deaths also increased from 283,000 to 328,000 between 2015 and 2016, a death rate of 11.6% compared with a rate of 10.5% in 2015.
- London was the region with the highest birth rate at 17.5% and the highest death rate at 14%.
In comparison, the U.S. failure rates are much higher:
- 20% of small businesses fail in their first year
- 30% of small business fail in their second year
- 50% of small businesses fail after five years in business.
But don’t’ despair, there are many factors you can incorporate into your business to increase your chances of success. Here are 10 keys to becoming a successful business owner:
1. Take Calculated Risks – any new business is inherently risky. The goal is to mitigate those risks as much as possible by preparing yourself in advance of opening your doors or computer.
2. Develop Creative Ideas – while your initial product or service may be unique, it will be important to have multiple offerings to keep your existing customers coming back as well as to attract new ones.
3. Develop a High Stress Tolerance – a business is very stressful and hard work. But you must find constructive ways to relieve the stress. Don’t forget to have fun and spend time with family and friends. Many businesses have destroyed families, don’t become a victim of your own success.
4. Invest in Coaching-Business and Financial – the most successful millionaires and billionaires have coaches. So, if coaching is good enough for them! Might it be good enough for you? Coaches can help you see the blind spots, offer different perspectives and keep you on the right track. One of our business coaches says, “You can’t see the picture if you are in the frame”.
5. Create a business plan– it may be a cliché, but it is so true “if you fail to plan, you plan to fail.”How will you create and guide a sustainable business to success if you don’t know where you want to go and how you are going to get there? Begin your plan with the end in mind.
6. Know Your Business Numbers – of all these keys, this is the most critical one. Most new business owners focus on their revenue/sales to gage how well they are doing. However, it is really the Net Profit after taxes that is the number to gage success. If you have money left over after all expenses have been paid and emergency funds set aside, then you have made a real profit.
Also, you must keep your business finances separate from your personal finances. Have separate bank accounts and track all your business expenses-for example; meals, supplies, miles, events, advertising, etc. Be sure to keep all your business receipts to support your expenditures.
And most importantly, ensure you protect your personal credit score, especially new entrepreneurs. Most lenders will base initial lending for your business on your personal credit score.
Here are some key personal and business numbers to keep track of:
Key Personal Factors
• Personal Credit Score
• Monthly Income
• Monthly Expenses
• Monthly Cashflow
• Net Worth
• Total Debt
Key Business KPIs
• Personal Credit Score (Startups)
• Sales Revenue
• Operating Costs
• Monthly Cash flow
• Net Profit and Margin
• Customer Acquisition Cost
• Total Debt
7. Conduct Research – know your industry so you can determine if you truly have a USP (unique selling proposition) and who is your target market/your avatar. Knowing these factors will help you put together a more effective marketing campaign to reach your market:
- Market
- Competition3.
- Product/Service
8. Employ a Competent Team – this is the second most critical factor in becoming a business owner and being able to retire your boss/self. Delegate the non-revenue generating tasks to others. You don’t even need to have an office. You can hire virtual assistance’s to take care of any task you need. Also, hire qualified salespeople, if applicable. Remember, you get what you pay for.
9. Secure Adequate Funding – it takes money to start a business and it takes money to sustain and grow a business. While the initial startup may come from your savings, family/friends or credit cards, those sources are not sustainable. Unless you start making lots of money when you start out and invest it back into the business, you will need a good personal credit score to secure funding from a lending institution until you can show steady revenue. Be careful in your use of hard money lenders. Their high interest rates, fees and short terms could significantly impede your ability to pay back the loan.
10. Execute the Plan and Stay Focused – this is where the hard work, passion, determination and drive is required. Stay focused, stay the course and create a successful and sustainable business.
W – stands for Wealth Building – while it is possible to become a wealthy business owner, not everyone wants to own a business. Whether you own a business or remain an employee, you should still consider investing your positive cash flow to grow your wealth and leave a sustainable legacy for your family. You should education yourself on the various types of investment options and understand your risk tolerance (i.e. how much are you willing to possibly lose in order to win). Having a financial education coach can prepare you to work with a trustworthy and reliable Financial Investment Advisor is a great way to start your wealth building journey.
Adapting the above 10 success factors will allow you to stop working “in” your business so you can start working “on” your business. You must be willing and committed to G.R.O.W. beyond where you are today so you can have the future you want tomorrow!
“Success is not final; failure is not fatal: It is the courage to continue that counts.”
— Winston S. Churchill
Find out more at www.tmeginc.com
