Ah, entrepreneurship… It’s the dream, right? To be your own boss, make more money than you know what to do with and work from some exotic island escape – just because you can!
Unfortunately, the realities of owning your own business are far less glamorous. In fact, 50% of all businesses close their doors after just 5 years.
But successful entrepreneurs understand the secret to running a business… the “recipe for success” if you will…
And this “recipe” goes way beyond the latest app or productivity trick… Those are just tools. True success lies in the philosophies and mindsets an entrepreneur adopts.
Let’s take a look at what these important philosophies and mindsets are.
1. Know Your “Why?”
Running a business is hard. Really hard! There’s a lot of risk, constant uncertainty and long hours. Examine closely why you want to subject yourself to this and make sure your goal is worth the sacrifices that will be required.
For example… maybe your goal is more control? More money? To make the world a better place?
Whatever your reason is, it’s really important to know “why” and remind yourself of this regularly. Otherwise, it’s easy to quickly drift in the wrong direction.
2. Know Your Customers
Can you effectively sell a product or service to someone you know nothing about? It’s not likely… One of the keys to successful selling, and consequently, to your business, is knowing what your customers actually want.
Why do they buy, what are their needs? When you understand this, you can effectively present your product as the perfect solution.
Not sure what your customers want? Finding out really isn’t that difficult… Ask them! This can be done via email, phone, online survey… whatever works for your business.
Other tools such as Google Trends can tell you what the general public is interested in and a quick perusal of social media, online forums, or blog comments will give you a good idea of what your ideal customer likes, dislikes and is concerned with.
3. Cashflow is EVERYTHING!
The minute you start your business, you will have expenses (even if it’s just paying for your domain name, buying paper and pens, whatever). Start mapping out your revenue and expenses at least 12 months into the future so you have a clear month-to-month view of how much cash you have.
Be as pessimistic as possible and reconcile your cash flows each month using your bank statement (adjust future months as needed). Running out of money is an absolute dead end. You don’t want to be caught off guard and not have the funds to pay employees/suppliers… or start racking up high-interest debt (ex. credit cards).
Reviewing your cash flows each month will alert you to possible cash flow deficiencies down the road and allow you to plan for it ahead of time (ex. reduce costs, find additional revenue, low-interest debt financing or equity financing).
Using a tool like QuickBooks is invaluable as it allows you to easily keep track of your finances, communicate with your accountants (most are familiar with Quickbooks) and do year end taxes.
4. Mind Your Energy Supply
Running a small business will take a LOT out of you. You’ll have plenty of beginner adrenaline at first and you can run on this for while. BUT the honeymoon period eventually ends and that’s when the hard work really begins.
There’s a lot of ideas out there on how to be successful, but the only consistent ingredient is… persistence. Success is inevitable, you just don’t know when it will come. In the meantime, you have to find a way to enjoy the journey.
Simple things like eating healthy, daily exercise routines, unplugging, getting away and spending time with friends/family are critical. If you master this, your success is 100% guaranteed. If you don’t, you’ll likely give up or end up ruining your health and your relationships.
5. Invest In Yourself
No matter who you are and what your experience level is, there’s always something to learn; some skill to improve upon. A successful entrepreneur understands this and is constantly looking for ways to grow.
In the information age, there’s no shortage of books, courses, webinars and conferences. The key is finding the right ones for your needs and budget…
Start with an honest examination of you and your business. What are your strengths and weaknesses? What do your customers need more of? Is there a specific skill that, should you acquire it, will likely lead to increased revenue, time saved and/or more success?
Once you know what you need to learn, the next step is discovering where to learn it or who to learn it from. There are many resources out there in every subject imaginable; some good, some bad, some free and some quite expensive.
Use good judgement, do NOT exceed your budget (remember what I said about cash flow?) and be sure to only purchase resources you actually plan to utilize… The course you never complete is worthless and only serves to burn a hole is your wallet.
6. Celebrate Every Win
Did I mention that entrepreneurship is hard? Well it bares repeating… That’s not said to discourage you, but to prepare you for the journey. Yes, running your own business will be tough, but it’s also incredibly liberating and exciting!
One tip I’ve found essential in my own entrepreneurial journey is to celebrate the wins, big and small. This doesn’t mean I throw a party every time we get a new customer. But it does mean I take time here and there to congratulate my team, reflect on the good things we’ve done and yeah, sometimes even throw a party!
So that’s it! The 6 key philosophies and mindsets I believe every entrepreneur must have to be successful.
What do you think? Anything you need to work on or disagree with? Let me know in the comments. I’d love to hear your “recipe for success” and how it’s helped you achieve your goals.