WHAT IT TAKES TO HAVE A SHOT AT SURVIVAL & SUCCESS...
by Dave Driscoll
I’ve been asked many times throughout my career “What helped you be successful when you started your business?” Having started my own business in my twenties, I really didn’t have a check list to aid my decision to be a business owner; I just had a very strong desire to be independent and self-directed. Now that I’m in my sixties, I can reflect on what personality traits, actions, and skills contributed to my success as an entrepreneur.
Without much money at the time, I knew I needed to keep risk very low. Starting a business with very little money helps condition you to “bootstrapping” to get by. It’s easy to excuse your problems with If only I had x…I would have a better shot at success! Not having cash required me to focus on the other resources necessary for success: hard work and putting myself out there through sales, marketing, and networking. I was 100% dependent on myself to perform. The fear of failure can be a motivator or it can paralyze. Every entrepreneur comes to this realization after the initial excitement of striking out on your own fades, and the objective turns to survival. I recognized that to be successful, I needed to start small and identify opportunities that the competition was not looking for or thought were too small.
Blessed with the ability to communicate and no hesitancy to meet people, I worked tirelessly on getting in front of my target customer. I was able to present myself as the specialist for a market niche without many competitors and deliver exceptional quality with on-time delivery.
On the financial side, I also needed to examine my financials monthly, keep overhead very low, manage expenses, and have a decent profit margin. I found an affordable bookkeeping/tax service that was an invaluable advisor.
My business began in one room, with just a desk, phone, typewriter, and me. I worked the market during the day, returned to the office to quote any products I could sell for a margin within my product group, and wrote up orders. In the beginning, I brokered products - buying from wholesalers and shipping directly to my customers. As volume grew, I identified which products I could customize to customer specifications if I had some basic equipment.
Purchasing a used machine for $250 to set up in the basement of the office and hiring my first employee, my business took the first steps into production.
Managing people, production, supplies, cash flow, and deliveries (often in my car), all while working the market during the day led to growing pains. But whatever it took, it had to be done.
Two years in, the business was producing enough cash flow to cover all expenses, including selling and marketing. Fortunately, my wife was working as a school teacher and with no children yet, we could make ends meet. Not by much, but just enough.
The next big step was moving to larger quarters with more production and warehouse space with loading docks. I found 1,500 square feet within an old industrial warehouse and made a deal with the owner to carve out an office and a little production and storage area. The business continued to grow; additional employees were hired, equipment was purchased, and the business became self-sustaining. The company was three years old before the operation/cash flow was secure enough to pay myself a modest salary; I hadn’t taken any money out until then.
From experience as a business owner, I now recognize several themes and behaviors to be successful:
- strong desire to be independent and self-directed
- appropriate balance of risk tolerance
- willingness to bootstrap to get by on limited resources
- getting in front of potential customers through sales, marketing, and networking
- communicating openly and enjoying meeting people
- self-reliance and fear of failure
- recognition of the need to start small; build slow and steady
- identifying niche opportunities that the competition doesn’t serve
- examining financials monthly
- keeping overhead very low
- protecting a decent profit margin
- consulting with an affordable bookkeeping advisor
- not taking a personal salary out of the business
- putting success of the business first; the owner is the last one to realize any income
The early years it was all about survival and success for the business. When I could sustain that success…the income followed.
Dave Driscoll is president of Metro Business Advisors, a business brokerage, valuation and exit planning firm helping owners of companies with revenue up to $20 million sell their most valuable asset. Reach Dave at DDriscoll@MetroBusinessAdvisors.com or 314-303-5600. For more information, visit www.MetroBusinessAdvisors.com.
Submitted 4 years 81 days ago