12 Pieces of Advice for Erstwhile Entrepreneurs
As I think back to my 22 years as an entrepreneur, I have come up with a dozen important pieces of advice that I suggest that anybody who embarks on this track should follow. Here they are:
- Facing the Challenge of Doing Business and Getting Business – This is the universal trap most new entrepreneurs encounter. In the entrepreneurial honeymoon stage, they get very, very busy and start making some pretty good money. They devote their efforts to doing this work and one day they wake up and it’s all done, and they have nothing to do. All of a sudden, they must move into a marketing mode and seek out new business. Unfortunately, the toughest time to get business is when you really need it. You get more and more desperate. You press. It becomes a vicious circle, and potential clients sense your desperation. The bills mount up and the unexpected ones like home or car repairs suddenly appear. The entrepreneur’s mettle is truly tested during these periods and many don’t survive. Such crises can be avoided by constantly being on the lookout for new business no matter how busy you are. You must continue to network, meet new people and try to close new accounts. As an entrepreneur peer once told me – “You have to take on the mentality of a shark – you have to consume even when you’re not hungry.”
- Collecting Receivables – Unlike salaried employee, the entrepreneur requires payment from customers and clients to run his/her business and household. Unfortunately, such payment is not constant and steady, which leads to the occasionally cash crunch. If you are established or wealthy you can ride out the bad times with a credit line from a bank or personal savings. Most of us, however, rely on payments from accounts receivable to support ourselves. Perhaps the most unpleasant task that entrepreneurs face is calling a good account and asking for money. It has taken me years to get comfortable doing this. Here is a formula that has worked well for me. First, get a substantial advance or retainer before you begin work, and enter into a written agreement that stipulates that you expect to be paid within 30 days or some other mutually acceptable time frame. Next, manage your receivables. If they are not paid within the agreed-to time frame, call the account and remind the client of your agreement and that you expect payment within the agreed-to time frame. Such a gentle reminder usually takes care of 80 percent of the problems. If the client is having a problem, the client has to tell you about it and enlist your support. At least you know where you stand and have some idea when you can expect payment. Never be afraid to ask for money – be persistent without being a pest!
- Learning How to Be a Self-Starter – When working for others, life can be very passive. You are expected to come to work at a particular time and generally it is the employer’s responsibility to provide work for you. Entrepreneurs must be both boss and worker. You have to motivate yourself. While you can’t be fired if you work for yourself – your clients certainly can fire you.
- Developing Self-Discipline – Closely akin to the previous point, there is no time clock for entrepreneurs. You stay until the task is done and often you must work weekends and holidays. A great way to develop self-discipline is the simple “To Do” list. Create specific tasks that you know you must complete that day or that week. As new circumstances arise, add these new tasks to the list By the time the week is over, you can see how this self-discipline has resulted in some big-time accomplishments. It’s also valuable for billing purposes since it enables you track your time.
- Tireless networking – Most successful entrepreneurs and corporate rainmakers are tireless networkers. Most enjoy meeting new people and the challenge of developing new relationships. They go to breakfast and lunch with either networking partners or new contacts several times a week. Entrepreneurs constantly strive to help others. They ask probing questions and seek knowledge. They get great satisfaction putting networking partners in touch with other networking partners.
- The Need for Continual Re-Discovery – Entrepreneurs are life-long learners. Many ready voraciously. They continually seek to re-discover themselves and find new ways to work more efficiently and effectively.
- Don’t Get Mad – Get Even – This principle has been attributed to shrewd politicians like the original Mayor Richard J. Daley of Chicago and the Kennedy’s. Entrepreneurship is a tough business. When you have been wronged, don’t react emotionally but through a controlled and thoughtful process of finding the appropriate opportunity for retribution. As an old newspaper colleague once told me – “you pass the same guys on the way down as you do on the way up.”
- Developing Creativity – Creativity is not what most people think it is. When asked to conjure up an image of creatively, one often thinks of the advertising copy writer dreaming up new slogans and jingles. Not so. Creativity is not the ability to write or draw as much as it is the ability to see relationships and apply principles from one area into another area.
- Be Thrifty in Managing Resources – The entrepreneur has to be ever mindful of conserving his/her resources. Even the best entrepreneurs have bleak days, weeks or months. While it’s not necessary to be a miser, wild spending and conspicuous consumption can be dangerous. A good entrepreneur will know at any given time exactly what he/she has in his/her savings and checking accounts, what his/her receivables are and how much gross income can be anticipated in the next 30-60 days. Don’t forget profitability comes from BOTH what you get from increasing the top line and expense savings that enhance the bottom line.
- Creating Marketplace Awareness – The ability to make a sale or close a relationship begins with AWARENESS. People must know who you are, what you do and what you can do for these prospective clients and customers. An entrepreneur must use his own personality as well as network contacts to make the marketplace aware of his/her distinctive competencies.
- Follow-Up, Follow-Up and More Follow-Up – Take absolutely nothing for granted. Make sure that every important letter, FAX and e-mail has been received. Assume nothing! If you make a phone call or write an e-mail and you don’t get a response within a reasonable amount of time. FOLLOW-UP. If you make a proposal for new business and you don’t hear from the prospect, FOLLOW-UP. When you meet somebody new, send a FOLLOW-UP e-mail. If you haven’t heard from an acquaintance or network contact for a long period of time. FOLLOW-UP. FOLLOW-UP is the best way to create and restore top-of-mind awareness. Don’t let people ever forget about you!
- The Ability to Close – If it’s business generation, always ask for the order at the end of the presentation or some other appropriate time. If you are doing a task, complete it; close it out. Too many people take work to near completion and don’t make the last few turns of the screw. Don’t leave any loose ends and don’t let your clients or customers leave any loose ends. When a task is near completion, finish it off and move on to the next one.
While these are a dozen rules that I as an entrepreneur live with, I’m sure there are many others. Please share them with other Wiglaf Journal readers. E-mail me at JBerger@WiglafJournal.com and we’ll publish your comments in future issues of The Wiglaf Journal.