Jump! It's only 5,000 feet down.
Starting a business is a lot like parachuting; from afar, it looks fun and exciting, but when you are standing in the open airplane doorway 5,000 feet above the ground, it's a different story. It's easy for the pilot to tell you to jump; he'll still be in the plane as you plunge toward the earth's surface. Taking the leap of faith to start a business is just as intimidating and rightly so because no matter how great your idea, you are betting against the odds.
80% of all businesses will fail within three years.
So, go ahead and jump!
I made the decision over 30 years ago to jump, and my life has been filled with plenty of satisfaction and economic reward. I had the courage to embrace the risk of entrepreneurship rather than accept the security of a corporate career.
I know many of you have a burning desire to jump, also. There is an idea, a concept, or a market need in which you have conceived a logical and unique solution. The marketplace is ripe for your solution, and you are ready to set out on your own to seek your entrepreneurial nirvana.
But before you take the entrepreneurial leap of faith, here are some steps to follow if you want to build and run a sustainable, profitable business.
Be the Pig
Are you a chicken or a pig? Think about your business ventures like a bacon and egg breakfast; the chicken is involved, but the pig is committed
. It's given literally everything to the cause.
Following your entrepreneurial dream by giving everything you have is like being the pig; you have to be fully committed. An entrepreneur's commitment is personal; it includes an investment of money, time, and loss of opportunity from foregoing other opportunities. Once you decide to jump, if you want any chance for success, you need to go all in just like the pig.
Finance the Dream
Giving up your hard-earned money is the ultimate risk. To pour your life savings into an entrepreneurial pursuit is like walking the tightrope without the benefit of a safety net; it takes courage.
Money buys resources, technology, and manpower—all critical elements in helping a new business succeed.
If all capital investment is from your coffers and not from outside sources, then you are committed. Of course, you might have to find a source for additional financial support which means either giving up a piece of your dream in the form of a partnership or taking on debt responsibility.
Building a successful business when money is tight is an accomplishment. The committed entrepreneur doesn't allow a tight money situation to stop her. True entrepreneurial spirit promotes self-reliance and the willingness to find the money.
Sacrifice Your Most Precious Possession: Time
When you pursue a new enterprise, one resource that cannot be reimbursed, borrowed, or saved in an account for later use is time. Time is the most perishable resource of all. Time is finite; it's more precious than money and more costly to waste.
How you invest your time is a test of your resourcefulness. Where is the best use of one's time? How much time must you invest?
Too little means less than a full effort. If there is too much time, other life segments suffer. The good news is: eventually you will learn to navigate these challenges.
Don't Be a Non-Decider
In business, you need to decide over and over again. The first decision you make is to jump in and pursue an entrepreneurial dream, but decisions don't end there. Every time you make a decision, there's a risk. These are risks of failure, not being accepted, and making wrong choices. Don't let them stop you.
Change or Die
Businesses are like sharks; they have to keep moving or they will die. The rule is simple: businesses must progress, and progress requires change. In the business world, fear of change is the biggest obstacle businesses need to overcome to meet the evolving, marketplace challenges.
What makes embracing change even more difficult is that a business must be willing to change internally and externally—simultaneously—to keep progressing and remain competitive.
An internal change can be organizational; there are changes in personnel, management, department, and staff reorganizations. Internal change also refers to processes or systems, changes in attitude, and the business personality. While these three characteristics can and do change independently, they also can be linked—thus resulting in a dramatic transformation.
External change is always customer-facing; it's most noticeable to your customers and competition. Innovation (an external change) brings a new, competitive edge to your business. Innovation introduces products and services that increase the value of a customer's experience with your organization and is announced in the marketplace through branding and marketing.
Forget the "If I Had . . ." Excuse
Some entrepreneurs are like little boys standing with their noses pressed to the candy store window—hoping and thinking, "If I had a couple pennies, I could buy some candy, and everything would be great."
Sub in new technology, a bigger store, and a larger advertising budget for those two pennies and you get excuses made by struggling entrepreneurs everywhere.
Entrepreneurs must be self-reliant. You must get comfortable looking to yourself—not other people or objects—as the solution.
Expect to Fail
To master the skill of learning to be a successful business leader, you must first embrace the risk of failure and expect to fail. You have to be resilient to the pain and embarrassment of failing and keep pushing ahead. What the entrepreneur must realize is a failure is not defeat but a signal that a change is necessary.
Spend Money on Marketing
Marketing is key to building a successful business, but it is also something that many entrepreneurs are loath to spend their money on. Instead, they offer these handy excuses: "I tried it once, and didn't get any response, so I stopped," or "There's no money for marketing this quarter. Maybe I'll try something next quarter."
There's no doubt that it is hard to know what consumers think and what their day-to-day needs are, but a business void of a long-term, consistent marketing effort is doomed.
Accepting marketing risk also means recognizing that some degree of failure is both inherent and necessary to find your right path. You must realize that your marketing message is going to be received by some who are not ready to buy. Therefore, you must commit to a consistent, ongoing strategy to ensure your message gets in front of prospects when they are ready to buy.
You can't accomplish this strategy by sending a single message and hoping prospects remember you and then respond months later.
Get Up Close & Personal with Customers
Shortsighted business leaders assume customers have unreasonable expectations or their demands will increase once you open the door of a relationship. After all, what if you start talking to them and they start wanting better pricing, extended credit, or other special considerations?
The truth is: customers require consistent care and investment. You must risk investing in the necessary resources to draw your customers closer. You start by understanding the customers' experience, and then continue maintaining a consistent line of communication throughout your relationship.
Sure, for small business, money is tight, but the simplest solutions are just as effective as grand gestures. A short thank-you note after a customer places an order, whether it is done via email or by sending a handwritten thank-you card by mail, is an easy way to start building personal relationships with your customers.
Send birthday cards or holiday cards. Call them with information or updates on products they've purchased or asked about in the past.
To a small business owner who has a small number of customers, losing just one customer has a significant impact on organizational health. If you lose a customer due to price or other circumstances beyond your control, then fine. However, losing a customer because they felt unappreciated or underserved is inexcusable. This type of customer loss indicates serious flaws in your internal business processes that lead to additional losses.
The easiest way to avoid customer churn is by continually reaching out and communicating. The sales process never ceases.
The road to entrepreneurial success is not an easy one. You can't simply take the stairs to a successful business. To be a successful entrepreneur, you have to recognize taking advantage of opportunities—big and small—means embracing the risks that come with them. Then, you have to be willing to embrace those risks day in and day out. Keep that parachute handy.
Tom Panaggio has enjoyed a 30-year entrepreneurial career as co-founder of two successful, direct marketing companies—Direct Mail Express and Response Mail Express. He is the author of The Risk Advantage: Embracing the Entrepreneur's Unexpected Edge.