It's well-known that around 50% of new businesses will close within the first five years. However, there is hope. A recent study by two economists from Stanford and the University of Michigan found that failed entrepreneurs are much more likely to be successful their second time around. In short, wannabe entrepreneurs can learn a thing or two from their already successful counterparts.
We tracked down successful entrepreneurs and asked them their number one tip for ensuring success.
Have a servant’s attitude
Vladimir Gendelman, the founder of Company Folders, hit the nail on the head with this tip: “To succeed in business, you must have a servant's attitude. Most business owners think, 'Finally, I'm my own boss!' They relish the idea of being in charge. But that idea is false. In a normal job, you have one boss, but as a business owner, everyone is your boss: customers, vendors, even your employees. When you have a servant's attitude, you recognize that it's your job to make those three groups happy,” he says.
Stick to the business plan
Many new business owners underestimate the power of a business plan. Nicholas Kensington, Scottsdale Real Estate Agent, shares “I think so often so many of us think we don't need a business plan, or that it might be a waste of time. It's not. Writing up the business plan, and making sure to get rid of anything vague was so helpful. Hammering this down to be as specific as possible with what I would do next helped me greatly.” (Also read, How to Write a Business Plan.)
Provide value to others
Being passionate about your business is important if you want to make it long-term. In addition to passion, you also have to “identify something that provides value to others,” according to founder and CEO of Hush Hush Little Baby Newborn Care, Haleigh Almquist.
Be better than your competition
Almquist says another tip for success is outing your competition: “Respond to clients faster, work longer hours and take smaller profit margins." To be in business long-term, you have to make sacrifices upfront.
Hire someone to do the easy tasks
We love Allen Walton’s tip from Spy Guy Security: “Hire someone to do the $10 per hour tasks so you can do the $100 per hour tasks. I can't stress this enough and am totally guilty of doing this. I try to 'save money' by doing the small tasks that practically any untrained person can do – like going to the post office or packing orders, but I should be doing the stuff that doubles my business revenue and increases profitability,” says Walton.
Network like crazy
Almost every single entrepreneur we spoke with mentioned the value of networking. You can’t have a business without customers, so get out there and meet as many people as you can. Dr. Jeanett Tapia of Intouch Chiropractic went door-to-door meeting people in the neighborhood before opening. “By the time we opened our doors, we had 25 new patient appointments due to those long hours of getting to know our neighbors and other business owners. It paid off!” she exclaims.
Be generous with your employees
Your employees are the face of your business. Treat them fairly, and your company will reap the benefits. Curtis Boyd, the founder of Future Solutions Media, says, “It's important to maintain an image of authority and generosity. You want to be the boss who rewards employees on good hard work. People will work harder for you and your business will be more successful.”
Set up a tax account from day one
Don’t let taxes be what sinks your business. Rebecca West, an interior designer and author of upcoming book Happy Starts at Home, shares her advice. “From day one, set up a tax account (it’s straightforward, just set up two checking accounts at your bank) and put at least 10% of every single check you get into that account. One of the big things that sink a new business is not having the cash to cover those taxes at the end of the year,” she says.
Take care of your physical health
Surprisingly, many entrepreneurs mentioned how to be successful in the professional world, you have to take care of your physical health. Get exercise every day, meditate and eat healthy foods. Tasha Mayberry of Best in Baby Bizshares a few tips on healthy living: Drink two full glasses of water in the morning and always eat a healthy, clean breakfast. “By doing these things, I am laser focused all day long,” she shares.
Test your idea before launching it
You may think you have a great idea – but do other people? Many of the entrepreneurs we spoke with said you should always test your idea or product before going “all in.” Make sure you get a few second opinions on your business and have people that are interested in what you’re doing. For example, Travis Bennett, Managing Director of Studio Digita, freelanced and developed a steady stream of clients before launching his agency. The more you can test your business, the better chances you have of success.
The Bottom Line
To ensure success as an entrepreneur, learn as much as you can from other, successful entrepreneurs, test your product or idea before launching it, and never give up. Passion coupled with hard work and determination will lead to a successful business.