If you want to be a business-building genius — or just make a ton of money this year — learn these five proven (and absolutely true in my experience) habits of highly successful entrepreneurs.
1. Don’t spend too much time planning. Based on interviews with the founders of 100 businesses on Inc. magazine’s list of the “fastest-growing” companies, fully two-thirds of those who succeeded did little or no planning beforehand. If you’ve ever started a new business or product, you may know why. When you are entering a market with a new product, you don’t know (and couldn’t possibly understand) the hidden problems and challenges you will face. You won’t understand those problems until you make a few mistakes. And you won’t solve them (and go on to making a success of your new business) unless you are capable of changing directions quickly. Most successful new businesses (probably 90 percent of them) end up following practices that are different than anticipated. That’s why it doesn’t pay to spend too much time and money planning. Do a reasonable amount of noodling. Figure out the big strokes and give yourself a bail-out option. Then go for it. He who can adapt wins.
2. Don’t spend too much money. The vast majority of businesses that succeed do so on a limited budget. According to an article on entrepreneurship called “Bootstrap Finance” in the Harvard Business Review, less than a quarter of 1 percent of successful American business start-ups have the benefit of venture-capital funding. The great majority of new businesses are hampered (and enhanced) by flying on empty. People involved in businesses that have limited funds must think harder, work harder, and (most importantly) sell harder. Their primary initial effort is to bring in the cash. And that’s how it should be. There is only one thing that will surely stop any business in its tracks — and that’s a lack of money. Ironically, limited capital usually means a quicker and stronger cash flow.
3. Get operational fast. The most common reason for new product/project failures is wasting time getting ready. Between making overlong and expensive business plans, endlessly tinkering with the product, fooling around with focus groups, and second-guessing yourself, it’s very easy to let a good product/project lose its steam. Bootstrappers don’t mind starting with a copycat idea targeted to a small market. Imitation saves the cost of market research — and the start-up entering a small market is unlikely to face competition from large, established companies.
4. Go for the quick cash first. Contrary to what some business books tell you, successful entrepreneurs admit that they take the fastest route to cash when launching a new venture. They do so because they don’t have a choice. (See Secret #2.) After the cash starts coming in, they have the time and funds to improve the product, enhance customer service, and refine operations. Keep in mind that the best-laid plans are often arrogant. You don’t know for sure how to best serve the market. When launching a new business or product, figure out how you can get to breakeven fastest. This kind of noodling will force you to pay closer attention to the market.
5. Forget about the crack team; you are it. Successful entrepreneurs don’t hire experts to run their businesses. They figure it out for themselves. When it comes to making your new product/project work, rely on nobody but yourself to make sure it gets done right. It may be stressful and time-consuming to do a lot of extra work yourself, but it will pay in the long run. You will understand the project in an intimate, extremely valuable way.[Ed. Note. Mark Morgan Ford was the creator of Early To Rise. In 2011, Mark retired from ETR and now writes the Palm Beach Letter. His advice, in our opinion, continues to get better and better with every essay, particularly in the controversial ones we have shared today. We encourage you to read everything you can that has been written by Mark.]