Six Lessons of Successful Entrepreneurship
Running a business is an encounter with forces far more powerful than yourself. I’ve learned this lesson the hard way since I started out 26 years ago. I’d like to present some of the pitfalls and triumphs we’ve encountered as entrepreneurs.
Lesson #1. Discover who you are.
A common pitfall of many entrepreneurs is to equate making a lot of money with the desire for freedom, independence and self-realization.
Recently, at the supermarket, I encountered someone I met when I was first starting out. After he marveled that I had survived all these years, he remarked, “You must be really rich.” When I told him I wasn’t, at least not by his Wharton School standards, he became almost contemptuous. “The only reason to be in business for yourself is to make lots and lots of money,” he said.
We all want to make lots and lots of money. But what makes an entrepreneur successful—at least someone who prevails—is not just a desire to make a lot of money. We want control over our lives. We want to do what we want and love to do. We want to turn ourselves into a business that is a reflection of our own interests, talents, expertise, contacts and values. This is what keeps us going.
Lesson #2. Listen to what the market is telling you.
When we do what we love, money does not necessarily follow. While having a passion in what we do is crucial in our success, it is not enough unless we listen to what the market is telling us.
When I started out on my own, I made it my personal passion to help pull China and America closer. My passion gave me the focus and the drive to help more than 100 companies do business in Asia.
In 1989, when the Chinese leaders opened fire on college students who wanted democracy and freedom, my business took a hit. America decided not to do business with China. My personal passion became irrelevant in face of geopolitical events over which I had no control. I had to do something else to survive.
#3. Selling must be like breathing.
To succeed on your own, you must learn how to sell. But a common pitfall for most entrepreneurs is the inability to make the distinction between “selling yourself” and “selling your service or product.”
It’s easier to sell a product than it is to sell your own services. Telling people how good you are feels immodest, even aggressive. And it’s easy to communicate discomfort to those you’re trying to convince. Yet you have no choice but to learn to sell.
In the beginning, we might sell just a little too aggressively. Our eyes are open a bit too wide, our voices are strident, our faces stiff. We are too self-conscious about selling ourselves.
It’s important to remember that you’re not truly selling yourself, but rather the help you can offer, the solutions you can provide. In a way, it’s just as if you’re selling face creams or mousetraps. What you have to offer is something you know will do the job. The product you’re selling is not who you truly are, but rather the job you can do.
Separating yourself from the service or product you offer makes it easier to accept rejection. If people don’t buy, it’s not because you’re a bad person. Rather, it’s because they don’t think they need what you are offering. If you were a better salesperson, you might have convinced them otherwise. But just because you didn’t doesn’t mean you’re a less worthy person. Once you understand that, you can relax while you’re selling, which will probably make you more effective.
#4. Charge enough to live.
When I started my business seventeen years ago, I bought a book that offered a formula on pricing. It said that you should set your hourly rate at a level that would give you a reasonable living if you are able to sell about one third of your available hours. Another third of your time should be allocated to finding new business. The last third is taken up with such activities as bookkeeping, walking to the post office, gnashing your teeth and checking your email. I found this very useful advice because I was able to make it work. It helped me keep in mind how much time I need to spend promoting.
There are other formulas that apply to retailing, manufacturing or other sorts of services, and most of them are helpful both because they stress how much of an entrepreneur’s time is spent doing apparently nonproductive work, and because they offer a discipline that many who are new to business sorely need.
None of these formulas work, however, if you don’t offer what buyers want at the rates you need to charge to stay in business. All too often, beginners think that they can undercharge in order to get business. This seems like a logical tactic, but it’s the road to ruin. It costs money and may make it difficult to sustain your business. It can lead some customers to wonder whether you really know what you’re doing. And it can distract you from the more difficult, but perhaps more rewarding, task of finding something you can offer at a price that gives you a good income.
#5. Confidence is money.
There is no greater asset for an entrepreneur than an absolute conviction that you know what you’re doing. If you don’t feel sure of yourself, why should anyone else trust you?
This is obvious. But for most of us, confidence is something that comes and goes. What’s more, it often vanishes unexpectedly, just when you need it most. When I feel confident, everything seems to work better. When I feel insecure, nothing goes right. I become self-conscious. I begin to doubt my own abilities, and mistrust other people as well.
While confidence is useful for everyone, it is particularly vital when you are in business for yourself. When you work for a company, your very position gives you a sense of legitimacy. We spare room tycoons stand on our own, and we mustn’t be seen to be quivering in our high heels or wing tips. We demand to be taken seriously. Everything about us should inspire trust.
Everyone has moments of insecurity. Indeed, many of the stories in my book, Spare Room Tycoon, relate the impact of self-doubt on the lives of independent business people. Confidence is a quality that comes and goes, but it is also a discipline that can be learned. And if you can succeed in learning confidence, you will not simply be happier and healthier, but wealthier besides.
#6. Seek a sane balance between work and life.
Finding the proper balance between work and life is something with which all independent business persons must grapple. Some believe in drawing a clear line between the two, but that’s easier said than done. Not many of us can simply ignore a ringing telephone. It could be the next big opportunity. It could be a family emergency. We answer the phone and are often derailed from what we planned to be doing. To be able to ignore a ringing telephone is, I have concluded, the beginning of sanity.
Rocky Condino was 25 when he started his heating and air conditioning business in 1979, and he was determined to succeed. His day began at 7 am, and most nights it would be about 11 p.m. before he got back home. He barely had time to say hello to his wife. He was oblivious to their two babies.
Throughout the 1980s, sales increased at least 10 percent each year, and as much as 20 percent in a few of the best years. Because Rocky now had a dozen or more employees, he was now taking personnel problems to bed with him. In addition to working 16 hours a day during the week, he also put in 12 hours on Saturday and 4 on Sunday, his easy day.
Although he felt stress, he says, “The work always came.” The business was growing in a way that fulfilled his expectations. He had nine trucks. His employees wore spotless uniforms and gloves, and were trained always to wipe their feet before they entered customers’ homes.
At night, though, it was a different story. His sleep was troubled by acid reflux, which his doctor told him was caused, in large part, by anxiety. Several times he awoke in panic, fearing that he might choke to death. “Don’t let the business kill you,” his doctor told him.
After such a litany of pitfalls, you might ask, where are the triumphs? Well the fact is that there are more pitfalls in life than their are triumphs—and sometimes even apparent triumphs turn into pitfalls. Really, there is no such thing as a final victory when you are in business for yourself. Each day brings new challenges.
The real triumph comes when you withstand these challenges day in day out while doing something that you enjoy and that feels meaningful to you. Success for spare room tycoons lies in the ability to be ourselves, to grow as people as well as businesses, in undertakings that nourish our souls as well as our bodies.