According to the Small Business Association, more than 50 percent of new businesses fail within the first five years. Why? Because many entrepreneurs today are naïve to the struggles and triumphs that accompany owning their own business. They underestimate the amount of time, energy, devotion and care it takes to develop a meaningful, successful organization.
Here’s what entrepreneurs need to keep in mind both before opening shop, and in the first phase of operation -- so they can stay afloat and beat the overwhelming odds:
No. 1: Pinch pennies
This seems obvious, but frugality is essential for entrepreneurs. The biggest area people spend foolishly on is technology. People buy huge servers for potential, yet technology changes so fast, that they bought too much, too soon and could have grown into it. Companies can also save money when investing in an executive team. Entrepreneurs forget that they don't need to build the executive team of a $100 million company when they’re just starting out. The people they hire to start and build the company probably won't be the same ones they’ll need when they achieve certain milestones.
No. 2: Go all in
Entrepreneurs need to be able to commit to working 60, 70, 80 hours a week, to being on call all the time and to taking a substantial pay cut (hopefully only initially). They need to be able to put their business first and themselves second.
No. 3: Be resilient
Building a business is like having a child. You love your child unconditionally and are proud of all their accomplishments, but you know along the way there will be hardships. You don’t stop loving your child because of their mistakes or faults, instead you help them to grow and support them no matter what. This is how entrepreneurs should run a business.
No. 4: Talk to successful people
To succeed, surround yourself with people you trust and who are smarter than you.
No. 5: Build and leverage relationships
When an entrepreneur is just starting out, everyone should know about it: family, friends, former colleagues and acquaintances. Everyone is a potential investor or client. At the same time, entrepreneurs need to develop new relationships. They need to be transparent and honest with prospects, recognize the big events in their lives and show appreciation for their time and consideration.
No. 6: Create the culture
A company's culture must be implemented from day one, communicated daily and instilled in each new hire. Culture is difficult, if not impossible to change. A unique culture is founded on strong values and maintained by a dedicated team.
No. 7: People make the difference
Expand your team with people who share similar values and beliefs, those who are passionate and dedicated and all around good people. They will help grow the business and increase client satisfaction.
Tom Gimbel is the Founder and CEO of LaSalle Network, a $35+ million staffing and recruiting firm based in Chicago. Founded in 1998, LaSalle has served thousands of clients and candidates, placing job seekers in temporary, temporary-to-permanent and permanent positions.