9 Things Every Entrepreneur Should Know Before Starting A Business
If anyone knows about the challenges of running her own business, it’s Robin Wilson. A 2008 Make Mine a Million $ Business Awardee, Wilson is the CEO of Robin Wilson Home, an eco-friendly design company that has done projects for the Harlem office of President Bill Clinton, the White House Fellows office, and top international hotels. This fall, she’s launching a line of hypoallergenic bedding made of cotton and recycled polyester; she’ll also introduce eight sets of fashion bedding made of 100 percent organic cotton, along with a line of robes, rugs, towels and shower curtains in basic white.
Even though she’s been immersed in the business world since she was a child growing up in Austin, Texas—she's the fourth generation of a real estate family—she still wasn’t prepared for the hurdles she would face owning her own business.
“The one thing that no one can teach you [is] the two R’s: risk and resilience,” says Wilson, who founded her company in 2000. “In order to become an entrepreneur, you must be willing to take a risk—to throw away the comfort of a regular paycheck—and you must also be a resilient person, to stand firm with your vision in the face of disappointment whether fiscal issues, missed opportunities or challenging personnel issues.”
What other tips does Robin have for business-owners? Here’s a short list of things she wishes she knew when she started out:
1. Learn how to be a CEO
Your role is the ambassador and sometimes the chief bottle-washer of the business, but if you have employees, it means having the backbone to hire the right people—not just people you like or friends—and firing them if they cannot achieve the goals you set for them.
2. Set strategy
Define your goals at the start of a month, quarter and year. And then follow that plan to achieve your vision. Accept input, but always remember that a company suffering from a lack of cohesive vision is like “rowing with fine athletes and then going in a circle,” as a rowing coach once told his coxswain. (Robin overheard this at a regatta, and it always stuck with her.)
3. Do not herd cats
Employees should move your business forward, not make you lose focus—and if they are impeding your strategy due to their own agenda, then they should be warned once and reminded of the company goals. If they cannot do their job or meet their goals, fire them.
4. Get the best bookkeeper/accountant
No matter what, you need someone else to ensure that you are earning enough cash flow to keep your business focused on the bottom line. You should write all checks and understand Profit and Loss statements and cash flow, but have another set of eyes to review and advise you on where your leakage and burn rate is occurring.
5. Define growth
For some companies, “growth” means more revenue; for some early stage companies it may be more Web traffic or PR exposure. Just be sure to define it, because if you don’t, others will define “growth” for you, and may confuse you. Early stage companies should be focused on building brand and exposure, plus revenue. Mid-stage companies should be focused solely on revenue growth. Mature companies should be focused on maintaining market share and new innovations that will drive more revenue and ensure strength when benchmarked against competitors.
6. Define success
For some companies, it is solely about revenue. For others, it's about service and reputation, repeat customers, or marketing brand recognition. Know your definition.
7. Upset the apple cart
There are a lot of people who will come out of the woodwork—relatives, old friends, advisors—who want you to build your firm their way. Listen to them, take the “best practices” from each, say thank you…and move on. Always listen to your inner voice and keep focused on the end vision. Ensure that all advice you take is focused on that “big dream”—and take advice that guides you toward that. You might upset people who want you to do it “their way.” So be it.
8. Limit your debt
“While I was building my firm, everyone used the word leverage, which essentially means build your company on debt/credit and then the money will come,” Robin recalls. “Build your company the old-fashioned way…friends and family investors, revenue, positive cash flow and limited debt. You will be able to sleep better at night.”
9. Limit your fear of failure
Focus on the dream. “I recommend that every entrepreneur read the book, The Dream Giver, by Bruce Wilkinson, which tells the journey of someone with a big dream and lots of barriers. As Michelangelo put it: ‘The great danger for most of us lies in not setting our aim too high and falling short, but in setting our aim too low and achieving our mark…’”
American Express OPEN is the founding sponsor of the Make Mine a Million $ Business program. Meet other motivated women entrepreneurs like Robin at the next M3 event, September 25-26, 2011 in Philadelphia.