Small business is big in Detroit. Our city has the fourth largest number of minority businesses of any city in the US and many more are slated to open soon. Many of them are smaller, entrepreneurial endeavors with terrific ideas.
However, there are clouds on the horizon. Nearly 80% of start-ups fail within 18 months, according to a 2013 Bloomberg report. Lack of capital, customers and technological support certainly contributes to their demise, but the bottom line is, they didn’t have well-thought-out plan.
I recently talked Crystal Arredondo, chair of the National Association of Women’s Business Owners (NAWBO) and a partner with Dallas-based, MPACT Financial Group to get her thoughts about how to build a successful business. NAWBO represents a collective voice of 9.2 million women business owners.
During her day job, Arredondo runs a financial planning firm that manages investments for high-net-worth individuals. She also frequently travels the country to visit local NAWBO chapters. Detroit is one of 60 across the country.
In her travels, she is often asked a simple question, “What is the best advice you have for business owners?”
Here are her 10 tips on what it takes to turn that 80% failure rate into higher levels of success.
1: Have passion for what you do. It will get you through the rough spots if you have a purpose. Or run like hell! Don’t do it.
Different businesses require different types of people to run them well. The kind of personality, entrepreneurial spirit and temperament needed to run a restaurant, for example, is different from construction, is different from radio, is different from financial planning. That’s important. We all touch lives through our businesses. Have passion for what you do. Or run like hell! Don’t do it.
2. Don’t be a know it all.
“Don’t be a know it all”. Know what you don’t know. Find the answers, ask for advice then make your decision. It’s much better to come across as someone who “knows it all” than a “know it all.”
3. It’s not about how they feel when they walk in the door. It’s about how they feel when they walk out.
If you keep this in mind every time you deliver an experience to your customer, you will be leaps and bounds ahead of your competition. It’s not about how they feel when they walk in the door. It’s about how they feel when they walk out.
4. If you are the most valuable part of your business, your business has no value.
In service-based businesses often the owner practically is the business. There’s nothing wrong with that and I’ve seen these be very lucrative businesses. Just be aware of it and take the profits along the way because that’s what you’re going to retire on.
Stay hungry and adopt the mindset that you are one month away from going out of business. Don’t lose sight of it no matter how successful you become. It lights a fire under you and will keep you motivated to grow your business and do well for your clients.
5. Don’t put pressure on people, put pressure on the process.
If your business has gone through growing pains, you’ll know exactly what this means. You grew your revenues, but your processes probably didn’t keep up. Now all of a sudden you see the inefficiencies of your company as if they are on a jumbo tron. Things are falling through the cracks and you must stop and address them.
It’s not your people who didn’t keep up. You need to build robust processes and then continue to refine them as you grow. Don’t put pressure on people, put pressure on the process.
6. No clue, no problem. Don’t prevent yourself from having a goal just because you have no idea how to make it happen. The path will reveal itself along the way.
Imagine driving on a deserted road at night and all you have are your headlights to guide you. You can see only see the road 100 feet in front of you at any point in time. That means the road unfolds in 100-foot increments until you finally get to where you’re trying to go.
Don’t stop yourself before you even start. You have to take the first step to get to the second one and then the third. Trust and be open to opportunities as they present themselves. They have a way of showing up at the right time.
7. Be brave enough to admit what you don’t like doing or are not good at doing and hire people who love performing those tasks.
Entrepreneurs love doing things, but sometimes it’s not the right things. They don’t have any problem staying busy, but don’t busy yourself to broke. Hire people and make sure they are good people.
8. Time kills deals.
This usually stems from fear of making the wrong choice. In business, opportunities tend to have a short shelf life. Watch an episode of Shark Tank if you don’t believe this. There’s no shortage of decisions to make when running a business. Remember time kills deals.
9. Borrow money when you don’t need it.
Like people, a business has to build up its credit worthiness. You can have great credit, but what about your business? Has it proved it’s a good credit risk? Borrow money when you don’t need it, pay it back and borrow it again. Keep doing this because when you actually need the money, it will be there. If you only try to borrow money when you need it, you’re going about it the wrong way.
10. No does not mean never.
Business is a marathon, not a sprint. You can’t be afraid of the word “no”. If someone doesn’t do business with you today, it doesn’t mean they never will. Keep trying.
Many times, small business owners spend time thinking “in the business” versus thinking “about the business.” In other words, they’re bogged down in the operational, daily details versus actually thinking about the business, making short- and long-term plans and stick to them. By following Arredondo’s advice and developing an effective, sustainable plan your business will grow and you won’t be part of the 80 percent.
— Mark Lee hosts Small Talk with Mark S. Lee on WXYT 1270 Sundays 8:00 am – 9:00 am.
Editor’s Note: The LEE Group will hold its annual 2016 Small Business Workshop as part of Detroit Entrepreneur Week (DEW) on Tuesday, May 3, 2016, at TechTown, located at 440 Burroughs, located in Detroit’s Midtown-area. With business experts, panelists and workshop sessions, attendees will receive practical advice focused on key components to build and sustain a successful business. For more information visit: leegroupinnovation.com