How to survive your first five years
In the entrepreneurial community, owners who’ve built their companies from the ground up to achieve success are often the most humble individuals you’ll ever meet.
When you ask about their early days, there is a sense of nostalgia, a combination of painful and happy memories. They look back with a sense of pride and accomplishment that can only be understood by those who have walked the entrepreneurial path.
The first five years my wife and I were building our businesses were probably the most challenging and painful of our lives. The mental and physical strength it took to keep things moving forward and the toll it took on our personal health constituted a labor of love.
One of my favorite business quotes is, “steel is not hardened unless it is hammered.” This best describes the essence of the entrepreneurial journey. During these painful, early years, we developed the most important skills any business owner must master to move forward and build a long-lasting, profitable business.
Early on, we decided to “bootstrap” our restaurant business — we did not bring in any investors or give up any equity. In order to keep our business afloat during those first five years, we had to max out all credit cards, home equity lines of credit and cash out our 401ks. I would not advise anyone to take this path as it nearly bankrupt us and we nearly lost everything in the process.
With some hard work, determination and a desire to get better at our trade (our niche, leadership, marketing, business systems, etc.), we were eventually able to make things work. It was not a pretty ride but thankfully, it all worked out. These early and painful experiences are why most successful business owners seem to be the humblest individuals you will ever meet.
For those embarking on this entrepreneurial journey, here are 8 areas that helped us stay focused and moving in the right direction as we built our company:
1. Educate yourself on your trade. Take the time to gain knowledge of your industry, become an expert in your niche. Don’t generalize, specialize. Go to tradeshows and industry events and become involved with an industry association. This will add tremendous value to you and your company as the business grows.
2. Learn how to lead people. Invest in your personal growth as a leader, how to motivate others, how to hire talent and how to develop talent. You’ll know you are on the right path when your people are willing to go through a wall for you as their leader.
3. Work hard. Nothing will ever be a substitute for hard work. If the work ethic is not there, it’s not going to work, period.
4. Learn the numbers. Become an expert on the numbers and financial ratios that impact your business. If you don’t, it’s like flying an airplane and not knowing what the instrument and gauges in the cockpit mean. It’s just a matter of time until the whole thing crashes. Learn and know your numbers.
5. Know your customers. You will soon realize that not everyone will be a fan of your business — and that’s OK. The goal is to identify who your target market is and who your true fans are so you can cater to them. They are the ones who will keep your business afloat.
6. Build your company values
early on. In our business, teamwork, accountability and kindness are our company values. All decisions are made based on these. Our managers and leaders are constantly being reminded of them and are encouraged to make all decisions based on these principles. They are our guiding star and will always lead to the right things for our customers and each other.
7. Innovate or die. If you’re in the business world, you are either growing or dying. Take the time to look at your company and think of ways you can improve by adding more value to your customer and improving your operational efficiencies. Think about how to grow into the company you want to become. If you are not growing as a person or as a business, you are dying.
8. Take time to think. Most people think that being busy all of the time will translate to results. Sometimes you need to slow down the mind in order to make massive progress. Meditate, get up early and block out time to think. It will be the most productive step you can take to help your business move in the right direction — instead of moving too quickly in the wrong direction.
As you mature in your entrepreneurial journey and all the pieces start to fall into place, and when people see the successful company you were able to build, please remember to be grateful when people call you lucky. Take this as a compliment. You made it look easy. As true entrepreneurs know, luck has nothing to do with it. It’s hard work.
Believe in yourself when nobody else does and utilize discipline to become a student of the game of business. This will get you through those very difficult first five years — The Terrible Five. Make it happen.