According to a report conducted by the Harvard Business School, first-time entrepreneurs have only an 18 percent chance of succeeding. 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 know before they open up shop.
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 in to 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.
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.
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. If something goes wrong, they need to do something about it. If their number one client leaves, they need to cold call and door knock to compensate for the lost business.
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.