Entrepreneurs have an intoxicating and contagious attitude, full of energy, enthusiasm and inspiration. Where one sees a desert, an entrepreneur envisions a city, viewing things not as they are, but as they could be. They live and breathe their company and work unbelievably hard to be successful.
Sadly enough, research shows that only 35% of small business in the United States will survive for five years. Unfortunately, the reality of entrepreneurship is failure – not success. But ask any entrepreneur about their personal odds of success?
They don’t think this statistic applies to them. The fact is, many entrepreneurs lose perspective, and this increases the risk of failure.
Over the last twenty years, I have been very fortunate to work with entrepreneurs. I have witnessed first hand the consequences of failure on the business and the family.
Below are three recommendations to help preserve what you worked so hard to earn.
1. Don’t forget your struggle. Struggle is generally something successful entrepreneurs wish to leave in the rear view mirror. I think this is a big mistake. Struggle produces focus, and focus encourages us to think properly. It helps us identify what really matters then demands we concentrate on it. No one feeds cash to bad ideas or wastes weeks at a time when you don’t have either. Once entrepreneurs become successful, money mutes the pain of failure.
Money extends the financial runway and gives the illusion that the idea can taxi longer than it should. Partial success is worse than failure because it creates the feeling that just a bit more effort, a bit more time and a bit more money will help. If we forget the struggle and operate like we have unlimited resources, we increase the likelihood of failure. Impose a process with limits of time, money and resources to keep the struggle mindset alive.
2. Learn the importance of “No”. When success happens and there is money in the bank, the world is at your fingertips. You can do anything you want whenever you want. You instantly become the everyone’s best friend. Other entrepreneurs will pitch great investment ideas, banks encourage you to borrow money, charitable foundations will offer you a seat on their board, and distant relatives suddenly reconnect on Facebook. They all want what you have: cash.
Every idea is presented with passion and the entrepreneurial problems solving skills go into high speed. Saying no is painful, saying yes is easy. We want to help. Remind yourself that most ideas end up in the graveyard and you don’t want to buy the gravestone. Just remember opportunities are like busses, there’s always another one coming around the corner. My personal metric. Say no 99 times for every yes.
3. Find a Board of Advisers. Our perception of reality is more like a painting than a photograph, sort of like the difference between a Van Gogh landscape and a photograph of the same landscape. The reality we think we see is a combination of our mind’s interpretation and fact.
Our brains are so good at creating this landscape that it is hard to spot when it is a fake. This is especially problematic for the entrepreneur with business, family, and employees at risk. To protect yourself from the cavalier, the impetuous and the sane (which is really an insane idea), assemble a team of advisors you respect.For instance, my support network includes clients, consultants, fellow entrepreneurs and even some of my competitors. Most are surprised by the number of people I have helping me to see reality. Other people see my problems with a clarity I just can’t. Clarity is something the entrepreneur can’t afford to live without.
Following these guidelines will not be easy and will take a great deal of discipline, commitment and determination, but they will give you a fighting chance in an uncertain world.
Russell Holcombe is CEO of Atlanta-based investment firm Holcombe Financial and author of the award-winning book You Should Only Have to Get Rich Once. Holcombe earned his MTX (Masters in Taxation) from Georgia State University, his BBA in Finance from Southern Methodist University, and is a CERTIFIED FINANCIAL PLANNER™.