The statistics are sobering: 60% of businesses fail within the first 6 years, and 75% within the first 10. I’ve always been conscious of that statistic, even from day one, knowing that there’s a very fine line between solvent and insolvent; a couple of bad decisions and a few bad hires can ruin even the most promising venture.
Now as Digitcom enters its 25th year in business, I think back to the beginning, when I started the company in the basement of a small office building in 1991, how unprepared I was for the rigours of the business world, and all the things I’ve learned over the last quarter of a century that have helped keep Digitcom in business…and me healthy. So let me share with you a few things I’ve learned along the way:
Tip #1: Take care of yourself first
That’s right. My number one tip to building a sustainable business is to take care of yourself first.
As an entrepreneur one of the most important things you can do for yourself and the success of your business is to build a healthy work/life balance. When I started Digitcom in 1991 I unfortunately didn’t understand what that meant. At the time, and for the first 6 years in business, I worked 75 hours per week; clearly an unsustainable pace. However, I had my epiphany moment when my son was born in 1998, and vowed at that time to better understand how to strike a healthier work/life balance.
Building a healthy work/life balance means keeping yourself healthy, fit, and rested. It’s hard to inspire people for the long term and maintain the necessary energy levels if you aren’t healthy yourself. Maintain yourself and you’ll have what it takes to stay sharp and be constantly on your game.
Tip #2: Be clear on your vision
Most of the problems people have, both in business and in life, stem from the fact that they’re not clear on where they’re looking to go. It would be akin to being told to meet someone at an intersection in a town you’ve never heard of, and just getting in your car and driving aimlessly, trying to find your way. I know it sounds crazy, but the reality is that is how many people, business owners included, often approach their personal life and business operations. If you don’t have short and long term goals, both personally and professionally, it’s very hard to figure out where to go and how to get there. Map it out and plan your course before you start driving.
Tip #3: There’s a fine line between solvent and insolvent
The number one reason companies fail is because of lack of cash. Build your business like you’re saving for retirement, and if you manage to make it past year 1, 2 … with some profits, put the cash aside and save for a rainy day. That cash is your cushion to allow you to grow strategically when new opportunities arise and you need some cash, or conversely, if things are tight your savings will serve as a much better lifeline than bank loans when money might be needed to stay afloat.
Tip #4: Stay focused on the business
It’s so tempting to start another company or force expansion before it’s time. Starting and growing a business is exciting, and after a few years things can get stale. It takes a different kind of attitude to start a business than it does to maintain a business, and it’s important that entrepreneurs understand that. As tempting as the next shiny object is, it’s important that you stay focused on the core business. Having said that, please read tip #5.
Tip #5: If it isn’t right, change course
There’s a delicate balance successful entrepreneurs need to strike between maintaining a consistent vision and knowing when to change course. It can be just as damaging to stick to a business plan when things clearly aren’t going right as it is to not have a plan at all, but the tricky part is that it’s difficult to recognize when it isn’t right. If you’ve been in business for a few years and are barely making ends meet, and things are just not going as planned, you need to have enough self-awareness to recognize that maybe it’s time to change course, before things run aground.
Tip #6: It’s not about you, it’s about the team
Once you make your first hire, it becomes more about how you manage your team. It’s a tough job keeping people inspired, but the trick to building a healthy sustainable business is building a healthy sustainable team and managing that team with vision, passion, and an understanding of where the business is going. It’s not enough that you alone understand the vision; your entire team needs to understand the vision and where you’re looking to go. Share that vision with all team members, let them know what you have planned, how you’re going to get there and how they can be apart of it. Digitcom has annual “State of the Union” meetings where the management team shares the business plans with all staff … we’re all on the same boat and everyone needs to know where we’re going.