Entrepreneurs are a unique breed. For many, success comes from having the moxie to challenge the status quo and take on calculated risks in order to realize greater opportunities. Particularly for those bold enough to embark on a startup venture, it takes vision and guts to put it all on the line in the hopes of turning a great idea into the next big thing.
Dare-to-be-great situations also require precise timing. You have to be ready—confident in both the current marketplace need for your product or service and in the business and economic environment into which you will launch.
According to The Alternative Board (TAB), an international provider of executive peer advisory boards, broad confidence indicators are high. In TAB’s recent Small Business Pulse Survey, 95 percent of business owners reported a positive outlook for 2017, with 85 percent optimistic about the nation’s overall economy.
Other than a receptive business environment, what else will it take to be a standout in 2017? The TAB survey queried hundreds of entrepreneurs to find out how they plan to achieve profitability and success this year.
Some of the key findings are as follows, along with the firsthand perspective of David Wurzer, executive vice president and chief investment officer at Connecticut Innovations. Over the past nearly two decades, Wurzer has provided expert guidance in the areas of operations, finance and strategic planning to scores of business ventures in all stages of development.
Positivity in Leadership
Survey Findings: Forty-seven percent of the business owners surveyed rated positivity as the number-one leadership trait contributing to their success—this above passion (27 percent), personability (26 percent) and decisiveness (23 percent).
Expert View: “Positivity is absolutely vital,” says Wurzer. “For many startups, in a typical week you might have one good day, three challenging days and one day when you’re not sure you’re going to make it. The only way to get through those difficult times is with a fervent conviction that failure is not an option—that’s the type of mindset it takes to power through the setbacks and stay focused on achieving your business aspirations.”
He says, “In a new business venture, you have a lot to get through—raising capital, managing cash flow, attracting and retaining customers, managing personnel—so you need to remain strong and not allow doubts to derail you.”
An effective business leader will also set the tone to motivate and inspire the entire team. As Wurzer explains, “There is an adage in the venture capital world that an A team with a B business plan beats the opposite every time. A major decision point we consider when deciding whether to invest in a new business is the knowledge and experience of the management team.”
Delegation of Responsibilities
Survey Findings: Sixty-seven percent of entrepreneurs reported that the number-one area in which they need to improve is the extent to which they hold others accountable—not surprising, considering that 86 percent work 40-plus hours per week and likely don’t delegate as much as they should.
“Entrepreneurs are often reluctant to delegate because they either don’t have the right people, processes or budget in place or because they simply have a hard time letting go,” says TAB chief marketing officer Jodie Shaw. “But trying to do everything on your own not only will burn you out, it will divert your focus from the kind of planning that’s most essential for long-term business growth.”
Expert View: Does Wurzer agree that there is a pressing need for business leaders to delegate more? Well, that depends. “If you’re talking about a startup, most businesses will, by necessity, run very lean in the beginning—any significant additions to staff should generally be postponed until the business has some appreciable forward momentum and sustainable sources of revenue.”
Reliance on Expert Advisers
Survey Findings: Forty-six percent of business leaders reported that they rely on non-business advisers for guidance on becoming a better leader—more so than they rely on the counsel of their own business partners (41 percent). Indeed, a third-party, objective perspective can be invaluable.
Expert View: Wurzer believes it’s often imperative to have a solid corps of advisers that can bring depth and breadth of experience to the table. He says, “A specific vulnerability that an adviser can help address is the lack of a CFO or other financial person on the team during the company’s early-growth stage.” He explains, “Managing cash flow is crucial. You have to have a constant eye on how long the business can keep going with the cash on hand while also taking steps to ensure that you’re ready to launch the next round of capital raising before it becomes an urgent need.”
“Key advisers who have invested their time and money can not only provide validation to the outside world of investors and prospective customers,” Wurzer explains. “They can also open doors and make connections—because having a great idea is just the start. You then have to sell it.”
He says, “The right advisers can often see problems that are most likely to surface and offer the vision and perspective to help you modify your product, service or approach as needed. It is often helpful to have two distinct advisory groups—one that offers specific technical expertise related to your product or service and a separate group focused on business viability issues.”
VCs can also be indispensable advisers. Wurzer says, “Your VC can become a true partner in the growth of your business—by providing strategic advice and resources, introductions to valuable partners, marketing and public relations support, help with board and employee recruitment and even leadership mentoring.”
Survey Findings: For 76 percent of the entrepreneurs queried in the TAB survey, preparing for more success in the new year will mean strategic planning, with the primary intentions of improving sales revenue growth (50 percent) and profitability (44 percent). For those with strategic plans, the majority (85 percent) intend to review and adjust their strategy quarterly or annually. As for the 24 percent without strategic plans, it’s not that they don’t see the value in them, it’s just that they consider themselves to be too busy (54 percent).
Expert View: Successful businesses are without exception created for a very specific and compelling purpose—the more compelling the purpose, the greater the success. Wurzer says, “As basic as it might sound, a startup must provide a real solution to a real problem versus just offering a unique technology—that core premise is the foundation of a viable business strategy.”
He says, “If your product or service doesn’t fulfill an essential need, you need to go back to the drawing board.” He adds, “You should take time to consider whether your business concept lends itself to market leadership in some meaningful way—whether it’s technological supremacy, a revolutionary process or approach, a proprietary product or service, or another tangible value proposition.”
Wurzer says, “The strategic focus of most startups is hitting crucial milestones on time, on target and on budget so they can then attract the next level of capital investment at an improved valuation.”
Another realm where strategy is vital is in hiring and workforce management. You do want to guard against overstaffing too early on in the venture, but you also want to be sure you have all your bases covered by having the right people serving in the right roles. Wurzer says, “If the team is strong enough, even if the business strategy misses the mark on some level, they will retrench and find the answer.”
He adds, “The only thing I’m sure about in this dynamic world is that no matter how well your plan is crafted, circumstances will almost invariably be changed by one or more external factors. But a tenacious leader backed by a talented and resourceful team can rise to the occasion, adjust course and keep the momentum going.”
The life of an entrepreneur has high risks and high rewards—particularly when you step into the fray as a startup. The challenge can be downright daunting, but with a great idea supported by the right focus, timing, team and strategy, success can be well within reach.
Original Article from Connecticut Innovations. Read it Here >>