The key to entrepreneurial success isn't just spotting the hot business opportunity, it's developing the discipline and stamina to stay focused on it.
To be a successful entrepreneur, you don't need to be a genius at spotting great business opportunities. What you do need is a capacity for discipline and focus
An old friend dropped by my records-storage business recently. He hadn't been there for several years. As he looked around at the thousands of boxes in the warehouse, he could hardly believe his eyes.
"This is incredible," he said. "You saw an opportunity, and overnight you've turned it into a successful business. It's amazing!"
He should only know, I thought.
The truth is that I've spent more than nine years building my storage business, but most people would rather not hear about that. They think that successful entrepreneurs have a magical touch. All they need is the right opportunity and--presto!--it becomes a business.
That's one of the great myths of entrepreneurship, and it gets many would-be entrepreneurs into trouble. Why? Because they waste time and money chasing after business opportunities, hoping to identify one that will guarantee success.
Listen, the world is filled with great business opportunities, and none of them guarantees success. Spotting them is the easy part. What's difficult--and essential--is developing the discipline and the stamina to stay focused on a single opportunity until you've turned it into an established business that can stand on its own.
There are two phases of the entrepreneurial process in which focus is critical and too many opportunities can be a big distraction, maybe even a fatal one.
The first phase begins right when you're getting ready to take the plunge. A lot of people find they can't do it. They're mesmerized by all the opportunities they see. I'm constantly hearing from readers who are considering 10 different business ideas at the same time. They want to know which one I think is the most promising. I tell them, "You're asking the wrong question. You should be asking, 'Which business do I like most? Which one fits in best with what I want to do with my life?' "
If you're serious about having your own business, you need to begin by selecting a single idea that, for whatever reason, strikes you as more appealing than the others. Then you need to research it thoroughly. If you can arrange to spend time working in the industry, so much the better. But you should at least find out everything you can about the current players in the industry and how the business really works. That includes getting information from trade associations, talking to people in related businesses, and interviewing customers.
Bear in mind that you're preparing for a long-term commitment. I usually tell people they should plan to give the business their full attention for at least five years. Not that you should neglect the rest of your life, but at work you need to be totally dedicated to the path you've chosen until the company is firmly established, and that takes a long time.
So it's important to determine not only whether you're going to enjoy the business but whether it's a viable enterprise for you. Do you have the resources and skills you need to be successful in that particular business? Is it reasonable to think that the business will get you where you want to go? You'll find it very hard to answer those questions unless you're focusing on one specific opportunity and pushing the others out of your mind.
The bigger challenge comes in the next phase, after you've made the commitment and begun to build your new venture. You'll soon discover there are more opportunities around than you ever imagined--both inside and outside your business. You'll find them very tempting. If you're not careful, you'll lose your focus and, with it, your best shot at success.
There is only one opportunity you should be thinking about during the start-up of any business. I'm talking about the opportunity to build a customer base that will make the business viable--that is, able to sustain itself on its own internally generated cash flow. First, you have to figure out what kind of customers will give you such a base and how you can draw them in. Thereafter you need to focus relentlessly on building the base.
That's not easy. It takes a lot of discipline, which doesn't come naturally to most people. My friend Bobby Stone is a case in point. (See " The First Salesperson," December 1998, and " How to Succeed in Business in Four Easy Steps," July 1995.) We figured out early on that he and his wife, Helene, needed a base of repeat high-margin customers for their computer-supply business, Data-Link Associates. Such customers often don't place large orders, but they're very reliable. They don't require much maintenance. They pay their bills on time. They keep coming back.
In the early days, the company's survival depended on signing up as many of them as possible before Bobby and Helene could run through their start-up capital. Bobby, however, had a hard time staying focused on the task at hand. Opportunities were always cropping up. He kept seeing chances to make big onetime sales at low margins. He had ideas about selling unrelated products he thought would "complement" his line. He even considered becoming a franchisee in a separate venture on the side.
If Helene and I hadn't helped him resist such temptations, it's doubtful their business would be around today. Why? Because all those opportunities would have tied up capital, squandered cash, and taken Bobby away from doing the one thing that would make the company successful: building the customer base.
And Bobby is typical. Most first-time entrepreneurs I know have trouble maintaining focus. They forget that in a start-up, there are two limited resources, time and money, and you can't afford to waste either one.
Understand, I'm not saying you should wear blinders. Although you need to be focused, you can't be rigid. After all, your approach may not be working.
My initial approach to the storage business didn't work. When we started out, we couldn't get much information out of people in the industry, and so we didn't know basic things such as how to go after customers and how much to charge. In my delivery business, we'd always done well by offering competitive prices, great service, and state-of-the-art technology. I decided to use the same approach again.
Our target customers were big law firms and accounting firms. We put up display booths at the trade shows their office managers attended, and we made our pitch, promising them service they'd never dreamed of, at the same prices our competitors were charging.
Guess what. We got no bites. Not a single customer. Something was wrong.
We focused on the problems. Clearly, people weren't going to switch vendors for service and technology. So we'd have to reduce our prices. Also, we weren't getting enough leads, which meant our selling strategy was wrong.
The second problem was relatively easy to handle. We could forget about the trade shows and start cold calling, networking, using personal contacts, and so on. But how could we become the low-cost provider without losing our shirts?
The answer turned out to be amazingly simple, although it took us a while to find it. We finally figured out that what we needed were warehouses with unusually high ceilings. Such a space costs the same as one with low ceilings; you pay rent by the square foot, not the cubic foot. But you can pack in a lot more boxes if the roof is twice as high. With those two changes, we were off and running.
The point is that you need to be both focused and flexible. You can't let yourself be distracted by opportunities, but neither should you be so single-minded that you ignore signs of trouble. And there probably will be signs of trouble. It almost never happens that a business idea works exactly as you thought it would when you started out. You have to figure out how to make it work. You have to watch, listen, ask questions, experiment, make changes, refine your concept, and constantly develop your customer base. That's what building a business is all about, and most people can succeed at it--provided they don't lose their focus along the way.
And remember, there's a big payoff at the end. It may take a few years, but eventually your business will become so strong that it really won't need you anymore. Then you can chase after other business opportunities to your heart's content.
Norm Brodsky is a veteran entrepreneur whose six businesses include an Inc. 100 company and an Inc. 500 company. This column was coauthored by Bo Burlingham.