In 1971, I founded a payroll-processing company: Paychex. I had only $3,000 and a credit card, and everyone told me I was making a mistake. But by 1982, Paychex was No. 8 on the very first Inc. 500 list. We took the company public the following year, and now it has a $27 billion market cap. I still serve as director and chairman, and now run other organizations: Like a fiber-optic internet service provider, and a charitable foundation.
In my decades of doing business, I think I've learned a thing or two, so I decided to pass on some of my experience in Built, Not Born: A Self-Made Billionaire's No-Nonsense Guide for Entrepreneurs. The book is meant to be a road map and toolkit for founders--practical tips interwoven with my business philosophy. Here's my summary of its best parts.
Business plans should be logical and possible.
You read this all the time: "The market for my new product or service is $5 billion; if we can just get 10 percent of that...." Well I'll tell you: Paychex has been around for 49 years, and we're a very successful company. And we have only 7 percent of the market. So when I see these entrepreneurs come in and say they can get 10 percent of a marketplace in two to three years, it just doesn't pass muster.
Hire for attitude, not for skills.
When Paychex was a small company, I had a keypunch operator, Nancy. One day, she walked into my office and said, "I am the subject of marital abuse. I need to leave Rochester [New York]." I said, "Well, I think we can get you a keypunch job in another city." She said, "I need to make more money than that. I'd like to be a salesperson." To myself, I said, "Oh my gosh, I don't know if she could ever do it." I said to her, "I'll tell you what: I'll call the branch manager in Nashville and make sure he interviews you. And that's all I can promise." She got the job. Within three years, she was one of the company's top five salespeople. She was in sales for something like 15 years and sold to thousands of clients. All because she had the nerve to come into my office and ask for more.
Anyone who wants to be an entrepreneur can build the necessary skills.
Entrepreneurship takes a little bit of work; it takes maintaining a certain level of interest and excitement. Not everyone has the necessary skill set from the get-go. You have to be smart enough to recognize your weaknesses and either work on them or hire to fill those gaps. For example, maybe you just aren't cut out to be a sales manager. Fine, hire someone who is. You would be foolish not to do so, particularly when it comes to positions like accounting and sales.
Get a prenup.
Nothing's worse than trying to sell a business at the wrong time. But sometimes marriages end, and you could be forced to do so as part of a settlement. It's a great idea to have a prenup with everything outlined in advance--maybe by percentages, maybe by dollar amounts--so that there's no consternation, there's no adversarial relationship, and you can avoid losing your business.
When we were having a difficult time with Paychex in the early days, my first wife said to me, "Just keep going. Take one step after another. Don't stop." And I'll tell you, it was pretty damn good advice. Keep going. And don't forget to have fun while you're doing it.