While on holiday in Greece, I spent time reading about all of the mistakes made and lessons learned by entrepreneurs over the years. It quickly became clear that there is a pattern here. It’s more than just individual mistakes, there are clear behavioral patterns.
So, I developed this list of 10 essential tips to help you become a successful entrepreneur.
1. Listen to your inner voice
How do you figure out what you really want? In the hustle and bustle of everyday life, the inner voice often remains unheard–sometimes with dire consequences. On their journey to become an entrepreneur, at some point many people realize that they disregard their values. For instance, Manfred Maus, the co-founder of the DIY chain OBI, regrets that at the opening of a superstore in an emerging market, he allowed bribe money to flow. He shares, “when you are under pressure, it is important to stick to your values. If you cease to be a role model, your employees will not respect you anymore.”
2. Stay independent
Whenever entrepreneurs lose their independence, for example, due to liquidity shortages or disputes among the management board, it is a turning point. Many of these entrepreneurs regret being dependent on financial institutions or controlling investors. It is tempting to take short- and medium-term loans from banks instead of gradually increasing equity.
Often, entrepreneurs recommend financing projects with personal funds whenever possible. “Always secure a good cash flow, and try to work independently,” advises the Hamburg-based Edel-Music founder Michael Haentjes. This will give you the ability to shape your organization as you see fit and aid your journey in becoming a successful entrepreneur.
When you are under pressure, it is important to stick to your own values. If you cease to be a role model, your employees will not respect you anymore. Manfred Maus
3. Grow organically
In the DNA of most entrepreneurs is the desire to develop and grow their company. This may take years, decades or even generations. However, many entrepreneurs want to accelerate this process and forge alliances with corporations to achieve higher growth. After the initial euphoria, most of them become disillusioned with these partnerships. In retrospect, they would have preferred to have grown slowly. Their advice? If you want to become a successful entrepreneur, do not become a megalomaniac or the plaything of others. Slow and steady often wins the race, so don't rush your growth at the expense of your autonomy.
4. Be aware of different cultures and mentalities
Many entrepreneurs focus on hard facts, for example on synergies, market shares, and prices, but neglect important cultural and mental factors. Numbers don't make the whole picture. Instead, focus on soft factors and people. Understand and value different kinds of talent. This is an important characteristic of a successful entrepreneur and will help you create a stronger company culture.
5. Never rush a deal
Many entrepreneurs are very self-confident. They long for new deals, making premature decisions instead of judging the situation soberly. This has led to bad decisions. Experienced entrepreneurs recommend taking time to understand the deal and what it would mean for your company. Transmission manufacturer Manfred Wittenstein urges others to be aware of this path dependency in thinking.
Moreover, many successful entrepreneurs warn not to trust people too quickly. Many of them made decisions on the basis of seemingly good relationships with business partners, but realize soon after making the deal that they were intentionally misled.
6. Choose your employees carefully
Successful entrepreneurs depend on outstanding and trustworthy employees and partners. But beware of hiring family members or close friends. You risk broken relationships and hurt feelings. Knife manufacturer Karl-Peter Born who was deceived by his close friend/employee for years warns that such an incident must not lead to the loss of trust in sincere, committed employees. Instead, it is important to pay more attention to details and not to lose control of your own company. As soon as you entrust people with responsibility in your organization, you should make sure you know what their motivations are and if they pose a risk to your business.
7. Promote an entrepreneurial corporate culture
Many entrepreneurs underestimate how important it is to create a good corporate culture in which all employees have a common goal and act independently. They recommend retaining the best and investing in good teamwork. Frank Breckwoldt, the founder of the Ryf Coiffeur Group says that he treated the heads of his hairdressing salons as “recipients of orders” and not as executives. It would have been much better to quickly give them a high degree of autonomy. His advice: promote self-initiative rather than centralizing everything. This creates responsibility and a sense of trust that inspires all involved.”
8. Focus on your strengths
Entrepreneurs are people of action and not administrators. They like to build new things with great passion, but after a while, they embark on new projects. It can become precarious if over-optimistic entrepreneurs enter new areas. Some of them put their core business at risk. In retrospect, they quote the old German saying “cobbler, stick to your trade!” That is not a call to stick to the status quo, but rather a recommendation not to neglect your strengths. The German Drugstore CEO Dirk Roßmann says, “it is better to focus on your core business than to force the impossible.”
9. Believe in yourself
In order to survive in competitive markets, you need a high degree of resilience and the ability to assert yourself. People are not born with these characteristics. Some people start very cautiously. Many entrepreneurs regret that they took so long to start believing in themselves and fighting for their ideas. In retrospect, they encourage others to trust their gut feeling and act quickly in a crisis.
10. Transfer responsibilities
Entrepreneurs recommend gradually transferring responsibility to employees, reducing the dangerous dependence on one person. They recommend developing a succession plan at an early stage and deciding on the best person available. Leaving your own company too late makes it difficult for the next generation to find their role. In the worst case, the future of the company is at stake. A timely withdrawal also offers you the opportunity to start new projects or to have more time for your private life.
The 10 lessons are taken from the book “My Biggest Mistake” by NIKOLAUS FÖRSTER which is (unfortunately only) available in German via: www.impulse.de/fehlerbuch3.