I’m a Survivor: 5 Things Successful Entrepreneurs Do
What separates the survivors from the failures has long intrigued the small business community, but a new Xero survey is shedding some light on the topic.
The survey looked at 2,087 current and former business owners in the United States and the United Kingdom in order to compare business owners with surviving businesses to those with failed businesses. Here are the main findings, along with a research-based list of 5 things successful entrepreneurs do.
Determinants of Small Business Success
Respondents of the survey were asked a variety of questions in order to compare responses of surviving businesses and failed businesses. What’s ironic is that the things we tend to think of as requirements for success don’t actually determine success. Both passion and money do not differentiate business survivors from failures. This means that although these are important ingredients, having both passion and money will not make your business successful.
The things that DO separate business survivors from business failures are:
- The ability to learn from past failures.
- Investing in technology.
- Spending time with family.
- Building relationships with business mentors.
It’s interesting to see the importance of relationships in the survey findings. Both personal relationships with family and business relationships with mentors are two important factors that separate business survivors from failures.
5 Things Successful Entrepreneurs Do
From the list of things that differentiate business survivors from failures, we can begin to break down the specific things that successful entrepreneurs do. This includes:
1. They don’t work around the clock.
The stereotype of the entrepreneur who works day and night to get the business up and running is not only false, it could actually lead to failure. Results of the survey showed that owners of surviving businesses know the importance of stepping away to recharge. 58 percent say that spending time with family in the evenings is crucial to their effectiveness. 55 percent also keep their weekends free in order to spend it with loved ones.
2. They don’t pretend to have all the answers.
Entrepreneurs who run surviving businesses also tend to seek out mentorship and support. While only 14% of respondents with a failed business reported having a mentor, one-third of respondents with surviving businesses have a mentor to lean on. This mentorship can come from other business owners, but respondents with surviving businesses also had better relationships with their accountant or bookkeeper.
3. They’re willing to spend money.
Of course money does have a role in business success, but it’s not about how much you have but rather if you’re willing to spend it and what you will spend it on. The research found that as a whole, both surviving and failing businesses started lean – 26 percent started with less than $1,500, and 51 percent started with less than $7,500. However, the owners of surviving businesses were more willing to spend that money in the right areas. Surviving businesses were overwhelmingly more likely to send money on marketing (social media, advertising, PR) and software to help with finances and customer service.
4. They keep their finances in order.
Speaking of finances, they are also crucial to small business survival. The survey asked owners whose businesses failed if the reason was personal or a business issue. Of those who said it was a business issue, 65 percent blamed the failure on financial problems such as cash flow, visibility and access to capital. Owners of surviving business were much more likely to keep their finances in order. For the non-financially-savvy, this points to the importance of good relationships with accountants/bookkeepers as well as using financial software.
5. They aren’t afraid to fail.
Entrepreneurs are risk takers who believe in positive outcomes. The survey found that 58 percent of respondents with a surviving business actually had a corporate job before deciding to risk it as an entrepreneur. Some also had previous businesses that closed down in its early stages, but 71 percent described the closure as a positive thing. Not being afraid to fail – and bouncing back if it does happen – are crucial characteristics of successful entrepreneurs.
In conclusion, although passion and money are important components for starting a business, they do not determine success. Owners of surviving businesses are smart about their finances and they know the importance of leaning on family members, mentors and technology. Knowing what successful entrepreneurs do can help you set up your own path to success – just don’t forget to enjoy the journey along the way.