SOURCE : FORBES.COM
What Separates Successful Entrepreneurs From Those Who Fail
Many people starting a brand new business wonder if they’ve got the right stuff to succeed. Recent research by Xero , a provider of cloud-based accounting software used widely by the self-employed, suggests that the habits, practices and experiences that pave the way to entrepreneurial staying power aren’t what most people would expect. The study provides a rare look at how business owners who made it to the five year mark compared to those who had to close up shop.
Xero surveyed 2,000 business owners in the U.S. and the U.K. to conduct the research, released in late November. All of them owned businesses with 20 employees or less. The vast majority of businesses in both countries are microbusinesses, so very likely many of the respondents were solo entrepreneurs.
Here are of the assumptions debunked in the “Make or Break Report:”
Myth #1: Successful entrepreneurs can’t work for someone else. Not so. Xero’s research found that among successful entrepreneurs, 58% had held a corporate job in the past.
Myth #2: Successful entrepreneurs work 24/7/365. Running a startup can require long hours, but the entrepreneurs who succeeded guarded their personal time. Among them, 58% said spending time with their family in the evenings was critical to performing well as a business owner, and 55% said it was important to keep their weekends free for loved ones.
Nonetheless, these successful owners do stay connected to their businesses after hours, with just 28% saying it’s vital to turn off their digital devices after hours.
Myth #3: Successful entrepreneurs are radically self-reliant. Yes, smart entrepreneurs don’t mind standing out from the crowd, but that doesn’t mean they lack a support network. The survey found that one-third of successful entrepreneurs have turned to a mentor or support group for advice about their company, compared to just 14% of those whose businesses tanked.
Myth #4: Successful entrepreneurs roll up their sleeves and do it all. The DIY approach to running a business can only take you so far, as the entrepreneurs whose businesses survived realized. Among successful entrepreneurs, 42% said they had an excellent relationship with their accountant, while just 27% of those with failed businesses reported the same thing.
Successful business owners invest more in financial services and software. The survey also found that they are very willing to spring for marketing campaigns, while those owning failed businesses did not make this investment as often. Among the successful owners, 49% spent money on social media, advertising and PR, compared to 20% of owners of failed businesses.
Myth #5: You need a great product to succeed. Haven’t dreamed up the next hot kitchen gadget or holiday toy? Don’t kick yourself just yet. Xero’s survey found that 41% of failed companies peddled products, compared to 19% of successful companies. And the companies that tanked were more likely to target consumers than the successful companies.
In a related finding, 49% of failed companies sold to individuals versus 28% of successful ones. Meanwhile, 50% of successful companies sold to businesses. This isn’t surprising, given that business-to-business clients often have deeper pockets.
The upshot? If you want to succeed in a microbusiness, protect your work-life balance so you can perform at your best, invest the time and money in getting the advice and support you need and make sure to target clients with the financial wherewithal to generate steady revenue for you. Those approaches are working for entrepreneurs who have made it to the five-year mark, and that’s a powerful argument in their favor.
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