According to the 2018-2019 Global Entrepreneurship Monitor (GEM) report, 78.7% of the U.S. population believes that entrepreneurs are held in high regard, and the country has had a record-breaking boom cycle since 2010. Despite these promising numbers, only about 10% of startups last longer than 10 years. What makes the difference between a company’s success or failure? Here’s what you need to know to ensure your business’s success.
6 Tips for Becoming an Entrepreneur
1. Find your people.
Launching a new business can be isolating, especially for those accustomed to working in an environment surrounded by colleagues. Look for a community of like-minded individuals or entrepreneurs whom you can connect with—either in person or online.
2. Stay sharp.
“It [Business] used to be about knowing a few things deeply, while it now seems that it is becoming just as important to learn a high number of things very fast. Learning has become a day-to-day activity,” says Will Klippgen, the co-director of INSEADAlum Ventures.
This point is particularly apt for entrepreneurs. The ability to learn by trial and error and adapt to change allows entrepreneurs to move faster than their competitors.
3. Trust and empower your employees.
We work in a swift-paced business environment. Companies that succeed need to be nimble to stay ahead of the competition. This means staff must be empowered to do their jobs and make decisions without micromanagement. Lack of empowerment can create bottlenecks that slow down execution. That results in a direct hit to the bottom line.
Additionally, today’s new generation of employees crave autonomy and reject the notion that they need to be closely monitored. Micromanagers can’t retain today’s top contributors. What can? Trust, mentorship, and support from managers will create a culture of empowerment that leads to retention, productivity, and results. As Zig Ziglar once said, “You don’t build a business. You build people, and people build the business.”
Learn how to manage a new team.
4. Leverage your business location.
We operate in a global economy, but most businesses still succeed first by leveraging their local advantages. Here are five key factors of location that influence a company’s outlook (we call these the 5 C’s of location):
- Cost: Factors like rent, operating costs, and wages can be influenced by the business’s location.
- Convenience: An entrepreneur’s familiarity with a place and local regulations and laws will help them succeed. Proximity to key markets and technological readiness are also crucial to the company’s growth.
- Community: The location can influence a business owner’s ability to network and grow social capital.
- Caliber: The quality of the workforce and infrastructure (e.g. roads, airports, and information and communication technologies) are partially determined by the business’s location.
- Creativity: Some communities foster resourcefulness and ingenuity, which benefits the businesses located there.
“Essentially, it is up to entrepreneurs to match the opportunities and challenges of a location with their products’ capabilities and needs,” explains Dr. Sami Mahroum, founding director of INSEAD’s Innovation & Policy Initiative.
5. Collaborate with the big players.
Collaborations between large corporations and startups can be an essential part of every company’s innovation portfolio. Big corporations know this. In fact, 68 of the top 100 companies from the Forbes Global 500 are engaging with startups to tap into innovation without the need to make huge upfront investments. Recognizing this potential, Microsoft has launched Microsoft for Startups, a program that helps small businesses grow their customer and revenue base. Access to the kind of big resources that large corporations enjoy can be a matter of survival for newer companies with lower solvency.
6. Create a positive social impact.
CSR, or corporate social responsibility, is a big deal. Companies that recognize this have an edge, whether large or small. Investors and corporations often have their own sustainability programs and expect the same from potential partners. Consider what you’re doing to ensure a positive social impact, and communicate those values to your potential business partners.
The government can also view companies more favorably if they promote positive social change. As an example, this could translate into the form of tax deductions.
According to Ilian Mihov, Dean of INSEAD, the goal is to make it “unacceptable for businesses to destroy value for society while creating value for themselves.” He argues that for entrepreneurs to be successful, communities need to feel invested in their purpose.
Are you ready to become part of the elite 10% of businesses that stand the test of time? Check out our advice for starting your own company.