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What Does It Really Take To Be A Successful Entrepreneur?

This year marks the beginning of my 18th as corporate and business growth lawyer. Along the way, I have had the honor of interacting with, and serving as legal and strategic counsel to hundreds of entrepreneurs and emerging growth companies.

by Andrew J. Sherman
Senior Partner, McDermott, Will and Emery in EntreWorld.org

During this journey, I have gathered some thoughts and observations about what I think entrepreneurship is all about, and I thought it would be fun to share with you some lessons I’ve learned about what it takes to be a successful entrepreneur. In no particular order, they are as follows:

1. Have a plan – always. Failing to plan is planning to fail. And have not only a good business plan but also a life plan. What do you really want out of this life? How will you get it? How do your current plans fit into your current life situation?

2. Be passionate about what you do. More than 90% of the world’s people are frustrated with their jobs or businesses! How can you possibly succeed and motivate others to follow you without bringing passion to your business! Passion is contagious – those around you will catch your high energy level, allowing your company to achieve new heights.

3. Knowledge is truly power. Especially in today’s Information Age, you can’t be an entrepreneur or a leader with your head in the sand. Your antenna must sit high, with your radar screen wide at all times. Pay careful attention to key market trends, the moves made by your competitors, and the satisfaction level of your employees.

4. Change is not only inevitable, but will happen faster and sooner than ever before. As entrepreneurs, you must be flexible, nimble, and ready to shift gears at any time. If you are too rigid or fear change, you have selected the wrong path.

5. Understand the power and importance of teamwork. TEAM truly means Together Everyone Achieves More. Business is not an ego trip—if all you want is the glamour, be a fashion model, not an entrepreneur. True entrepreneurs get the most pleasure when members of their team have a chance to shine in the spotlight.

6. Entrepreneurs must be persistent but not to the point of stupidity. Knowing "when to say when" is a positive trait in all contexts, especially in entrepreneurship. Not all ideas are meant to mature into viable opportunities, and part of your job is to understand the difference. Your "idea filter" can be your most valuable weapon. An educated decision not to go forward is a lesson, not a failure.

7. Integrity is one of your greatest assets, and once it is lost, it is almost impossible to get back. Treat others in business as you wish to be treated. Go out of your way to protect and enhance your reputation through high moral and ethical standards. The world is small and getting smaller—the rules that you decide to bend or the relationships you ruin can and will come back to haunt you. Try as hard as you can to create "win-win" situations and not to burn bridges, even with your adversaries.

8. Entrepreneurs learn early how and when to bootstrap. The essence of an entrepreneur is someone who turns "nothing into something," which, by definition, means being creative, persuasive and highly resourceful. If your idea of entrepreneurship is big cars and fancy dinners, think again. Wal-Mart founder Sam Walton drove old pick-up trucks and ate tuna sandwiches at his desk until the day he died. That doesn’t mean that you won’t eventually have a chance to enjoy the fruits of your labor—BUT if you try to do so prematurely, you will wreck your company and your life.

9. Don’t confuse activity with results. Many entrepreneurs often associate industry awards, media coverage, and revenue with success. While you often do need all three to help you succeed, the bottom line is still the bottom line. If you can’t return value to your shareholders and produce a profit at some point, you will truly be the entrepreneurial version of the hamster on the wheel—running around a lot but not getting anywhere.

10. Don’t forget those who helped get you there. Your family, friends, mentors, key referral sources, and others who care about you all come together to form a loose support network that deserves a lot of the credit for your success. Entrepreneurship requires a significant individual effort and commitment, but is never an individual accomplishment. People really do need each other to succeed. Your challenge is to be the type of person others truly want to help.

11. There is no room for whiners in the rough-and-tumble world of the entrepreneur. A successful entrepreneur accepts responsibility for defeats and allows others to take credit for victories. An entrepreneur must be accountable and persistent. He or she does not talk in terms of failures, only in terms of learning experiences, temporary hurdles, glitches, unexpected surprises, setbacks and other temporary (rather than permanent) conditions, which can and will be overcome.

12. Entrepreneurs must be excellent communicators. They must have the skills to share their vision and the ability to get others to buy into it, whether recruiting employees (especially in the early days) or pursuing investors or customers. You must earn people’s trust and have the ability to communicate your dream in a way that makes others want to share in it.

13. Entrepreneurs are not mavericks, and they are not cowboys. They take measured and calculated risks—in fact, really good entrepreneurs will do whatever they can to mitigate risk by truly understanding their marketplace and the key players. When they do take risks, it is with open eyes and armed with the right competitive weapons. Entrepreneurs study markets carefully, look for changes and unmet needs, and fight like hell to meet those needs as quickly and cost-effectively as possible.

14. Entrepreneurs are problem-solvers. They understand their customers. They talk to customers often, find out their problems and challenges, and then deliver a solution efficiently and effectively. They sense opportunity where others see chaos, contradiction, and confusion. They seek to build businesses that are durable and sustainable (e.g., have the ability to withstand challenges, cycles, and trends), because business means solving problems that others are willing to pay to have solved.

15. Entrepreneurs are usually not first into a market, but they are the best in the market. McDonald’s founder Ray Kroc did not invent the cheeseburger anymore than Steve Jobs invented the computer or Fred Smith the postage system. But all three were visionaries regarding the potential and opportunity of these products and services and built companies around these opportunities. Aggressive, creative, and persistent, they were able to convince others to buy into their vision and share their dream on a foundation of trust, integrity, and substance. They brought new applications to existing industries and then trained customers to become comfortable with the paradigms they had created.

Finally, for God’s sake, have fun. Life is too short—make sure you enjoy what you are doing. Only you have the power to change your path. You are limited only by your dreams, your courage and your capacity for overcoming challenges. As business guru Steven Covey has written: "All things are created twice, first in the mind, and then into the real world." A true entrepreneur learns how to translate vision into reality.

Author’s Profile

Andrew J. Sherman

Andrew J. Sherman is a Capital Partner in the Washington, D.C. office of McDermott, Will & Emery, an international law firm with 1,000 attorneys worldwide. He is a recognized international authority on the legal and strategic issues affecting small and growing companies and serves as one of the practice group leaders of the Emerging Business and Technology Practice Group in the firm’s Washington, D.C. office. He also serves as an Adjunct Professor in the Masters of Business Administration (MBA) program at the University of Maryland and Georgetown University where he teaches courses on business growth, capital formation and entrepreneurship. Sherman has been General Counsel to the Young Entrepreneurs’ Organization, or YEO, since 1987, and has written 11 books on the legal and strategic aspects of business growth and capital formation. His most recently published books include The Complete Guide to Running and Growing A Business, published by Random House in 1997; Mergers and Acquisitions: A Strategic and Financial Guide for Buyers and Sellers published by AMACOM in 1998; Parting Company published by Kiplinger’s in 1999; and Raising Capital published by Kiplinger’s in 2000. His newest book, Fast Track Business Growth, was published by Kiplinger’s in 2002. Sherman can be reached at (202) 756-8610 or by e-mail at [email protected].

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