10 things every start-up leader must do
As a global serial entrepreneur, consultant, educator and author, Tom McKaskill admits the road to building a million dollar business is a hard one.
McKaskill, who built and sold several successful businesses before becoming one of Australia’s foremost experts on entrepreneurism, has just written a new eBook called Make Millions From Your Business: 101 Tips For Success which is available from Amazon’s Kindle store.
He says that while building a start-up remains a huge challenge, it is one of the best ways to become wealthy.
“What is clearly obvious is that people who get involved in early stage firms have a much higher chance of gaining significant wealth. This not only applies to the founding entrepreneur but to those who actively support them during the early phase of the venture.
"There are many examples of successful entrepreneurial ventures where tens and hundreds of employees and investors secured significant wealth.”
“Even in smaller enterprises, several individuals can walk away with multi millions. The decision is yours – but don’t hesitate. This is a great opportunity to change your life forever.”
Here are 10 of Tom’s top tips the start-up leaders should follow to ensure they get on the path to a million-dollar business.
1. Hire the best
Good people are hard to find and often difficult to hold onto. But good people are effective. They get the job done, often in half the time. They need less supervision and often take initiative.
They don’t leave a mess behind them which wastes your own time fixing. They are good to work with as they get on with the job. They lift the productivity of those around them and make being in business worthwhile.
On the other hand, there are people who you put up with. They scrape through, never doing the job really the way you would like, requiring a lot of hand holding and leaving a few problems in their wake.
You often wonder why you put up with them but you accept that they are better than no one. In the end, you compromise your business because you end up with accepting mediocrity.
In hindsight, the best people are worth having even if they only stay for a short period.
2. Share the wealth
Entrepreneurs create organisations which, if they are successful, are only so because of the combined efforts of all the employees. Rewarding those who contributed is a great way to say thanks. It is also a motivating force for all those who turn up every day to make it happen.
The values which underpin an organisation says a lot about the founders and much about the way in which the organisation works. There is a big difference between working for “you” and working for “us”.
You need to ask yourself what you would like to happen if times were tough – will everyone pull together or will people desert you for the security of a larger company?
What reputation do you want as an entrepreneur? Remember that the successful ones will often have more than one venture. Imagine how much easier it will be to recruit the right people when you have a reputation for sharing the wealth.
3. Have a consistent message
Have you ever taken a good hard look at your marketing and sales literature and asked the questions, “Who are we?”, “What do we do?” and “Who are our customers?”. You will be surprised how confusing the messages are. Different people over time make up their own version of the corporate message, creating a very confusing picture.
If your own people can’t get the message right, imagine how difficult it is for your customers, suppliers, service providers and recruiters.
Consider the potential customers – what do they see as they review your marketing material?
You need to move to a state where the messages are consistent in all your published material but also that your stakeholders all have the same view of what you do.
4. Create interesting and challenging jobs
Good people are hard to find and even harder to keep. They usually have no trouble getting a new job and securing the remuneration they want. However, they are not always just motivated by salary, although it is important to pay the market rate. What they often want are interesting things to do and assignments which challenge them.
We neglect at our peril the aspirations of our staff to better themselves or to create for themselves an environment where they enjoy coming to work.
While we don’t have to create a 100% interesting and challenging environment, we need to have some portion of the job in this mode.
People who are challenged and enjoy the work are more productive, more contented with their situation and tend to mix better with other employees. They tend to stay longer, are less demanding in their conditions and are easier to work with.
5. Reward exceptional performance
The way in which you reward and sanction behaviour in your business will determine the way in which staff act. You motivate them according to what you encourage and discourage. If you want exceptional performance, you have to show by your actions that you value that form of behaviour.
Individuals who contribute to the health, profitability and resilience of the business through their decisions, actions and behaviour are worth keeping and certainly worth recognising in some way.
Whether that recognition is “employee of the month”, or a mention in the company newsletter or a special “thank you” from the president, it is worth doing.
However, don’t neglect financial rewards for exceptional contributions or time off or a paid vacation. Perhaps even ask them what would work for them – it might be an education allowance, an opportunity to work on a special project or the chance to go to an industry conference.
Your actions will convey to others in the firm the type of behaviour and contribution which the firm values. By rewarding exceptional performance you will encourage others to make the effort.
6. Educate and cross-train workers
Specialisation and dedication is highly productive but it can also be boring for staff. Feeling stuck in a job without hope of enhancing your career or improving future employment prospects is demotivating for employees. At the same time, allowing an individual to dominate a job puts the firm at risk if the person suddenly leaves or is away ill.
What I found over many years of employing staff is that they welcomed the opportunity to learn new skills, participate in new activities and educate themselves to improve their prospects. Instead of losing staff, I ended up retaining them longer than the average in the industry.
When the business went though difficult times, instead of staff leaving to find better security, they were prepared to stay because their wider range of skills and better education made them recognise they were highly employable and didn’t need to worry about getting a job if they were suddenly made redundant.
The cross-training and education opportunities also made them appreciate their current position and made them more interesting and contented staff.
7. Productise knowledge
One of the major contributors to high growth is the principle of scalability. Higher scalability or replication occurs when products are standardised, simplified and packaged so that a larger number of people can sell, install and use them.
The problem with knowledge in peoples’ heads it that it is very difficult to scale, thus it severely limits the growth of the firm. In order to grow, a lot of people have to be recruited and then trained on the knowledge.
If, however, that knowledge can be embedded into a product, the ability to more quickly deploy it increases dramatically.
The manner of productising can vary but in essence it means taking knowledge and putting it into a form which can be deployed more quickly in a standardised form.
That might mean a documented process, a software product such as a diagnostic or a tangible product such as a control system.
Once productised, the product is standardised so that training is easier and more routine. Less knowledgeable people can be used for its deployment and standard methods can be utilised in the selling process. Rapid growth depends on the ability to scale. Without productising the knowledge, growth is inhibited.
8. Don’t compromise on ethics
There will be times when you have to make tough decisions and there will be times when there is nothing to guide you but your personal values. The nature of ethics suggests that, when the going gets hard and you have to make the tough decision, can you live with your decision?
Whenever you compromise your basic beliefs, you have to live with the consequences and the nagging thought that, just maybe, there was another decision you should have made.
A great test of the right decision is whether you can stand up in a public forum and justify your decision. We can only do that if we have strong fundamental beliefs which we stick to. The question of what is right is often different for each of us.
It comes from our upbringing, our parents, schooling and religious and cultural beliefs. This is why different people will make a different decision given the same set of facts.
What is important is that you know what you would do and others around you share those ethical beliefs so that you stand together in the face of a difficult decision.
When you compromise those beliefs, you start to undermine your moral authority but also your own self-belief in what you are doing. Stick to your beliefs.
9. Build teams not islands
In any business it is very easy for individuals and entire departments to become isolated and detached from the rest often with their own agenda.
When this happens, the fabric of the business is rendered in pieces and the chances of a coordinated response to an opportunity or problem severely inhibited.
We need to think of the business like an automobile where every part has a function to play and where the whole is much better operationally than the parts. We need to work to ensure that everyone is part of the team and not just an onlooker.
The role of the entrepreneur is both leader and visionary. They need to create an environment where everyone looks forward to the rewards which come from their combined success.
The reward for success can be as simple as achieving industry recognition or having done something outstanding.
But without something which pulls everyone together around a common purpose, it is very easy for individuals and departments to focus on their own goals, often at the expense of others.
10. Someone has to be the boss
At the end of the day a business is not a democracy and someone has to be the boss and make the hard decisions. You can’t have a situation where the employees don’t know who has the last say or where several people say they are in charge. When they disagree you have a dysfunctional business.
Even if you start the business with several others, each with an equal share, the business will only operate effectively if one person is given the task of leader.
There are simply too many times when there is no right answer and someone has to make a judgement call in order for the business to have some sense of direction.
Pick the person who people respect most for their wisdom, leadership and vision and make it work.
Tom McKaskill is a successful global serial entrepreneur, educator and author who is a world acknowledged authority on exit strategies and the former Richard Pratt Professor of Entrepreneurship, Australian Graduate School of Entrepreneurship, Swinburne University of Technology, Melbourne, Australia.
You can find his books on entrepreneur secrets on Amazon Kindle’s store.