ENTREPRENEURS are an intriguing species. Charismatic, fragile, passionate, distracted: with such conflicting personality traits, it’s no wonder they sometimes fail to turn great ideas into viable – and profitable – businesses.
At Piper, we have worked with countless entrepreneurs during our 25-year history. The best share characteristics that can make all the difference between failure and success. Here are some thoughts on how to be one of them.
STAY CLOSE TO THE CUSTOMER
As your business grows, make sure you don’t distance yourself from your consumers or assume that you know them better than anyone else. Great entrepreneurs listen obsessively to their customers — to the point where they can act instinctively when something needs changing.
STICK TO THE KNITTING
All the entrepreneurs we’ve ever met have multiple ideas and short attention spans. They’re always on to the next thing. But the ones who succeed stay focused, do one thing really well and don’t allow themselves to get distracted. When Piper invested in Boden in 1999, its founder Johnnie Boden was considering moving the direct clothing brand into retail. At that stage, many customers didn’t shop direct — it was the big catalogues and nothing else. Our recommendation was to stick to selling direct. Johnnie was growing a very good direct business that was much less capital intensive and lower risk than retail. It proved to be worthwhile advice.
BRING IN THE BIG GUNS
Daunting though this might seem, recruit people into your business who are capable of working in a much bigger company. Surrounding yourself with highly experienced people will rapidly accelerate the growth of your business. Smart entrepreneurs also over-recruit, especially during an economic downturn. When conditions improve, they’re able to absorb the increased volume.
FIND AN HEIR APPARENT
There’s another reason for wise and careful recruitment: it helps you recognise the need for a succession plan. As an entrepreneur, you’ve been integral to the growth of your business. But you shouldn’t get to the point where you’re indispensable — nor allow yourself be handcuffed in by someone else who thinks the company can’t operate without you. So it’s very important to think about a succession plan and build a broader set of shoulders. The earlier, the better.
KEEP AN EYE ON THE EXIT
If you’re planning an eventual exit, be clear who you’re growing your business for. If you’re considering a trade buyer, think about what they might be looking for and identify the processes at which you want to excel. Maximuscle, the sports nutrition company, understood this extremely well, both when we invested in and exited the business. Have an eye for the long-term goal, plan how you get there and make sure you deliver.
GO FOR GOLD
At Piper, we often use the Olympic analogy — a split second better makes you a winner. If you focus on the things that will make your business stronger than your competitors’, and don’t get pulled down blind alleys, you’ll stand a far greater chance of long-term success. If you’re satisfying customer need, people will keep coming to you. They don’t suddenly stop wanting things just because there’s a recession — as long as you ensure that what you offer is what they want.
Libby Gibson is co-founder of Piper, a specialist in consumer brands, which has helped grow businesses such as Boden, Las Iguanas and Maximuscle. www.piperprivateequity.com