Five Important Practices For Entrepreneurs
by Fares Elsabbagh
If you are an entrepreneur, you probably got into your business because of your knowledge and experience in a certain sector. The work usually requires years of training and ample experience working in the field.
Successfully scaling your business to a multimillion dollar company requires that you have the right characteristics and thought process. It’s always a work in progress, but here are five practices you should implement if you want to build a financially successful company.
1. Take action.
Many people become stuck after coming up with a great idea and are too afraid to take the leap toward executing it. A successful outcome is born from a great idea, but 99% of success comes from how you execute it. Don’t get tied up with perfecting your idea on paper — just go for it. There’s nothing worse than an entrepreneur who takes months polishing their business plan only to waste valuable time. Spend your time wisely, and adjust your plan as challenges arise. The most important step is taking that first leap into action.
This is particularly important for entrepreneurs in the construction industry because taking action is crucial to survival. Challenges and obstacles will be faced every hour, and those who take action and keep moving forward will survive. If you’re stuck and not taking tasks to completion, you’ll find yourself creating bottlenecks. And we know what happens to a bottleneck when pressure builds up: It eventually explodes. Everything you do must be taken to completion. This is applicable to your business, your clients, your relationships and all your challenges.
2. Be scared.
Those who are nervous about failing become hyper-focused and in turn push themselves to succeed. If you’re scared, then you’re doing something right. Let that fear motivate you to keep going. I truly believe that underneath it all, entrepreneurs are insecure people, but we hide behind our success as entrepreneurs. Use that insecurity as fuel to take that leap and find confidence in your success. Always keep your end goal in mind and remind yourself why you’re doing this.
I find this practice especially important for entrepreneurs in construction. We face failure every day, including failure on individual projects and failure in relationships with suppliers and contractors. It’s inevitable in the construction industry. Use fear to motivate you to get stronger results on the next opportunity.
3. Be resourceful.
As an entrepreneur in the remodeling industry, being resourceful is even more important than it is for a typical entrepreneur. In our industry, time is money. It’s vital, therefore, that you learn how to use all available resources to increase cash flow. This quote by LinkedIn co-founder Reid Hoffman, which is one of my favorites, sums up this concept perfectly: “Starting a company is like throwing yourself off the cliff and assembling an airplane on the way down.”
An excellent example of resourcefulness is our internship program. Since the program started, we’ve hired over 20 unpaid interns who have gained significant experience that has helped them in their careers. Our company benefits from this program because we’re able to provide our prospective clients with time-consuming work, like 3D renders, that we couldn’t have provided them with otherwise. Providing these 3D renders to prospects helps give us an edge over our competitors. It allows us to create a sense of perceived value and thus makes it look like we’ve gone above and beyond, but in the end, it doesn’t cost us much.
4. Obsess over cash flow.
When you scale your business to millions of dollars, it will be very important to focus on your gross margin for each individual project. The success of your projects and your company will count on it. The most important tool to measure your cash flow is a works in progress (WIP) report. Ask your bookkeeper to create this for you. A WIP report is a picture of all your active projects with a focus on how much you’ve collected versus how much you’ve paid and your resulting gross profit margin. It’s my most important tool to measure the health of my company’s cash flow. It’s impossible to manage hundreds of active jobs in multiple cities without a WIP report.
In my early years, I was fooled by having lots of cash in the bank. I thought that was good enough to measure the success of my company. However, you’ll quickly realize in the remodeling industry that cash disappears quickly. Understand your cash flow, and do not ignore it.
5. Welcome change.
I truly feel like many experienced people in our industry don’t like change. This is not the right mindset to have. Accepting change can open windows of opportunity for motivated individuals.
Part of my company’s culture has always been to ask, “How do we make things more efficient and easier for us?” This has created a team of individuals who always put forth great ideas for change. Always look to improve, even if it means you need to invest in your company. Don’t be shy about changing your business model, your systems, your employees, yourself and your way of thinking. This is crucial for growth in the industry, especially as consumer behaviors change.
This article was originally written by Fares Elsabbagh and appeared here.