What do the successful do differently from the rest? The Directors’ Centre Magic Million Survey compared and contrasted the attributes, traits and characteristics of successful entrepreneurs with their less successful counterparts to find out the answer.
Breaking through the one million barrier - How to make a million
The study asked what successful (and aspiring) owner-managers/directors of growing businesses think is required to break through the MM (Magic Million) barrier: namely a £1m turnover and/or taking £1m out of the business.
By asking the successful (been-there-done-it successful business growers) and the wannabes the same set of questions, we were able to extract what it was that separated the successful from the less successful.
The big difference was the approach to success.
The wannabes (particularly those that had got stuck as wannabes, unable to move on) tended to have what could be considered a "blame" gene, always blaming others for their position. The successes, on the other hand, did not blame others and recognised that “self-limiting beliefs" (“I can’t…”, “I shouldn’t…”, “it won’t work…”, “they won’t believe me…”) is what holds back so many people in business.
When looking at the results, one has to take on board a couple of caveats.
Big caveat number one is: “Beware of the ‘survivorship bias’!”. We see the winners and learn from them, while forgetting the huge unseen cemetery of losers. We tend to give disproportionately large attention to the words of the winners.
The second caveat is: beware when people attribute their success to certain key factors or activities – performance (good and bad) is probably related far more to chance than skill, yet people rationalise their success and create a cause/effect explanation.
Lesson 1: When comparing the winners and losers, one sees more similar attributes than contrasting ones.
Learning Point: don’t assume that the difference can be so readily spotted.
Lesson 2: When asked: “What’s holding you back?” the aspiring growth businesses tend to blame the outside world for their slow progress. Fear is the dominant emotion: of relinquishing financial and managerial control. At a similar stage, the successful recognise that they, the founder entrepreneurs, are the problem and the bottleneck.
Learning Point: My attitude to growth is crucial. I can become the brake on the business or the catalyst to future success.
Lesson 3: Highly successful businesses consistently have a preoccupation with: strategy; marketing; and teams.
Learning Point: Start focusing on the Holy Trinity; work "on", not "in" the business.
Lesson 4: Entrepreneurs must also be willing to let go of: financial control (sharing ownership); and management control (sharing the responsibility of growing the business with the team and outside advisers).
Learning Point: Maintaining excessive control will stop the growth of the business so you need to find the balance where you control yet motivate and inspire the business to ever greater heights.
Lesson 5: Every "How to Make a Million" title has an inevitable (and pretty much identical) list of what the successful do. Unfortunately, it’s the same as the list of what the failures also do! It seems the big difference is massive energy and a lot of luck.
Learning Point: Be clear about how you will succeed and how you will avoid failure.
Interestingly, all our winners presented a combination of the following:
1. Charismatic leadership (and not always by consensus).
2. Attitude – a "can do", blame-free culture that recognises success and failure go hand-in-hand, and a willingness to pay the price.
3. A fast-moving, exciting business environment.
4. Rewards and systems that motivate the individuals concerned.
5. Employing the right people.
Note to the owner on getting past a £1m turnover:
1. You are the problem.
2. Work ON not IN the business – create the systems and processes.
3. Sell something people want, charge sensible prices, and blow them away with legendary service.
4. Take massive action.
Note to the owner on getting £1m out of your business:
The company must be able to tick all of the boxes below to find a buyer:
* Systematic, underlying, repeatable, sustainable profit machine
* Reference and trophy clients
* Uniqueness and excellence
* A senior team to take it to the next stage.
And a final thought...
Some 70 per cent of small businesses hope to get their millions out of the sale of their business, yet only 25 per cent actually make any plans to do so – you need an exit strategy. Hope is not a method!
Further detail of the research and report can be found at http://www.robert-craven.com/magic-million.php
Robert Craven spent five years running training and consultancy programmes for entrepreneurial businesses at Warwick Business School.He is a keynote speaker and the author of business best-seller ‘Kick-Start Your Business’ (foreword by Sir Richard Branson). He now runs The Directors' Centre and is described by the Financial Times as "the entrepreneurship guru". For further information, contact Robert Craven on 01225 851044, firstname.lastname@example.org