Secrets of Successful Small Business Owners
The author biked cross-country to learn and share these five lessons
The Silicon Valley approach for building companies has become the main strategy taught at many business schools. It goes like this: You create a prototype you can quickly test, preferably in the tech industry. You find a group of users and gain proof of concept. You raise capital and scale the business as rapidly as possible. You plan an exit strategy that may include going public or selling to an industry buyer. You shoot for a 10X return to investors. You make a lot of money.
This summer, our team at My New Enterprise (a company I co-founded that helps aspiring entrepreneurs) rode our bicycles 4,000 miles, from the west coast of Oregon to the east coast of Virginia, and interviewed 100 successful entrepreneurs on Main Street USA. Not one of them followed the Silicon Valley approach.
In fact, very few had any business training and none had any training in entrepreneurship. Nearly half of these business builders are over 50-years-old; some are in their late 60s and 70s.
Here are five lessons we learned from this unique and experienced group of successful small business owners:
1. Start With a Clear Purpose
All the entrepreneurs articulated a clear and powerful purpose for starting their business — and none mentioned money as a major driver. Rather, they started their companies to do what they love, solve a problem, provide awesome service, live in a more desirable location, create jobs, and give back to their community.
A driving purpose for Gail and Will Williams, founders of Idaho Sewing for Sports in Grangeville, Idaho (which makes padding and tubing products for ski areas and resorts) is to create jobs and a place of healing for people who have a difficult time finding work.
(MORE: Starting a Business After 50)
2. Stick With What You Know
Most of the entrepreneurs we met launched their companies in industries they knew well from prior experiences.
Sam Spayd, founder of Aero Legends in Florence, Ore. is a retired Air Force and commercial airlines pilot. He purchased a beautifully restored World War II biplane and offers the magical experience of “Open Cockpit” flying over the cliffs, beaches and lighthouses of the spectacular Oregon coast. Sam’s goal is to share this experience with as many people as possible.
3. Maximize All Available Resources
These entrepreneurs are masters of efficiency — they have a real knack for utilizing a host of resources other than money: They find mentors, cobble together used equipment, defer compensation, negotiate excellent terms and partner with their customers.
Amy Gardner, founder of Scarpa, a fashion boutique in Charlottesville, Va., found herself in a cash crunch during the last recession. She needed to pay off her vendors in order to acquire the coming season’s inventory. No problem. Gardner offered her customers significant discounts if they agreed to pay for upcoming purchases in advance. She raised $70,000, paid her suppliers and acquired her inventory.
4. Create Multiple Streams of Revenue
Once their core business was up and running, most of these entrepreneurs pivoted to related opportunities so they could diversify their income streams.
Lynda German and Polly Hinds are the founders of Mad Dog and The Pilgrim Booksellers in Sweetwater Station, Wyo. (Lynda is “Mad Dog” and Polly is “The Pilgrim.”) But in addition to selling rare books, they harvest crops and sell fresh eggs to the store's customers and to people who just drive by.
Multiple revenue streams make companies, and their entrepreneurs less vulnerable to a single product or service.
5. Serve the Broader Community
All these entrepreneurs give phenomenal service to their customers — the lifeblood of their business. This creates a tribe of loyal followers who rave about the company.
Equally important, these business builders are heavily involved in giving back to their broader communities. They are supporting schools, mentoring students, aiding the needy, remodeling churches, building soccer fields, helping with medical bills, etc. This endears the company to the community, which aids the success of the venture — even though this was not the intent of the owner's genuine desire to contribute.
Putting It All Together
In sum, the Silicon Valley approach to business building is super; it leads to remarkable innovations and thousands of jobs. But not everyone can build a Facebook, Google or eBay.
Our experience riding across America shows that just about anyone with passion and tenacity can build the kinds of businesses we saw on Main Street USA: You find a desirable location where you want to live; you find a need in the community you are uniquely qualified to fill; you use a host of resources other than money to get started; you diversify your products based on intimate interactions with your customers and you become a vital contributor to your community.
People over 50, in particular, have an excellent chance for success due to their skills, experience, contacts and work ethic. So if you have the desire to build your own company, don’t be afraid to go for it!