Passing the milestone of ten years of providing SmarterMeasure Learning Readiness Indicatorprompted me to stop and reflect on why we have succeeded. It is often stated that 90% of small business fail before year ten. When narrowed down to Internet businesses the figure is even worse at 90% being out of business by year five. Maybe a better question is why didn’t we fail?
- You start your business for the wrong reasons – This reason focused on the attributes of the company’s leader. Getting rich quick and having a high degree of independence were certainly not my motivation. In fact I still have not taken a substantial amount of money off the table and my income/standard of living is parallel to my employees. As Patricia stated I do consider myself to have a passion for what I do. I really feel good that we have helped well over a million students understand their strengths and weaknesses. Also as she mentioned I consider myself to have a high degree of mental stamina. (That must be the case as I wrote this at 4:00 PM on a Friday afternoon when I could be leaving the office.) I especially like her final observation: You like — if not love — your fellow man, and show this in your honesty, integrity, and interactions with others. You get along with and can deal with all different types of individuals.” I do think that the ethos of SmarterServices is one in which we value all of our constituents and express that in multiple ways. One such way is instead of giving door prizes like iPads, we make a donation in the name of the winner to a charity of their choice.
- Poor Management – I am certainly no MBA. But I know people who are. From the very beginning I made frequent contacts with my entrepreneurial mentors. I have valued and followed their advice. So far they have not let me down.
- Insufficient Capital – Who says you have to have debt to run a company? SmarterServices is living proof that you can run a zero-debt company for ten years. How did we do it? I would only hire a person when I had a one-year reserve of their salary in the bank. We were responsible with our expenses and only spent money in ways that directly improved our services. I realize that maybe we could have grown faster if we would have leveraged debt, but that could have also put us out of business. I live by the adage – “If your outgo exceeds your income, then your upkeep will be your downfall.” We only grew as our sales would support.
- Location, Location, Location – It was not our physical location that was important, but the timing of the service that we were providing. Over the past decade distance education has exploded. It is often about being in the right place at the right time.
- Lack of Planning – Thinking strategically almost been an obsession of mine. I am constantly thinking about the market we serve and how we need to best shape our services to fit the needs of the market. A leader cannot think about those things too much.
- Overexpansion – As I stated above we only hired employees and spent money when we had the funds in the bank to do it. Make the money first, then spend it.
- No website – This one simply does not apply to us. Our product is completely provided via our website.
Would I do it all the same way if I had to do it over again? Probably not, but I would do it about 95% the same way.