2 answers

What made your business successful?

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I am a senior student at Brennan High school. I’m looking to get my MBA so that I can learn more about business. I want to own and run my own businesses. I want to be my own boss and have freedom. #business #entrepreneur #finance #business-management

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2 answers

Hagen’s Answer

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It's a simple question but it demands a complex answer. To run a successful business you need:

  • An offering (e.g. product or service) that people need. I was an electrical contractor in the San Francisco Bay Area years ago. People had old houses that needed their wiring updated so that worked.
  • The expertise and skills necessary to deliver that product or service as well or better than the other people in the market. That takes time, education, certification and licensing to name just a few requirements. In the beginning, I moved too fast and offered services for which I was unqualified and that created a lot of problems for me.
  • The ability to deliver that product service at a competitive price point. I used to say that all you needed to be an electrician is a pickup and a dog, not exactly true, but the barrier to entry in that market was pretty low. So certification and licensing can help enter and compete in a given market. I also was much more competitive when I worked alone or with one helper. Once I quit doing the work myself and hired a crew, I was just another electrical company and my costs were a lot higher. Then you need to shift your focus to managing your costs and eliminating waste. I wasn't as good at managing as I was at installing electrical systems.
  • Learn to manage. Managing was WAY harder than I thought. To begin with there are dozens of tasks you need to master (bids, payroll, taxes, code changes, people, projects) and the odds are you'll only like and be good at about half of those. You can hire someone who IS good at things you're not, but that costs a lot of money and in the beginning you don't have the revenue to make those hires.

A MBA will help you understand finance and to some degree management within an organization but probably won't buy you the independence and freedom to which you aspire. It prepares you to work for a (large) company - which it sounds like you'd prefer to avoid.

Finally, running a business does NOT buy you independence and freedom. You'll work twice as hard and twice as many hours running your own business. You DO, to some degree, have more say on when and how you expend that energy, but it's hard to win that bet when your working TWICE as many hours ;-). In my experience you can work your way into a position with a company which provides just about as much independence - e.g. working from home mostly during during the hours you prefer. When I closed my electrical business and when to work for a large corporation I asked "Is this all you want me to do?!?!" It was odd to me because I was used to doing everything. I wouldn't dismiss a corporate career to hastily. You can focus on the problems that interest you and you're not alone when things go wrong - which they will.

In my experience, I started my business way to young - before I had the experience and maturity to deal with all the different challenges that being an entrepreneur brings. So:

  1. Going to college is important especially if you want to work in a vertical that requires a specific degree (engineering, law, business, healthcare).
  2. You need to pick a business vertical and learn how that vertical works - what is a service or product?, what are the barriers to entrance?, how much money to you need to get started? That typically takes about 10 years.
  3. During that 10 years you mature and your picture of success sharpens. For me, the way I spend my day and the topics about which I get to contemplate is my measure of success. It will probably be different for you, but generally speaking, in your 20s you still believe a lot of other people's stories about success and happiness and those tend to cloud your judgement when your running a business.

I hope that helps,

Hagen


Hagen recommends the following next steps:

  • See my list above
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MaryRose’s Answer

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I word say be honest, direct, factual in your personal and business decisions. A good communicator also needs to be an excellent listener and be very open to feedback. These things will assist you with delivering a great customer experience to your internal and external customers.

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