If you’re tenacious- and you’re willing to constantly adapt to change- you can make it as a start-up CEO. If not, you’ll almost certainly fail.
Now, that’s a pretty strong statement, but my experience tells me that tenacity and adaptability are the two key traits that a CEO (any CEO) must have- and these traits are even more crucial for a start-up.
That said, here’s my best advice for CEOs:
Cash or Profit?
I had a residential plumbing company as an accounting client years ago. They did $3 million in annual sales, and it sure looked like they were hitting the cover off the ball. Great reputation in the community- and who doesn’t need a great plumber?
But the owner so stressed it was making him physically sick.
The business was constantly short cash.
Turns out that the plumbing company had taken on a large commercial plumbing job, and the business lost a lot of money on the deal- enough money that they barely had enough cash to operate. To keep his sanity, the owner sold a portion of the business to an investor to raise operating cash.
If a profitable company can’t generate cash fast enough to operate, they can’t survive. I liked Gary Vaynerhuck’s comment in his answer: cash is like oxygen for a business.
Plan your cash flow carefully- and be prepared to raise more cash if you run short.
All About The Money
Every time I’ve tried to “make a lot of money”- I haven’t. I just had a conversation yesterday with someone who was (sadly) out of work. He’s never worked in sales, but he was looking into sales jobs “because you can make a lot of money”.
That’s not the right reason.
Managing a start-up requires a huge time commitment, without any certainty about the outcome. It has to be about excellence- and being passionate about achieving excellence.
Be excellent- people will find you and buy your product or service.
Activity vs. Growth
My wife likes to refer to “activity for activity’s sake” as polishing a brick. It doesn’t really get you anywhere.
As a self-employed person, I have to plan what I do carefully. I spend most of my time writing, so I do my toughest writing work in the morning. I outline work and do marketing later in the day. Most important, I get paid to write- so I need to do my best work (and a lot of it) as a first priority.
Figure that out in your own business. I know a very successful financial services rep who has sign over his desk called “The Job”, and it lists exactly what he should be doing for clients.
Innovation: Starbucks Example
Successful CEOs innovate, and Starbucks CEO Howard Schultz is a great example of an innovator. Here’s one example of innovation:
The goal of every marketer is to cultivate brand advocates. Zuberance defines a brand advocate as a “highly satisfied customer…who recommends their favorite brands and products without being paid to do so.” (Italics added).
Brand advocates are salespeople who promote your product for free.
Think about it: during the holidays, do people mention to you how much they love the Starbucks Pumpkin Spice Latte? If someone did, that person is a brand advocate. If you ran by Starbucks based on their recommendation, you can start to see the power of the brand.
The ability to innovate is a key trait for a start-up CEO.
When people ask me what I do, I get a lot of strange and concerned looks- and so will a start-up CEO. Don’t worry about it- go succeed, anyway. Good luck!
Ken Boyd is the Co-Founder of AccountingEd.com and owns St. Louis Test Preparation (accountingaccidentally.com). He provides blogs, articles and speaking services on accounting and finance topics. Ken is the author of Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies. Ken is a contributing writer for The Logical Entreprenuer.com, Investopedia.com and the Magoosh.com CPA Blog. His YouTube channel (kenboydstl) has over 420 videos.
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