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We all love to hear the stories of individuals who started a business and became overnight successes. You know the narrative. The entrepreneur starts working out of their basement or garage. Creates a great product or service. Gets noticed or catches a lucky break and suddenly is making over seven figures.
I love to read about these motivated individuals, but I also know that the reality is very different for many business owners. Everyone wants to grow. No one wants to be just a caretaker. But growth is tricky. Do you want to grow quickly? Perhaps sell and move on? Are you in it for the long haul? Want to leave a legacy? There is no right answer, but what you do and how you operate is impacted by your choices. Here are a few things to consider if you want to be an overnight success.
Related: I Built a $20 Million Company by Age 22 While Still in College. Here’s How I Did It and What I Learned Along the Way.
1. Plenty of cash
If you want to grow quickly and be that “overnight success,” you need the cash to scale up all areas of the business. However, one of the key impediments to growth for entrepreneurs is access to capital. Without cash you cannot buy raw materials, machinery or other equipment. You also need people to do the heavy lifting at start-up and then keep a steady work pace once you are past the rush. Even when entrepreneurs have planned for the budget to operate, they often forget about the cost of marketing. Without that you simply cannot get noticed today and grow at a rapid pace. The cost of marketing in a digital world are far more than you expect.
Over the years, the U.S. Small Business Administration (SBA) has said that “small businesses with less than $5 million in annual revenue and net profit margins between 10-12% should allocate around 7-8% of their gross revenue to marketing.” Businesses that want to grow quickly often spend much more.
When the need for cash goes beyond what the entrepreneur can raise on their own, they look to investors. Shark Tank is full of stories from people who are trying to get noticed and cut a deal so they can grow. While negotiating, many must give up a significant piece of their business. That is common when you go to venture capital or private equity. Of course, the money is just one aspect of it. “Sharks” or other investors also bring treasured knowledge to the entrepreneur to spur growth.
Entrepreneurs, like me, have a different approach to money. I have preferred to “pay as I go.” In other words, try not to take unnecessary loans and buy equipment as needed, so we get a quick return on the investment. There have been times when we have financed efforts, but have never taken money from an outside investor. Early on, I had “angels” interested in investing. I considered offers but ended up declining. Has that slowed our growth? Probably, but we also have retained control of the business, and for me, that is priceless.
Related: The Financial Truths No One Tell You in Your First 2 Years of Entrepreneurship
2. Unquestionable quality
Making a quality product or delivering a quality service is hard enough under normal circumstances, but when you grow quickly, you must ramp up. Do you have manufacturing capacity? Will your suppliers be able to keep up with a surge in business? Do you have training programs in place? I know that it takes a new hire at my company at least six months to get up to speed, and during that time, we do not let them work solo. Piling work on even seasoned employees can result in mistakes. If you have the systems and people in place to grow and maintain quality, that is great. But when growth is exponential, quality can be compromised.
On one occasion, I had to make the tough choice not to go after a large piece of business that would have expanded our reach internationally. In fact, the contract would have almost doubled our annual sales that year. I was really tempted. It would have been great to show that kind of success and gain bragging rights for a high-profile job. The reality was that we just did not have the bench strength to take it on, and trying to build the team quickly would have been difficult. We declined to bid for the job. That hurt. But it also prompted me to slowly begin to build up the team. Today we do work internationally and can maintain the quality.
Here is the lesson. I believe it is better to turn down projects or new clients than risk a bad outcome just for the sake of growth. Good reviews are read and dismissed. Bad reviews linger a lot longer. Today, those reviews are instantaneously on social media, and just as quickly as you soared to the top, you can crash and burn.
Related: I Made $1 Million in 20 Minutes — Here’s How I Did It and What They Don’t Tell You About ‘Overnight’ Success
3. Laser focus
In a recent article, I wrote about how to avoid being distracted by “shiny pennies.” I shared that successful entrepreneurs stick to their core business strategy. Those who experience overnight success take this idea to the highest level. They are laser-focused on products and services but also the speed at which they operate. They set stretch goals and work tirelessly to achieve them. They are focused on opportunities not all the obstacles that others see. When things go wrong, they focus on the solution, not the problem. It is that focus that sets successful entrepreneurs apart. While others see them as an overnight success, it has been a carefully crafted plan that got them where they are.
It might seem like some businesspeople are lucky. In the right place at the right time. The reality is, like the actor who waited tables for years before getting discovered, it takes a lot of hard work to become an overnight success … and even more to stay at the top. Most of us do not see the years of effort, the struggles and the failures that it took to be successful. We prefer to think that it just happened. I started my business in my basement and worked out of it for several years before I could afford an office. It still amazes me when people think my company was successful quickly. It took much longer than people realized.
So, the next time you hear a story about an entrepreneur who went from their garage or basement to running a multi-million-dollar enterprise, look for the story behind the story. That entrepreneur had to find cash, offer a consistent quality product and be laser focused. It takes effort to be an overnight success, and it does happen. But, for every individual who makes it, there are countless others who have reclaimed their basement or garage for its original purpose.
Slow and steady or overnight success. Which will you be?
We all love to hear the stories of individuals who started a business and became overnight successes. You know the narrative. The entrepreneur starts working out of their basement or garage. Creates a great product or service. Gets noticed or catches a lucky break and suddenly is making over seven figures.
I love to read about these motivated individuals, but I also know that the reality is very different for many business owners. Everyone wants to grow. No one wants to be just a caretaker. But growth is tricky. Do you want to grow quickly? Perhaps sell and move on? Are you in it for the long haul? Want to leave a legacy? There is no right answer, but what you do and how you operate is impacted by your choices. Here are a few things to consider if you want to be an overnight success.
Related: I Built a $20 Million Company by Age 22 While Still in College. Here’s How I Did It and What I Learned Along the Way.
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