Monday, August 2, 2010

The Makings of Success

Half of all small companies go out of business after five years, according to the U.S. Small Business Administration. But why is the failure rate so high?

It's a combination of factors, obviously, with lack of proper capitalization usually topping the list of externals.

But what about the internals? I've been writing recently about what interior qualities make for a successful entrepreneur. Over at Bloomberg BusinessWeek, we recently tackled the age-old question about whether an entrepreneur is born or made, with interesting results.

In my L.A. Times column this week I hone in on six factors that make for successful entrepreneurs even during recession.

Despite the financial challenges of 2009, approximately half of the respondents who participated in a survey done by The Guardian Life Index said that they expected either a greater than 10% increase in revenues over 2008 or projected growth for their companies over the next 12 to 24 months, or both. Of the 1,100 respondents, more than 400 looked forward to expanding their businesses in the years ahead, and 200 anticipated increasing sales even in 2009.

Turns out there are six key dimensions that differentiate those success-oriented small business owners from their less-successful peers: collaboration, self-fulfillment, future focus, curiosity, tech savvy and action orientation.

Success-oriented small business owners learn how to rely on and delegate effectively to others within their business as well as build strong personal relationships with their management team, employees, consultants, vendors and customers. They are more committed to creating opportunities for others than most entrepreneurs wholly focused on their own monetary rewards.

Pretty interesting stuff, proving yet again that the iconic image of the head honcho solopreneur who makes all the decisions with an iron fist and considers his employees like so many cogs in the company wheel is not only out-dated but flat-out wrong.

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