Looking back on my time running my own company there are three things that I did consistently. I didn’t realise the importance. I just did it.
There are five common myths about entrepreneurs:
- That they are orphans and outcasts;
- That they are young;
- That they are driven by venture capital;
- That success depends upon a world-beating product;
- That they can't flourish in big companies.
- Customers. There are two approaches to customer. Make a “one-off” sale or make a number of sales over a long period of time. I advocate the second approach since it maintains a long term income stream. We sold our customers a Messaging Server and then annually a support contract or upgrade to the latest version of software. The target was to retain as many customers as possible.
- More Customers. We kept the pipeline of new customers filled to ensure that the increase is greater than those leaving. For example, new customers purchased our Messaging Server due to reviews in magazines, customer referrals, etc. and some we lost because their companies went under, were bought, etc.
- Profit. Every sale must makes a profit to keep the company going. Making a profit means knowing the cost of supply of the product or service. For example, we sold Support contracts that would pay for approximately an hour of engineer’s time. On average each support contact would cost us 2.8 hours to resolve. On the face of it we made a loss (and the customer got excellent value for money). But we knew that only 1 in 8 contracts would result in a support incident. (If only we knew which one of eight not to sell!)