Business North - Business Mentor
		with Daryl Erdman

In October 2009, Forbes magazine published its annual issue identifying the world’s richest people.

In a subsequent on-line edition story, seven billionaires were interviewed.

While none had made money quite the same way, each had acquired wealth through entrepreneurial activity. Their venues ranged from supermarkets, liquor, oil and gas, to hair products and real estate. Each was asked the same 22 questions, ranging from investment suggestions to politics.

To me, the most intriguing answers were their responses to four questions, centering on advice to entrepreneurs. These questions hit home because my recent book "Scar Tissue: Lessons from the World of Entrepreneurship" (Brio Publications), attempted to deal with most of them.

Those four questions:

• What’s the biggest blunder you’ve ever made and what did you learn from it?

• What one thing should every first time entrepreneur know?

• What one job should every person have to do at least once in his/her life?

• How do you know when to keep fighting, or cut bait?

Much in common:

In spite of their diverse business backgrounds, these seven responses had much in common.

For example, five responses to the first question dealt with trust and good judgment. Some felt their major mistake resulted from being too quick to trust, inadequate due diligence and testing of close associates.

Their responses to the second question advised first time entrepreneurs on becoming comfortable with risk, recognizing the time and effort it takes to launch a business, being prepared for rejection, and the tenacity to persevere.

It also is important to know and understand your business, its industry and market. The universal underlying message: Hard work and focused effort is essential for success.

More interesting was their responses to Question 3. Again, five of the seven agreed the best experience by far comes in jobs in which you are forced to learn to sell yourself and goods. Dealing with real customers and their purchase decisions helps understand what it takes to complete a sale. No business can grow and succeed without sales and knowing how to sell can help immensely when you begin.

Lastly, cutting bait is difficult, especially after early success when you hit a dip, for instance, in the current recession, or the loss of a key customer.

Perseverance is the mantra of the entrepreneur. People with the guts to start a business know the road will be long and hard. With the genetic optimism of the entrepreneur comes the certainty that success is just around the corner. But what if it isn’t?

Most of these billionaire entrepreneurs said it’s time to rethink the instinct to keep going when you no longer are having fun, and have that sick feeling in your gut. R.J. Kirk, a pharmaceutical entrepreneur offered the most excellent advice on this I ever have heard.

“If the question is meant to ask how one decides in advance whether to persevere against a challenge, the fundamental answer is that one must ask himself whether the application of effort can produce a good outcome,” he told Forbes Online Edition, Oct. 1, 2009. “We often may observe people persevering in the hope that the world will somehow change to an environment that is more promising for this particular work, e.g., that the investment climate will improve, that the value of some type of thing, whether real estate or securities, will rise generally. To such people (and we all have been in this group at one time or another), I like to point out that if you are able to make such macroeconomic wagers, you should simply play an appropriate index that is reflective of your view and skip all the hard work. One should therefore concentrate his work into areas in which he is convinced that his efforts will make the difference between success and failure.”

That makes ultimate sense. If you are personally unable to make the change that can turn the corner, you cannot wait for some large economic, political, marketplace or business change to rescue you. At this point, you need to have that serious personal “cut bait” discussion.

Trust: a 2-way street:

Although most of us do not aspire to be a billionaire, a comfortable living always is nice. None of these hugely successful magnificent seven would deny he would have succeeded without the ability to attract and develop talented, trustworthy people. Learning how and who to trust is key. People never will trust you if you do not first trust them. It’s essential to give people challenging assignments with authority and autonomy to do the job as they see fit.

Marcus Buckingham was one of the first to propose it is more important to focus on peoples’ strengths and build on those rather than trying to correct weaknesses. His book, "Now, Discover Your Strengths" (The Free Press, 2001), was a national best seller.

You want to allow people to grow by enhancing their interests and strengths. Constant focus on weaknesses is demoralizing and will affect their well being. Associates in your company need to be treated as assets, not expenses.

Focus on their contributions to your success. Be honest and share information freely, the good and bad. Holding back information only will produce resentment and make people feel they are not part of your team. Sharing the reality of any given situation gets people involved, and you can challenge them to give you ideas that can help you succeed. Openness will go a long way in helping you achieve the efficient smooth running business you deserve.

Erdman is chief executive of Strategic Growth Resources, a business acquisition firm. Previously, he founded entrepreneurial programs at the University of St. Thomas in St. Paul and the University of Iowa. You can reach him at derdman@concertoventures.com, or by telephone at 218-326-6939.

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