Tip #7:
Making money – volume does not equal profits.
Making money is the ultimate challenge for any entrepreneur. It requires great self-discipline. It also helps to be an imaginative fundamentalist who quickly determines that the secret to the success of your new venture is in one or two key areas of the company. In the case of my Company, it was in sales. If I could figure out how to sell software as a product, there was great potential for profits. To date, no one had solved that problem. People said it couldn’t be done; others had tried and failed. Consequently, that was where I spent most of my time.
However, you can be an entrepreneur in cost control, as well, by figuring out how to reach some goal without spending any money. It may include the sharing of facilities at a trade show or a computer center, or it could include a joint development effort with a client or prospect interested in a new product – both forms of barter that save on badly needed cash. Successful entrepreneurs, out of necessity, get very good at this.
Finally, great self-discipline is required to make money because only you stand between your corporate treasury and all those who wish to take it from you. Often, your staff will demand equipment or services to do their jobs better and view you as the unreasonable or uncaring person standing in the way. Your salespeople, on the premise that volume equals profits, will want you to sign contracts with clauses that could cost you money down the road.
Thus, making money in any new venture is not easy. While every venture I have been associated with has made money, and lots of it, it was always a constant battle. In any successful entrepreneurial venture, there is usually only one person with his or her eye on the bottom line – you.
John Cullinane’s Entrepreneur Survival Tips of the Day Come from his book, The Entrepreneur’s Survival Guide: 101 Tips for Managing in Good Times & Bad.
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Cullinane Corporation was to become the first successful software products company in the world at a time when computer industry gurus said it couldn't be done, that others had tried, and failed, and so would he. As such, it was the first software products company to have an IPO, the first to be listed on the NY Stock Exchange, and the first to reach a billion dollars in valuation. However, there were scary times. For example, the company's capital got as low as $500 with a payroll of $8,500 due that day when a check of, literally, $8,500 came in the mail that morning. For fifteen years the company had growth in sales and profits of 50% and then it ran into problems because it had stopped doing some of the very things that had made it successful in the first place. That's what these tips are all about. How an entrepreneur can do something that others say can't be done, and how to continue to be successful.
John Cullinane was named three times as the Wall Street Transcript's CEO of the year in the computer software products industry. He was also Founding Chairman of the Massachusetts Technology Leadership Council, Founding President of the Boston Public Library Association, first President of the John F. Kennedy Library Foundation, and a graduate of, and a recipient, of an honorary degree from Northeastern University.
A walk down Wall Street from the perspective of a high tech entrepreneur...
Download John Cullinane's Report, "Widows and Orphans" (pdf, 168Kb)
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