Why do most small businesses fail? #2

Today I had a very nice discussion with Robert Jan van Vugt about my previous post and I would like to mention at least one of his very good arguments: “Isn’t it the essence of and entrepreneur that he is walking new roads, going where no one has gone before, sees opportunities where no one else does? Doesn’t that make the entrepreneur indispensable?”. Well, I think Robert Jan is absolutely right, but luckily his standpoint doesn’t interfere with my opinion, it even strengthens the ways I think you should build a company.

So we have seen that you should make yourself replaceable in your company for it to at least have a chance to succeed. But if you are not doing the innovative, unique or special work that is required for your products, what should you be doing?
The entrepreneur should work on his company, not in his company. The entrepreneur/founder should work on the vision, the strategy and the long term goals of his venture. He should be looking at what his company needs at what stage to make it successful. That means that he shouldn’t have an actual job in the company but rather a job on the company, keeping track of how it is running, how everyone is doing and what the major issues are. This will ensure that he is working on creating a better, more efficient and more successful company. How can you work on long term goals, or hiring new talent when you are fiddling around with some small electronic part of your product? How will you be able to track changes in the market when you are out there with customers 24/7?

Without the every day or every minute guidance of the founder, it is necessary to have a special team working in your business, people that really believe in the product and dare to take responsibility. They have to be able to run the company, based on the goals they set by and/or with the founder, and trust the founder on guiding and leading the company in the right direction, without depending on him.

I think this is the way a successful company is build, and this also shows how you can make yourself replaceable in your company, and still be the entrepreneur that is necessary for innovation and the company in the first place!

I will write a bit more on this tomorrow, going deeper into how you should get this idea to work.

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About erikkoerselman
I'm currently finishing my Bachelor degee in Aerospace Engineering at the University of Technology Delft. I'm also persuing my Master at the same faculty, in the direction of Design and Production of Composite Structures. Aside or together with my studies I'm following several business courses, which should enable me to become a succesful entrepreneur after my graduation. I'll write this blog to document my experiences during my 'entrepreneur' internship at the Kauffman Foundation in the USA.

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