Entrepreneurs launching a business need to adhere to two key business lessons: hire the right people, and plan ahead, says Steven Cohen, head of software and services group Sage One International, for Africa, Australia, the Middle East and Asia.
Cohen says 26 years after first getting involved with software accounting startup, Pastel – which eventually became Sage -, budding entrepreneurs often ask him what he wishes he had known when starting out. He says he can distil the answer into two key lessons.
“Hire the right people from the start and if you fail to plan, you are planning to fail. Any entrepreneur that sets out with these two pieces of wisdom is on a faster track to success,” Cohen says.
According to Cohen, good people are the foundation to any successful business. He advises looking for team members who are professional, motivated, collaborative, trustworthy, and customer-focused. In addition, he says entrepreneurs should look for people who share the company culture and believe in the company vision.
“In a world where products are similar, good service is a given, and technology is commoditised, good people are your real competitive edge,” he says.
To achieve the right team, he cautions against rushing into hiring decisions, and says entrepreneurs should not be tempted to just hire the cheapest person.
“Get the best who you can afford or develop smart, young people who are setting out in their careers. The right employees are the best investment you can make in your future growth.”
Second, Cohen says while the power of “gut instinct” is also valuable, the process of planning is indispensable to any successful business. He says even the plan may turn out less important than the planning process.
The process of planning forces entrepreneurs to think through what their business is about, and where it is going, Cohen says, which is a valuable tool, considering the often hectic nature of an entrepreneur’s daily work.
“You can draw plans for where your revenues come from, your customers, your cost base and other elements of your business, knowing completely that reality may have other ideas. It’s very likely that you’ll need to adapt a two-year or five-year business plan in response to the needs of your customers, a changing business environment, and a fluid regulatory space,” Cohen says.
“That’s fine – you can change your plans or even throw them away. The effort still won’t be wasted because you’ll know your business better. Having a plan is about doing things in a conscious way and working towards a set of goals and objectives – it is not about constraining your flexibility.”