I interviewed 177 self-made millionaires over a five year period to find out what they did to become rich. . It was an eye opening experience and I wrote a few books about what I learned.
In my study, 51% of the self-made millionaires were entrepreneurs, meaning they made their wealth starting and running their own companies. I not only learned what the rich did to get rich, I also learned about all of their mistakes. And there were a lot of mistakes. I thought I’d share some of the lessons these self-made entrepreneurs were kind enough to share with me:
Pick Your Partners Very Carefully
Success is much easier when you have great partners. Failure is inevitable when you have bad partners. In any new venture pick partners who know what they are doing, have little baggage, have a positive mental outlook, are success-minded and have a hard work ethic. Pick partners who have been there and done that. Never go into any new venture unless your partners have real-world experience in that industry.
Success Requires Risk and Sacrifice
You cannot succeed without taking risk and making sacrifices. The sacrifices you will have to make are many. The most significant will be time away from family and friends.
Trust Your Gut
By gut, I mean your subconscious mind. Your subconscious mind picks up things that are otherwise invisible to you. Always listen to that voice in your head. It is your gut telling you what to do or what not to do. That voice becomes loudest when your emotions are at their greatest.
Success Takes Far Longer Than You Expect
Success takes a long time. Far longer than you expect. See Rule of Three below.
The Pursuit of Success is Very Stressful
Things will go wrong. When they do, they create enormous stress. That stress affects you, your loved ones and your business partners. It will negatively affect your health unless you mitigate it by exercising every day.
Fund Your Business with Your Own Money
When you are the source of your working capital, you are in control. When you depend on others for your working capital, they are in control. You will have to do what they tell you to do. You are their slave.
Assumptions Have No Value
Assumptions can cause you to look at things through rose colored lenses. Most assumptions in a business plan are wrong almost 100% of the time. Always pilot test every assumption before you accept it as fact.
The Pursuit of Success is Exhilarating
There will be ups and downs along your path towards success. More downs than ups. But the ups make it all worthwhile.
Success Requires Good Luck
In the pursuit of success, unexpected things happen. Sometimes they are good and sometimes they are bad. To some extent, success and failure are outside your control. Luck plays a critical role in success.
Failure is Humbling – It Can Drag You to Your Knees
Failure is an emotional experience. It can take the financial legs out from underneath you and your family. It can destroy your life..
You Must Overcome Adversity
Obstacles, pitfalls, wrong assumptions, mistakes and the unexpected can stop you in your tracks. Sometimes you can overcome those hurdles and sometimes you cannot. Those who succeed are able to overcome adversity. Those who are unable to overcome adversity, fail.
Be in Control of Your Business
Control means owning more than 50% of your business. Those who have ownership control of your business, control your business, your future and your life.
Pilot Every New Idea
Test new concepts first before diving in full-time into any venture. Dive in full-time only when the business model has been proven to work.
Have Fallback Savings
In every start-up, things will go wrong. Make sure you have set aside funds to help you and your family survive if you fail.
Understand the Rule of Three
It takes three times as long as you think, costs three times as much as you expect and revenue and profits will be one-third as much as you anticipated.
Business Plans are Worthless
Business plans are not worth the paper they written on. Never go into any venture solely on the basis of a business plan.
Have a Powerfully Strong Marriage
If you are married, make sure you have a strong marriage before pursuing any venture. If you have a weak marriage and things go wrong, it can jeopardize your marriage.
Don’t hire anyone. Use subcontractors. Don’t rent. Work out of your home.Only hire employees when you are succeeding and the business model has been proven to work. Work out of a shack if you have to until you have a steady revenue stream.
Keep in Constant Contact with Your Network
Pursuing success demands a great deal of your time. It’s easy to lose contact with your friends and former colleagues. Don’t ignore your relationships. You will be calling them to help you find a job if the business fails.