A serial entrepreneur is “an entrepreneur who continuously comes up with new ideas and starts new businesses. As opposed to a typical entrepreneur, who will often come up with an idea, start the company, and then see it through and play an important role in the day to day functioning of the new company, a serial entrepreneur will often come up with the idea and get things started, but then give responsibility to someone else and move on to a new idea and a new venture”. Source: BusinessDictionary.com
Last month, a business colleague and I met for lunch to assess the issues with serial entrepreneurs for a workshop we planned to host with an organization and decided to look at 2 of them that we knew that had hatched so many businesses in less than 5 years. Our goal was simple. We decided to just ask the questions. How were the businesses doing? And what were the issues?
Serial Entrepreneur 1:
Jane (not her real name) began her career in the construction business and when the market crashed in 2008, she decided to open her first business – a retail store in her neighborhood and stayed doing her construction job. This business was not open consistently because she had a “real job” that had her working when the boutique was open. She opened it some week days, so she closed this business but kept the lease for the space.
The second business in the space was making and selling a line of clothing. This time, she took a couple of days off the “real job” to open the store more. She had customers complain about prices of the clothing and watched them only buy them when they were on sale. A year later, she got the message and closed this business but still kept the space.
The third business was in food. This time, she brought in a partner who help fund it. In this business, there was lots of branding, social media and buzz. It should have worked, right? No, it did not because the prices were still too high and the food product was one that customers did not need daily, it was a luxury. So, a year later, this business closed too and she still kept the space.
The fourth business was in food. Again, a new partnership funded the branding, social media and buzz. What happened here? Product was also expensive and consumers could find it at a lower price in proximity to her store. In less than a year, the business was closed. This time, she returned the space and is quiet for now.
This serial entrepreneur, Jane, kept hatching businesses without doing any market research. She never worked in the clothing or food business prior so did not really understand them fully. More importantly, she really lacked the patience, never took time to do the business or to set up and follow a system or process to grow it. It’s not that the 4 ideas were bad, it’s that the entrepreneur enjoyed the rush of starting a new business and not the consistent day to day of maintaining and growing the business. Simply, there was no roadmap for any of the 4 business just concept concepts.
Serial Entrepreneur 2:
Michelle quit her job to set up a food business and did not develop her own idea but copied ideas from other similar businesses so there was no uniqueness about her business. She then decided to stand out by bringing a new product which should have helped but it divided her customers. Half of them left her after the new product arrived and the others began coming in less frequently. By the end of the year, she was struggling and decided to keep the business open but it is still struggling.
In the midst of the first business, she decided to open the second business, a service business and began the learning curve of understanding the new industry, and getting distracted by the two sets of customer needs and demographic (the food and service customer). She added more overhead, time and money but was unable to get to a profit level and lost customers in both businesses. This business is still open but it is not making a profit.
The third business was in food, this time, a specialty product. This time, her rent was double the first store and the learning curve was even higher. All buzz and media still did not drive traffic to the new place. Business is still open but no profits yet.
The fourth business just opened and it is in a third sector, an area where the industry is contracting (losing businesses). Other similar businesses are closing. Rent is moderate, the space size and layout is poor, and the location is not the best. So far, some buzz but no profit in sight.
This serial entrepreneur, Michelle, also keeps hatching businesses and does not even wait to see a full year to start a new one. She is distracted and not doing sufficient market research. She also has never worked in 3 sectors so does not really understand them. More importantly, she lacks the patience, time to do the business and does not follow a system or process to grow any of the businesses. It’s not that the 4 ideas were bad, it’s that the entrepreneur enjoyed the rush of starting a new business and not the consistent day to day of maintaining and growing the business. Simply, there was no roadmap for any of the 4 business just concept concepts.
As an entrepreneur with a business of over 9 years, I understand these serial entrepreneurs and frequently watch them start and implode in 2 years. The hardest part of the business is the start-up period, and it is a 2 year process. When you cross that line, then a business really takes hold. The next stage is to maintain and grow it. What I can say from these 2 serial entrepreneurs is that the lessons are simple to outline but complex to deal with. Some of the 10 important steps are:
1. Create a roadmap – a business plan would help
2. Understand the industry
3. Understand the product and service
4. Understand the consumer and target them effectively
5. Listen to feedback and response immediate
6. Understand location
7. Do market research
8. Know your competition
9. Work on one business effectively before starting another
10. Seek advise and listen
Most Businesses need a good 2 years to grasp a sense of how they function. It’s a 2 year cycle to see the similarities, differences and patterns from one year to the next. Some entrepreneurs lack patience and perseverance needed for the long haul of starting and maintaining a business. Serial Entrepreneurs trying to be Entrepreneurs always end up walking a way from concepts.
Need to get your business together, and if you are interested in making a shift to enjoying the entrepreneurial process, I will be hosting a series of webinars in October, please email me at email@example.com