In Main Street Entrepreneur, lifelong entrepreneur, business consultant and university professor Michael Glauser reveals how to achieve your dreams by implementing the nine keys of entrepreneurial success. In this edited excerpt, Glauser reveals the three key teams you need in place to grow a successful business.
Teamwork is critical to building a successful business. The successful entrepreneurs we met across America build three types of teams: 1) They engage a “brain trust” of mentors and advisors who coach them for free, 2) they build a team of partners who join them in the venture, and 3) they develop strategic partnerships with individuals and businesses that play critical roles for the company. Nearly all of the entrepreneurs we met built a brain trust and strategic partnerships, even if they were operating a solo company. If they were growing a larger business, they also built a team of full-time partners.
Let’s discuss these three types of teams in more detail.
Building your brain trust
The larger your brain trust, the more successful you’ll be in your business. So how do you find these people? I’ve put together a simple process from the hundreds of entrepreneurs I’ve interviewed over the years.
Step 1: Complete a detailed inventory of the critical skills needed in your business. For example, some businesses are very labor intensive, while others are sales intensive; some require manufacturing and quality control, and others require ecommerce, information technology, and social media. What critical skills does your business need?
Step 2: Conduct an honest evaluation of your own skills relative to the critical skills needed in your business. In other words, what are your strengths and weaknesses relative to your profile of required skills? Knowing this will help reveal the gaps you need to fill with advisors and team members.
Step 3: Select one or two primary mentors who know you well and are willing to help. These are often friends, family members, or colleagues who are willing to take your calls and meet with you regularly. It’s best if they understand business, have a large pool of contacts, and are passionate about what you are doing.
Step 4: Meet with your primary mentors and review the list of critical skills needed in your business. Discuss your own strengths and weaknesses relative to this profile. Ask if they know people who’ve the required skills you lack. See if they’ll contact these people on your behalf or at least allow you to use their name as a reference.
Step 5: Meet with all the referrals you get and explain what you’re doing. See if these people are willing to talk occasionally as questions arise. Be prepared for these meetings, don’t waste people’s time, and always ask if there’s anything you can do for them in return. Your goal is to build mutually beneficial relationships. In addition, when needs arise, ask these advisors if they know others who may be willing to help with specific issues.
Building your core team
My wife, Mary, and I ran our business -- a frozen dessert shop -- by ourselves until we had three stores and 30 employees. Although we had three great store managers, it was clear we’d eventually need more coverage in the field than we could provide. So we sat down and discussed the characteristics of a great general manager. This person had to “get” teenagers, enjoy working with them, be firm but fair, and be a great teacher and motivator. It sounded like we were looking for a scout master. Mary and I both thought of Gregg Morrow, the scoutmaster in our local area. He was super with young people. He was also honest, intelligent, hard-working, and savvy with technology. The problem was, Gregg had a good job 3M, and we were sure he wouldn’t be interested in the job. So we used him as our ideal persona in our search for a general manager.
A few months later, we still hadn’t found anyone who measured up to Gregg, so I visited him at his office. He listened to my story and thanked me for thinking of him. Then he told me no.
A year later, we had five stores and 60 employees. I needed a general manager now more than ever, so I went back to visit Gregg. He had watched our progress during the past year and was intrigued with our growth. He decided he wasn’t going to change the world at 3M. He wanted to have more influence on young people and the community, and our position was now a good fit for him. Gregg learned the business quickly and took our company from five to more than 60 stores. He was a phenomenal partner for eight years until we sold the company.
Just like our experience with Gregg, the entrepreneurs we interviewed over the past year chose team members primarily based on character. Since many of them run smaller companies, they can’t afford to have noxious people in their organization. They tend to look for decent people first and skills second. When you only have five or six people in your company, you can’t bury a difficult person deep in a corporate structure. So quality of character has to be a major emphasis when finding team members.
Most important, your team members should be passionate about your purpose, share your values, and fit the culture you’re trying to create. Nothing is more exciting than like-minded people enjoying the entrepreneurial experience together. And a highly motivated team with a common purpose will always go farther and faster than any individual working alone. On the other hand, disruptive people take a lot of energy to manage and can drain passion from an organization. So the best hiring strategy for an exciting company is purpose first, character second, and skills third.
Building strategic partnerships
In our frozen food business, we had several core competencies. We created healthy products that tasted great. We successfully marketed our products through wholesale and retail channels. We gave phenomenal customer service. We were excellent planners and executors. And we ran an extremely efficient operation with no debt. However, we weren’t very good at designing our retail spaces, making our cabinetry, constructing our stores, manufacturing our product, or sourcing and maintaining our equipment. So we cultivated long-term partnerships with people and companies that did these things far better than we could. We stuck with our core competencies and relied on them for their expertise, essentially creating a machine that hummed along at top speed.
We stayed with the same architect, cabinet maker, contractor, manufacturer, and equipment supplier for nearly 10 years. Thus we never wasted any time shopping around for new partners. So how did we keep from being taken advantage of? We sat down with each partner and said: “We really like your work and would like to stay with you as we scale our business. What we need is fair pricing that we can always count on.” Then we agreed to “cost plus” pricing, set profit margins, fixed fees per case, etc. We built a team that was able to move quickly, and we never had to worry about overpaying for anything. These were remarkable win-win partnerships.
We saw this same phenomenon as we interviewed entrepreneurs across the country. Nearly all of them have strong strategic partners they have relied on for years. They continue to use the same suppliers, distributors, designers, accountants, and service providers. These mutually beneficial relationships allow them to do what they do well, while meeting critical business needs through others.