Failure is inevitable for any entrepreneur. “Failing forward” is a phrase that explains it perfectly. It’s the notion that each failure contains valuable lessons to learn from in order to do better in the future. Still, even with a glass half-full attitude, failure is rarely fun.
During his years as a businessman, Sean Frank has learned numerous lessons. As the founder of the Cloud Equity Group and a successful serial entrepreneur, he has experienced roadblocks and set-backs that entrepreneurs face and found ways to overcome them.
Cloud Equity Group is a strategic capital provider that invests in struggling businesses and partnering to assist in overcoming hurdles and scaling upward. In this report, Sean shares a few common mistakes that he’s seen entrepreneurs make.
Unrealistic Expectations
The idea of entrepreneurship sounds appealing to many people. When one thinks about being an entrepreneur, we naturally think of being our own boss and making lots of money. The reality is a long and difficult path to bring the vision to life. It’s important to understand the tremendous amount of labor and skill required to get there. As Sean Frank puts it:
“Everyone is attracted to the results of being a successful entrepreneur — fancy clothes, nice cars, extravagant trips. It’s easy to ignore the hard work and the many failures it takes to get there. The reason that many entrepreneurs fail is that they may not be willing to put in the work and take the risk to get there.” As Malcolm Gladwell, in his best seller Outliers explains, any venture or profession requires a minimum of 10,000 hours to reach the top tier of success. Entrepreneurship is no different.
Poor Investment Decisions
While starting out, capital is often limited, and entrepreneurs need to be smart about how to spend their money. Entrepreneurs often forgo expenses for as long as they can to make their dollars stretch — their own salary, for example. Preserving capital is important, but it’s equally important to ensure that investment is not being held back in areas integral to the company’s success.
Sean likes to stress that entrepreneurs often fail to spend sufficiently on people. “It’s tempting to try to do everything through grassroots efforts to keep costs to a minimum. The reality is that no one can do everything. If you really want your business to succeed, you need people to carry some of the weight so that you can focus on what’s important to achieving growth.”
It’s important to consider where time is best spent. An entrepreneur who manages the books or pays vendors isn’t adding value to the business. These non-value creating but essential tasks need to be delegated to people who are capable of handling them so that your focus can be on adding value to the company.
Poor Strategic Partners
Most businesses will need an infusion of capital at some point to help scale. Once a business reaches a certain financial milestone, be it consistent year-over-year growth or strong historical cash flows, options will begin to open in capital markets.
Sean Frank explains that most investors care about making a return and will structure their investment — whether it be in the form of debt or equity. It may be hard to see at the outset, but when entrepreneurs gain access to one source of capital, other options often arise. The best option isn’t always to accept the easy money but rather consider which funds and support will help grow the business.
“Having a capital provider that offers some operational assistance, or growth resources in addition to money, can drive success. Don’t be afraid to ask a capital provider how they can help your business. If they don’t have a good answer, think twice.”
Cloud Equity Group is what Sean refers to as a “strategic capital provider” that invests capital in businesses and forms true partnerships to help businesses scale.
