The Habits of Highly Successful Entrepreneurs
Modern entrepreneurs live and work in a fast-paced and frictionless environment that is unlike anything before seen in history.
Through the power of the internet, entrepreneurs have the choice of a variety of platforms and business models, all with almost zero barriers to entry. Today’s startups may take many forms: some are run as side hustles on shoestring budgets, while others may be backed by venture capitalists at multi-million dollar valuations even before a cent of revenue is generated.
While it is true that today’s entrepreneurs must be able to navigate this unique landscape, many of the crucial habits adopted by the world’s highly successful entrepreneurs are actually quite timeless and applicable to most situations – and anyone can take them up as long as they are committed to results.
What Habits do Highly Successful Entrepreneurs have?
Today’s infographic from MBAnoGMAT.com highlights the fruitful habits that many generations of business leaders have relied upon time and time again.
“Get the Most Out of Each Day”
Time is a precious resource – and people like Ben Franklin or Elon Musk have previously built their schedules to maximize the amount of productivity they get out of each day. Franklin had a 13-week self-improvement plan, in which he focused in on one specific “virtue” that he valued each week. Meanwhile, Musk schedules his days in five minute intervals to minimize wasted time.
“Look to Learn”
With zero barriers to information, you now have access to more words of wisdom than anyone throughout history. Warren Buffett, Bill Gates, and Oprah Winfrey understand this – and they make reading and acquiring new knowledge a central part of their self-enrichment strategy.
Buffett, who is known for his voracious reading habit, says reading is like compound interest:
Read 500 pages…every day. That’s how knowledge works. It builds up, like compound interest. All of you can do it, but I guarantee not many of you will do it.
“Stay Fresh With Exercise”
Richard Branson wakes up at 5 A.M. every morning to kite surf, swim, or play tennis. Why? He claims this gives him an extra four hours of productivity each day.
Go too long without an exercise routine, and you may find your ideas running on fumes.
“Possess a Strong Mindset”
According to many of the world’s highly successful entrepreneurs, the biggest barrier to success is psychological. About 80% of businesses crash and burn in their first 18 months, but many of the entrepreneurs on the other side of that statistic are the ones who simply refused to give up.
It takes time to build a reputation and a brand, and sometimes the fruits of these labors do not show up as fast as an entrepreneur would like. Self-starters who stay mentally strong will come out of this process, which always takes longer than expected, with a better shot at success.
Ranked: The 20 Easiest Countries for Doing Business
Entrepreneurship is challenging at the best of times. Here are the countries where at least starting a new business is easy to do.
Ranked: The 20 Easiest Countries for Doing Business
Contrary to popular belief, the hardest part about running a business may not be finding customers, it’s getting one started.
Depending on the public policies and application processes of your country, you might struggle or succeed in opening and operating a business.
If you live in New Zealand, for example, you can get a new enterprise up and running in half a day. If you live in Luxembourg or Argentina, however, it’s a different story─with the process sometimes taking over a year.
Today’s chart uses data from the World Bank’s annual Doing Business 2020 report, which delves into the ease of doing business in countries around the world.
Measuring the Ease of Doing Business
Now in its 17th year, the Doing Business (DB) report measures how easy it is for someone to start and run a company in an economy, using 12 key factors throughout a business lifecycle:
- Starting a business
- Employing workers
- Dealing with construction permits
- Getting electricity
- Registering property
- Getting credit
- Protecting minority investors
- Paying taxes
- Trading across borders
- Contracting with the government
- Enforcing contracts
- Resolving insolvency
Of the 190 countries reviewed last year, only 115 made it easier for entrepreneurs to do business.
Note to readers: this year’s DB score did not factor in Employing Workers or Contracting with the Government when ranking economies.
Top 20 Easiest Countries to Run a Business
|#1||🇳🇿 New Zealand||86.8|
|#3||🇭🇰 Hong Kong||85.3|
|#5||🇰🇷 South Korea||84|
|#6||🇺🇸 United States||84|
|#8||🇬🇧 United Kingdom||83.5|
|#16||🇦🇪 United Arab Emirates||80.9|
|#17||🇲🇰 North Macedonia||80.7|
In the top spot for the fourth year in a row, New Zealand only requires half a day to start a business. Singapore also stands out for having the shortest timeframe when it comes to paying business taxes and enforcing business contracts.
Only two African nations─Rwanda and Mauritius─are listed in the top 50 countries, with Mauritius being the only one to crack the top 20 list.
Latin American economies are noticeably missing from the rankings, as many countries in this region are fraught with bureaucracy and prolonged processes.
Most Improved Scores
Several developed and developing economies made significant strides in 2019 to implement reforms that opened doors for new business owners.
The Doing Business 2020 report shows that the cost of starting a business has fallen over time, particularly in developing economies.
Top 10 Most Improved Economies, 2018-2019
Saudi Arabia made the greatest improvement overall, adding 7.7 points to its score.
Bahrain also made improvements over the most number of factors (9). While Jordan showed improvement in the fewest factors (3), it showed the second highest jump in DB Score.
Gains Among Low-Income Countries
The DB 2020 study also shows that developing economies are making progress: it’s now cheaper than ever before to run a business in developing economies.
However, a significant disparity still remains when we consider the difference in business costs between high-income and low-income economies.
An entrepreneur starting a company in a low-income economy will spend about 50% of per capita income (PCI) to launch a venture, whereas an entrepreneur in a high-income economy spends only 4% PCI to accomplish the same task.
Put another way, entrepreneurs located in the bottom 50 economies spend an average six times more to open a new company as those in a high-income economy.
Entrepreneurship and Economic Growth
Generally, more entrepreneurs will enter a market where they can easily conduct business─adding more value to local economies.
While the rankings clearly illustrate the link between ease of doing business and economic growth, there are still significant barriers in place that not only deter entrepreneurship but also inhibit a relatively simple strategy for growth.
Visualizing the Stages of Startup Funding
About 1,500 companies are founded daily, but how does the typical startup get financed? This creative graphic uses pie to explain startup funding rounds.
About 1,500 new companies are founded every day.
However, only a fraction of these entrepreneurial pursuits will eventually operate on a grand scale. With many of these companies propelled by venture capital funding, how do investors provide the cash—and get a piece of the startup pie?
Pie in the Sky
Today’s creative infographic from Fundera uses pie to visualize each stage of startup funding, from pre-seed funding to initial public offering.
It’s worth noting that numbers presented here are hypothetical in nature, and that startups can have all kinds of paths to success (or failure).
In the pre-seed funding round, the founder(s) pitch their business idea to potential investors. These are typically friends, family, angel investors, or pre-seed venture capital firms.
Since there is likely no performance data or positive financials to show yet, potential investors must focus on two primary features: the strength of the idea and the team.
The biggest factor in our decision-making is always the founding team […] that’s what success lives or dies on in this industry: the ability for founders to make really quick, good decisions.
At this stage, both the level of risk and potential payoff are at their highest.
After the initial stages, seed funding—the first official funding round for many companies—takes place. Entrepreneurs use the funds for market testing, product development, and bringing operations up to speed.
By this point, investors are generally looking for the company’s ability to solve a need for customers in a way that will achieve product-market fit. At this stage, ideally there is also some level of traction or consumer adoption, such as user or revenue growth. The level of risk is still quite high here, so investors tend to be angel investors or venture capitalists.
In each series funding, the startup generally raises more money and increases their valuation. Here’s what investors tend to expect in each round:
- Series A: Companies that not only have a great idea, but a strategy for creating long-term profit.
- Series B: Companies generating consistent revenue that must scale to meet growing demand.
- Series C (and beyond): Companies with strong financial performance that are looking to expand to new markets, develop new products, buy out businesses, or prepare for an Initial Public Offering (IPO).
Private equity firms and investment bankers are attracted to series C funding as it tends to be much less risky. In recent years, startups have been staying private longer. For example, Uber obtained Series G funding and debt financing before going public.
Initial Public Offering
Once a company is large and stable enough, it may choose to go public. An investment bank will commit to selling a certain amount of shares for a certain amount of money.
If the IPO goes well, investors will profit and the company’s reputation gets a boost—but if it doesn’t, investors lose money and the company’s reputation takes a hit.
Here’s how the example investment amounts break down at each stage:
|Pre-Seed||Seed||Series A||Series B||Series C||IPO|
|Amount Invested||< $1M||<$1.7M||<$10.5M||<$24.9M||<$50M||<$10.5M|
|Average Equity Stake||10-15%||10-25%||15-50%||15-30%||15-30%||15-50%|
An investor’s equity is diluted as other investors come on board, but their “piece of the pie” usually becomes more valuable.
The Venture Capital Funnel
How likely is it that a startup makes its way through the entire process? In a study of over 1,110 U.S. seed tech companies, only 30% exited through an IPO, merger, or acquisition (M&A).
Companies that reach a private valuation of $1B or more, known as unicorns, are even more rare at just 1%.
At each stage, natural selection takes hold with fewer companies advancing. Here’s a look at the entire funnel, with the “second round” generally corresponding to a series A stage, a “third round” generally corresponding to a series B stage, and so on.
Source: CB Insights
Notably, 67% of the companies stalled out at some point in the funding process, becoming either dead or self-sustaining. While startups carry a high degree of risk, they also present opportunities for substantial rewards.
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