How to Build a Successful Business: From Freelancing to 7-Figures
Building a successful business requires more than hard work. It’s an entrepreneur’s ability to overcome obstacles and think outside-the-box that is ultimately responsible for turning a dream into a profitable business.
Are you currently a freelancer wondering how to build a successful business?
Before you take the plunge, let me be clear: freelancing is not the same as being an entrepreneur.
Those who make the transition from working in the corporate world to being a freelancer often think they have struck gold. However, freelancers are still working in exchange for a salary. If a freelancer gets sick, he or she doesn’t work, and therefore doesn’t get paid. Often, many freelancers end up working longer hours and dealing with a higher degree of uncertainty, all in the name of working for themselves.
Achieving real financial gain as a freelancer can be very limited. All you can do as a freelancer is search for more lucrative deals and increase your rates. You are unlikely to create true value for yourself. Real value is found by those who transition from freelancing to owning a business.
The definition of true financial independence and success has always been the same across continents, disciplines, and career paths: build a system where others’ work produces revenue to cover costs and provide additional profit.
Seth Godin beautifully summarized this point:
“Freelancers get paid for their work. If you're a freelance copywriter, you get paid when you work. Entrepreneurs use other people's money to build a business bigger than themselves so that they can get paid when they sleep.”
The move from freelancer to entrepreneur is no small feat. It requires a ton of work, accompanied by dedication, the ability to cope with rejection, thinking bigger than yourself, and much more. If it was easy, everyone would be an entrepreneur. The hard fact is: only 18% of first-time business owners are successful.
This article will discuss the top 11 reasons Digital Authority Partners went from passive income to a $3.5 million company in two years. Specifically, I will discuss the strategy, staffing, and operational decisions that brought us success. We believe that these same factors are critical to the success of any new business.
Having a strategic vision, along with the discipline to execute and the courage to change course, is the foundation upon which a successful business is built.
1. Have a strategic vision
A vision is an aspirational idea that will guide how a company is propelled into the future. It must be tangible but also inspirational. The people around you need to understand it and align with it. No matter the business, you must be able to define that vision and constantly preach it, consistently and with conviction, both to your customers and your employees.
Many business owners have a justification for their business and how they make money. That’s the freelancer model. When you own a business, success isn’t solely contingent on getting paid. It’s contingent on making sure the people you employ know they are part of something greater while working for your company.
Unfortunately, at most companies, even the highest level executives don’t know or understand the vision. Statistically, only 14% of employees understand their company’s vision/strategy.
[bctt tweet="Only 14% of employees understand their company’s vision/strategy." via="no"]
A vision sets the context for all decisions and provides rationalization when taking somewhat risky growth opportunities. It sets the guardrails for decision making and provides a framework to assist in making the right calls. It also helps the leadership team when making decisions; i.e. entering a new market, taking a new opportunity, adding new service, etc.
Strategic visions should be:
- A guiding light for employees
- Specific but not constraining
- Able to provide a future landscape
Setting your vision requires truly understanding your company’s value and knowing what sets it apart — a conviction about why your company should exist, and what real benefit it brings.
For example, at DAP, we exist to help companies create amazing digital experiences for their customers in order to drive real business value.
2. Work 16 hour days
I am a huge believer of Elon Musk’s philosophy: in order to be successful, you need to work 16-hour days. If you work those hours and you work smart, you will be far ahead of your competition. Most people have a distorted view of entrepreneurship. In popular culture, you see the likes of Mark Zuckerberg, Larry Page, or Jack Ma. The first thing that comes to mind when thinking of these guys is that they “made it”. That they’re worth billions. This tends to be followed by the question: if they can get there, why can’t I?
Everyone wants to be rich, but most don’t want to do the work to get there. The simple reality is that more than 60% of the billionaires in America are self-made. They got to where they are by working hard, around the clock, with limited to no financial support to start their businesses. Above all else, It takes hard work to succeed in life and business. Don’t start a business if you’re not willing to put the time in to become successful.
3. Delete “change fatigue” from your vocabulary
I first heard the phrase “change fatigue” last year from my one biggest clients. He was trying to do a complete overhaul of his company’s digital platform and his direct reports were complaining about “change fatigue.” Or to put it bluntly, they were fed up with all the changes occurring. When you’re an entrepreneur, change is the most constant element on which you can rely. The ability to effectively set, enact, lead, and cope with change is your differentiator.
Digital Authority Partners is no exception to this concept. We started out by providing content strategy and digital strategy services to our clients. We then expanded services to include development, analytics, and marketing. We are now launching a digital magazine, dedicated to executives in healthcare. We’re also developing various software to be sold as a service. Although these changes sound random, they’re not. Each is a response to what we’ve learned over the years, the demands from our customers and the opportunities we’ve seen while working with clients.
It’s our take on ‘seizing the moment’, one idea at a time. “Change fatigue” is for those who end up working for the rest of their lives in a 9-5 job. It’s not for the winners. It’s not for the visionaries. And it certainly is not going to ensure a comfortable retirement.
4. Don’t do it alone
It’s arduous to succeed on your own. I don’t mean this empirically. Data shows that 46% of successful startups who have raised at least ten million dollars in capital had only one founder, versus 32% of companies that had two founders. So starting a business on your own is not impossible or the “wrong” decision. It’s just really demanding, emotionally and physically. Simply starting a business is hard; dealing with failure (of which there is plenty) can be even harder.
DAP was started at my living room table with a friend and former colleague. When we grew bigger, we brought in one more person to the leadership team— someone I knew I could trust and had no doubts would work as hard as the three of us. I will never regret that decision. Having someone else who can make decisions on your behalf, who understands the business as thoroughly as you do, and who can think creatively about how to expand the business is invaluable.
Being an entrepreneur is hard work. It requires vision, knowing your company's true value, and successfully communicating that value to your customers and employees. Be willing to put in the long hours required for success, and be nimble enough to change direction if something isn't working. And remember, don't do it alone.
Your people are your most important asset. Treat them right, and they'll help you succeed.
5. Wait for the right hire
I’ve hired and fired many contractors since 2015. As a company, we didn’t start hiring full-time employees until last year. I’m a huge believer that the first ten employees can make or break your company. Every single person we hired full-time was vetted again and again until we all thought they were the best people we could possibly hire.
When I worked in corporate America, I participated in the hiring process for at least 50-60 employees. The mindset I had then is completely different from how I operate now. When I was a decision-maker in the corporate hiring process, I would almost always say “yes” to hiring a person who was “good enough” for the job. It wasn’t my money or my company. That tended to cost me more time and effort because underperforming workers were hired, having a major negative impact on my own work.
When I started DAP, I swore to myself I would only hire the best possible people and that I would wait as long as it took to find the perfect fit. So far, I have kept that vow.
6. Hire based on potential, not experience
Last year, I remember listening to a podcast called Equity, hosted by Alex Wilhelm at Crunchbase (full disclosure: Alex and I were once roommates at The University of Chicago). In one of the early podcasts, Alex and one of the guests were talking about a corporate practice that haunted me for a while: companies hire men based on potential and women based on experience. It weighed on me because I realized that in order to be successful, DAP should only hire people based on potential, regardless of gender, religious beliefs, sexual orientation, or race.
So we devised a new hiring practice for everyone joining our team. Instead of deciding who to hire based on an interview, we send all applicants a test. The test is simply a task that has already been completed by a different DAP employee for a client or DAP’s own business. Without looking at the resumes, we rank the test responses as a team and only invite candidates to an interview if they did the task better than we did it internally. This not only led to getting good, quality people on the team, it also led to hiring people we would never have considered if we had only looked at their resumes (because on paper they often had backgrounds that were not in line with the positions for which we wanted to hire).
Bottomline: for us, this practice has worked exceptionally well. I’m proud of each and every person on my team. Furthermore, I am excited to see how their potential will result in a real ROI for our business.
7. Let your employees do their job
When you’re in a position of power, it’s very easy to have your way. It is also very easy to create a toxic culture where people are afraid to say what they think. You probably know where I’m going with this: you hire people, then you have to let them do what you hired them to do. Period.
As Steve Jobs once said, “It doesn’t make sense to hire smart people and tell them what to do; we hire smart people so they can tell us what to do.”
Personally, I struggle with this dilemma all the time. Nearly every day, one of my employees comes up with an approach, execution, or idea that I would likely do differently. Every day I have to temper myself from making everyone do things my way.
I take this approach because I want to foster a culture in which my employees can make their own decisions and come to me for counseling, rather than approval. It’s a culture in which each person can become an entrepreneur. Where they can truly own their decisions and outcomes. Ultimately, the people we hire will be better at making certain decisions than I will ever be. This won’t be true in all cases, but I want to make sure that my employees always feel empowered by and trustful of their decisions.
I choose to allow my employees to explore their ideas and rarely overrule them. You need to trust the people you hire. When treated well, they will have the best intentions to help you build a successful business.
8. Let people be themselves
My first job out of grad school was for a user research firm in Chicago. I was truly miserable, lasting only two months in the role. On paper, the position was great and the client work was really exciting. Unfortunately, it had a horrible work culture. Employees had to dress formally, even though they did not have direct client contact. You had to be there between specific hours. You couldn't work from home and the company often demanded employees work late hours to meet deadlines.
I hated everything about that model and swore to do things differently “when I grew up.”
I was adamant about making the DAP culture incredibly different. My employees know they can be themselves at all times. We often work under tense conditions, so having an easy going work environment is something I sought as instrumental. Jokes are allowed and even encouraged (sometimes even those that are not necessarily appropriate). They know they’re allowed to work from anywhere in the world as long as they do their job well. We don’t have a vacation policy; you can take as many vacation days as you want, provided that your work gets done. There are no set work hours.
Contrary to the popular belief that this system can lead to negative effects on the business and work environment, our experiment has worked very well so far. People are happy. They work hard. They have fun. They have the flexibility they need to manage both their work and personal lives.
Our attrition rate is zero. I will take a culture where people can be themselves over anything else (including more money) any day of the week.
Sometimes, the best hires aren't the most obvious hires. Hire for attitude and ability, not the resume. Then, it's up to you to provide your employees with the guidance they need, while giving them the freedom to grow and express themselves in a supportive environment.
In the beginning, all entrepreneurs must be comfortable with being a Jack (or Jill) of all trades.
9. Wear every hat
When you open your own business, you cannot have only one role. Being an entrepreneur means no job is too small or too big. In my role, I do as much strategy work to propel us into the future as I do tactical work to get new clients, increase our marketing efforts, clean up presentations, help employees prepare for an event or speech and much more. This is especially critical to success in the beginning, since it is likely you won’t have enough employees to accomplish all that needs to be done.
Some people might take this to an extreme and end up micromanaging their teams. That’s not the point I’m making. My point is simply this: when you own your business, you can’t be in your ivory tower. You need to do whatever it takes to make your business successful.
10. Embrace failure
No matter the business you are in, there will be points of failure. Fearing failure or constantly trying to avoid it is bad juju. The question isn’t whether you’re going to fail, but how and what you will learn from that failure. In short, as a business owner, you need to be at ease with failure.
[bctt tweet="As a business owner, you need to be at ease with failure." via="no"]
If you never fail it means you’re not living life to your full potential: you’re not taking enough risks. To me, a large part of owning a business is that you can finally try out different hypotheses to see what works and what does not, learn from your and others’ mistakes, and (ideally) get better at your job. It also means you need to ensure that your employees understand you will not hold it against them if/when they fail.
Failure comes from taking the initiative. I’ve seen this with my employees over the last two years. If something goes wrong, they immediately panic and are afraid of the consequences. My response is always the same: it’s going to be fine, we’ll figure it out. We will. One failure will rarely break your business. However, it is almost a sure bet that you will break your business if you stop trying out new ideas.
11. Pivot strategically
As I mentioned earlier, DAP started as a content strategy company. It then evolved into an end-to-end digital strategy and implementation agency. Now, we’re moving towards a SaaS model and launching a media company in the healthcare space.
Each of these strategic moves is the result of an untapped opportunity we uncovered in our day-to-day business operations and client work. At first glance, the initiatives we’re working on could not look more different from each other. Internally, however, each new platform, solution and service we launch is intimately connected to a business objective and an internal initiative designed to increase our core business and help us grow exponentially in the fields where we are active. Looking more carefully, one can see how these alterations intertwine and mesh with each other.
The ability to both pivot and expand strategically is key to the success of any business. Often, companies do not change gears until it’s too late, or until they’re forced to change due to external pressures. This is why I take it upon myself to be bold and proactively identify ways we can pivot. Pivoting is simply realizing that the context of our earlier assumptions have changed or that there are ways to achieve previously unknown business objectives. When that happens, one simply has to rise to the new opportunity and make the changes needed to adapt to the new reality.
Starting and running a business requires you to wear many different hats. From accounting to hiring, you have to be willing to do it all (at least in the beginning). And don't be discouraged if things don't necessarily go your way at first. The key to real growth is often taking chances, failing, and then learning from those mistakes.
There’s something particularly alluring about being an entrepreneur. It’s the “vive la résistance” attitude. Becoming an entrepreneur is akin to escaping the prison of corporate life. Even so, the more successful my company becomes, the more I realize how hard it is to make it as an entrepreneur. It takes a tremendous amount of work. So much sweat goes into building a successful company, and it takes an enormous toll on your emotional (and sometimes physical) health — especially as you attempt to balance your drive to become successful with trying to have a vaguely normal personal life.
Success forces entrepreneurs to exit their comfort zones. When you’re a freelancer, you have complete control over your workload and quality of work. When you transition to owning a business, some — if not most — of that control gets evenly distributed within the company. That is, if you’re doing it right.
While operating outside of your comfort zone, you need to be a cheerleader for your employees, who have also taken a risk in joining a new company. Everyone has to be confident of everyone else’s skills and talents (and let each other know it). On top of this is the continual flux of change, as the business opens up to new options and abilities.
When one well, a loosely coherent structure can be discerned through all the flotsam and jetsam of creating new paths. All the levels on which a new business expands and strengthens itself rest on the shoulders of the founder(s). That responsibility must be a motivator for entrepreneurs, not a weight. Your business, ultimately, should make sails, not anchors.
In this article, covers 11 tips I learned on my own, things I wish someone would have told me at the outset. With a little more knowledge, I would have made fewer mistakes along the way. I’m sure there are points I have missed in the process, and more mistakes are just a short distance down this road. Even so, I am confident that if you incorporate each of these 11 elements, you will be off to a much better start as you learn how to build a successful business.