In the competitive world of entrepreneurship, the golden rule is "sink or swim". Establishing yourself as an Elite entrepreneur is not easy, as 56% of startups that were founded in 2004 have already failed. But, those that survive - or "swim" - float on to reap the rewards of success and glory.
This Do or Die way-of-things is not surprising. You either know the cash-making secrets of entrepreneurship or you don't. Because of the critical importance placed on knowing these secrets, Elite Daily has collected the ten most important ones for your convenience.
What's more is that these secrets are not just told, but exhibited, through anecdotes from real life, everyday entrepreneurs in the pursuit of success.Without further adieu, here are the top ten billion-dollar start-up secrets:
1. Test Your Concept
Example: Brad's Raw Foods (Pipersville, Pennsylvania)
Founder: Brad Gruno, 52
Sales: $3 million in 2011
The vision for Brad's Raw Foods came about after its founder lost 40 pounds on a raw-food diet by making his own raw chips from kale, beets, sweet peppers, and other vegetables. Eventually, Gruno thought the homemade chips had the potential to be a great business concept. But Gruno didn't just trust his own instincts, so he decided to do extensive market testing by offering samples at different regional supermarkets.
Customer feedback from the samples was enthusiastic and helpful. Being data-driven, he adjusted recipes, introduced new flavors, and gained the confidence to pitch his product to local mom-and-pop health-food stores, and then to his local Whole Foods Market.
Gruno now produces 17 different varieties of chips for 90 Whole Foods stores. Gruno's willingness to "get out of the building" and test his idea before launching his company is a rare and valuable trait.
Instead, most entrepreneurs suffer from premature scaling: they hire too many people too early, before they know anything."
2. Always Be Closing
As soon as Brad's Raw Foods started gaining traction in health-food stores, Gruno hired a production manager to free himself up to make more sales calls. Gruno knew he would be the brand's best salesperson, given his personal story of following a raw diet.
A lack of sales focus often keeps startups from quickly growing revenue. Simply put, if you are not closing deals and making sales, you cannot make money:
Some entrepreneurs are just loving their beautiful, shiny product and spending all day on social networks instead of remembering that it doesn't matter until you've closed that deal and develop a sales channel. You need to be able to manage a sales organization and have a mechanism for getting your product out there."
3. Be Persistent
The state of Pennsylvania didn't want to issue Brad's Raw Foods a commercial food-handling permit because the raw chips weren't cooked at a high, germ-killing temperature. But after six months of grilling by health authorities, Gruno prevailed: the state created a new food-handling category to accommodate his business.
No one had ever done this in Pennsylvania. But I just kept answering everything they shot at me."
4. Listen To Customers
Example: Shoes of Prey (Australia)
Founders: Jodie Fox, 29; Michael Fox, 30; Mike Knapp, 30
Sales: Over $1 million in 2010
When Shoes of Prey, a design-your-own-women's-shoe website, launched in late 2009, the founders made some fast changes as they learned of customers' problems:
We quickly realized two important styles were missing: ballet flats and ankle boots. We also hadn't named our color swatches, so people were having trouble understanding what color they were working with."
5. Clarify & Emphasize Your Value
Shoes of Prey's products run for $200 to $300, which is a great price for custom-made shoes. But at first, the website did a poor job of explaining what a good value the shoes were for the money. However, sales skyrocketed as soon as the website began highlighting how each pair is unique and made to order.
6. Social Media Is Your Best Friend
To generate buzz about its footwear, Shoes of Prey hired popular shoe-loving, viral video blogger Blair Fowler (aka JuicyStar07) to hold a contest giveaway. Contestants had to design a shoe on the site to enter, resulting in 200,000 site visits in a single day.
Fox anticipated about 5,000 entries, but the video received more than 700,000 views, and 90,000 people entered. The next step: the team quickly added social "share" buttons so visitors could show their designs to friends on Facebook and other platforms, adding more promotional reach.
Sales topped $1 million in the company's first full fiscal year.
7. Learn From The Failures Of Others
Example: PetFlow (NYC)
Founders: Alex Zhardanovsky, 33; Joe Speiser, 32
Sales: $15 million in 2011
Despite the famous dot-com era flameout of Pets.com, when Joe Speiser and Alex Zhardanovsky researched the online pet-goods space, they saw opportunity. After speaking with the CEO of pets.com to figure out what not to do, Alex realized that orders were often "one-off rather than reoccurring."
This meant they would need to carry low quantities of many different products. PetFlow offered 4,000 varieties of pet food for regular, monthly delivery. The recurring-purchase model helped PetFlow keep inventory down, buy smarter, and negotiate lower shipping costs.
Launched in June 2010, PetFlow racked up its first $1 million in sales within the company's first few months. By year's end, revenue topped $1 million a month.
8. Never Back Down On Price
Zhardanovsky resisted the temptation to cut prices to drive more sales volume. Getting pet food delivered is a valuable service, and he's found customers are willing to pay more for it. That's savvy thinking, says Kauffman's Seguin, who notes that underpricing endangers the survival of many startups.
You'd be terrified by most startups' profit margins. They're often around 1 percent."
9. Ride The Trends
Example: RumbaTime (NYC)
Founders: Joe Anto, 32; Drew Deters, 31; Jay Hartington, 32
Sales: $2.3 million in 2010
Drew Deters, Jay Hartington, and Joe Anto noticed the hot trend of brightly colored, affordable, silicone-banded watches while vacationing in Italy. Upon their return, the trio founded RumbaTime to bring the style to the United States.
After getting exposure from sending watch samples to national fashion magazines, celebrities including Jaime Pressly and Snoop Dogg soon sported RumbaTime watches, too. The media attention made RumbaTime an instant hit, and the company reached the $1 million sales mark in August 2010.
Magazine editors were looking for things that were affordable, but fashionable enough that they'd be worn by somebody who has $1,000 to spend on a watch. We fit right into that."
10. Don't Sit On Your Ass
As soon as RumbaTime saw early success, the company began creating more innovative lines. Its newest style is the VanDam GO watch, which includes an embedded near field communication payment chip and emergency medical identification.
Adding the near field communication chip within a watch puts a really interesting spin on it. It'll get people to look at their other product lines, too."
Ryan Babikian | Elite.