Financial success stories are what business legends are made of; entrepreneurs starting their own companies with a few thousand dollars from their life savings and their credit cards. Most of founders fail, but there are the rare ones that succeed to become billionaires.
On the Small Business Radio Show this week, billionaire Tom Golisano, founder and chairman of the Board of Paychex, talks about his keys to success and what he looks for in companies he currently invests. His new book is called “Built, Not Born: A Self-Made Billionaire’s No-Nonsense Guide for Entrepreneurs”. Tom discusses how much he loves entrepreneurs and how important they are to the economic success of the United States.
Business Advice from Tom Golisano
Tom started his career as a salesperson for a payroll processing company that serviced large companies. At the time, no one was offering the same service targeting small businesses. It took him four years to get his first 300 clients! As a result, Tom preaches patience to entrepreneurs. He believes they get overly enthusiastic about their ability to attract new customers and over anticipate their company’s growth. Getting customers to switch from whatever their current solution is harder than they think. In Tom’s case, they had never even considered outsourcing their payroll.
Entrepreneurs need to ask themselves how much money they will need to start their business. As a result they need to make it sustainable. Tom suggests simply writing on one page. Record what sales will be for the next period of time. And include the profit margin on each customer. This helps the entrepreneur. You can determine how much cash flow they will need in the short run.
Tom’s entire corporate philosophy translates into “a good deal for everyone”. As a result, he explains “if they are not getting a good deal from you, they will not stay with you.” For example, he originally combined 17 companies together to create Paychex. All former owners received equity. As a result, they eventually really profited.
He adds only one golden rule to becoming a good manager. “Treat people the way you want to be treated. If you have honesty and integrity, they will follow you.”
More in: Small Business Growth