It is the ultimate million-dollar question. How does an aspiring entrepreneur build a healthy business to the tune of seven-figures a year?
Someone who knows is Peter Moriarty, the founder of IT consultancy firm itGenius. “I pretty much started selling anything I could get my hands on including really shiny stones found in my neighbour’s letterbox, sold for about 50 cents,” he jokingly recalls.
Moriarty didn’t encounter computers until his mid-teens when he got his hands on one needing repair, and taught himself how to fix it.
The 24-year-old, who launched his first business at 15, declines to cite figures except to say “we have doubled revenue almost annually for five years”.
His top two rules of making business fortune are:
- Back yourself
“You must have strong self-belief that no matter what dreams you have you can go out there and achieve them. I was fortunate my parents encouraged this, as it is essential to survival in business.”
- Never chase riches
It is the biggest irony of self-made wealth: money cannot be your chief motivation.
“You must only do it if it is something you are inspired by as this makes you more free to chase your goals in a way that money alone cannot; hopefully you learn that one sooner than later,” Moriarty says.
Serial entrepreneur Hamish Petrie started taxi service app and payment platform ingogo in 2011, to enable direct bookings and payments between passengers and driver.
It is his fourth start-up since his early 20s, and it began “with the pretty audacious goal” of replacing long-standing incumbent “Cabcharge and its entire network”, says 40-something Petrie.
Two years’ on and ingogo has achieved about 15 per cent penetration of Sydney’s taxi booking network.
Today the business has thousands of drivers using its system and has raised $3.7 million capital from various investors including Facebook Australia and New Zealand managing director William Easton.
Petrie’s top advice to future business tycoons is:
- Find solution/market balance
It is all-too-common for business to fail because insufficient market research has taken place.
“You must solve a real market problem, that’s essential, but still find its market is just not big enough to sustain your business; make sure it is.”
- Know who you are
Hone “laser sharp focus” on what your business is and don’t try to be all things to all people, Petrie says.
Jason Smith, founder of Back In Motion Health Group, started his physiotherapy business in 2000 from his home garage. He initially invested $316 in the start-up.
“I was 24 and my wife of (then) one year said to me ‘are we ever going to get that money back’,” Smith says.
“I didn’t know but knew I was driven to revolutionise part of the health industry I saw desperately needed it.”
And he did. Today his integrated health service company has 60 locations, 40 franchises and more than 350 staff. Smith is a finalist in the Ernst & Young Entrepreneur of the Year Award 2013. His biggest tips for tomorrow’s moguls are:
- Employ like-minded people
It is not enough to find talented people, they must be on the same impassioned page.
“It is one thing to have a business plan but far more compelling to have people (on your team) who also feel passionate, whatever the mission.”
- Make your own decisions
Millionaire entrepreneurs never let others call the big shots.
“It is important to get advice, incorporate others’ ideas, but always preserve the right to make your own decisions,” Smith says.
- Don’t prematurely scale
It is tempting “to push the growth button” early if business is booming, but Smith says the reason many budding entrepreneurs come unstuck is they go too big before testing their business model works.
- Build a voice
Smith stresses the importance of building a message not just a brand: “If you really want to succeed in a scaled business you need to develop a perspective, a solution to an ongoing market challenge or problem and become an authority on it.”
- Keep control in early years
The first years of biz can be brutal: little cash and big costs. But Smith urges start-ups to resist the urge to sell interests to outside parties.
“Try not to sell assets just to raise some short-term capital. Scrimp and live within your business’s means; even if your first million takes a little longer, it is worth it.”