At 21, most college students aren’t out pounding the pavement in support of their nascent tech support businesses, or using their spare time to learn cutting-edge skills (and earn the certifications to prove it) that could boost their value to prospective clients.
As a South Florida college student in the early 2000s, George Otte certainly wasn’t averse to having fun. But he didn’t dally, as many of his fellow students did. At the youthful age of 21, Otte founded a tech support business on a shoestring budget and began building a client base in and around the Miami area. By his 25th birthday, Otte already had more than 100 clients and was well on his way to local tech support dominance.
The subsequent years have been good to George Otte. In fact, he now runs a trio of successful businesses — Geeks on Site, Responsive Answering Service and Phase V — through his Otte Polo holding company.
And his ambitions haven’t quieted: already the premier provider of telephone answering and business fulfillment services for small, midsize, and enterprise-grade clients. Among other opportunities, George Otte is actively seeking acquisition targets for Responsive Answering Service and Phase V.
The bottom line: George Otte is well qualified to provide advice for entrepreneurs looking to build successful businesses. Here are 10 tips from his decade-plus of experience at the helm of growing, profitable companies.
- Start Strong, Stay Diligent
According to George Otte, new business owners need to start with a bang. This means devoting as much time as possible to the business during its first few years of life, particularly when the company is in the “danger zone” prior to consistent profitability.
“Your company should consume all of your energy during the first few years,” says Otte. Once the company is on sure footing, you can begin to cautiously step back and reward yourself.
- Remember Who Matters Most
According to Otte, business owners should never forget the two groups of people who matter most: their customers and their employees. Without the former, cash flow dries up. Without the latter, product and capabilities suffer. In an increasingly competitive market for labor and talent, not to mention a marketing environment populated by increasingly savvy consumers and corporate decision-makers, it’s critical to treat both groups as well as possible. Your industry, competitive landscape, and business philosophy will determine how this looks for your company.
- Learn to Delegate as You Grow
New business owners usually lack the resources to deck out a dozens-strong team from the get-go, particularly when they’re bootstrapping. That means you’ll likely have to wear multiple hats in the early going. And as Otte noted in tip #1, you’ll need to devote all your spare energy, time, and talents to your business anyway.
You also need to recognize when it’s time to delegate. At a certain point, you’ll be faced with a dichotomous choice — which may only be apparent in retrospect — to either continue taking care of everything yourself or to begin delegating to trusted, skilled subordinates. According to Otte, entrepreneurs who choose the latter tend to gain market traction, allowing them to scale and exit faster.
- Focus on High-Value Projects
Delegating doesn’t mean stepping back completely. If you can build a strong management team to which you feel comfortable delegating important tasks, you’ll have more personal bandwidth available to devote to high-value projects, initiatives, and long-term goals that drive growth and boost your company’s competitive advantage. You take every opportunity to maximize your team’s productivity, so why not do the same for your own?
- Protect Intellectual Property
If your company relies on proprietary products or processes to support its business model, you need to make sure they can’t be copied, imitated, or ripped off. Before you start selling, conduct a thorough patent search to determine whether any similar processes, systems, or products exist. If none do, or if those that do exist are distinctive enough not to interfere with your operations, file patent applications for all mission-critical pieces of intellectual property.
- Keep Detailed Records
It sounds like a no-brainer, but you’d be surprised how many companies simply fail to maintain accurate employee, inventory, and financial records. This is particularly important for diversified companies like George Otte’s Otte Polo Group, which has numerous subsidiaries that do business internationally.
- Don’t Over-Leverage Yourself
It’s tempting, and often prudent, to seek growth capital. Bootstrapping is difficult in the best of circumstances, and can be difficult or impossible in capital-intensive industries. Make sure you’re keeping your cash-to-debt ratio under control, and do everything in your power to achieve positive cash flow early in your company’s life cycle. Excessive leverage can come back to bite your company in a hurry, particularly if the economy goes south.
- Underpromise, Overdeliver
According to Otte, new entrepreneurs should never make promises they can’t deliver on. Whether you’re issuing revenue projections to investors or laying out a schedule for a pending acquisition, follow the mantra: “underpromise, overdeliver”. Put another way, you need to exceed the expectations you set for your company. Otherwise, you’re apt to disappoint investors, customers, employees, and others that you can’t afford to let down.
- Avoid Excessive Discounting
Discounting is a great way to get customers in the door, but excessive price-cutting can have corrosive long-term effects. If customers come to expect cut-rate products or services, they won’t spring for the full-price version because they’ll assume that the cut rate is actually the full rate. Over time, this devalues your brand, reduces the effectiveness of legitimate price reductions, and hurts your profit margins.
- Learn from Those Who’ve Come Before
No matter what you do for a living, you need a mentor. Having someone to look up to is especially important when you’re the boss of your own world. As the old saying goes, “It’s lonely at the top.” Tap the expertise of someone who’s come before, someone you can trust, to make the experience a bit less alienating and to ensure that you don’t make preventable mistakes.
Are you in the process of starting a business? Which tip do you find most valuable?