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Success is Hard

“It is a big idea and takes us in a whole new direction. Only a few companies in the entire country are doing it, we must go for it!

Jordan (not her real name) was darn near breathless as we talked about her business plan. She retained me a few weeks earlier to help her think through expansion options, ranging from raising third-party capital, giving key employees equity instead of compensation, or selling the company outright. It seemed nothing was off the table.

The fuel for Jordan’s enthusiasm was her belief the company should launch a new set of services that would catapult the company into a blue-chip customer base that signs bigger contracts. “We go from $50,000 customers to $500,000 customers.

The problem is, although Jordan clearly sees the opportunity, she doesn’t have the staff or equipment to execute the vision. Hence the need to raise capital.

An exuberant entrepreneur is usually a sign of one of two things: impending failure or impending success. Early on, it’s hard to distinguish which way it will go. On one hand, Jordan has the client relationships and industry knowledge to genuinely know she is on the cusp of a real and compelling opportunity. On the other hand, Jordan is uncertain whether she can manage the launch of this new business while maintaining the core business that has made her successful for the past ten years.

After forty-plus years in business, I’ve learned that big success is a function of both a big idea and strong execution of the idea. You can’t expect success with just one or the other. If Jordan wants to raise capital to support her vision, she will need a proof of concept to show investors her idea is compelling and that she can execute on it. Starting a business is hard, making a business successful is really hard. Achieving sustainable long-term success is a rare feat.

Entrepreneurs really do say (and do) the darndest things.

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Tennessee Valley Group

Jim is an attorney (non-resident status with the Missouri Bar) and though he no longer practices law, he has read and negotiated enough legal documents to fill a cargo tanker. He has an MBA from Harvard Business School and knows how Wall Street and private equity operates. Jim is a Tennessee Supreme Court Rule 31 listed general civil mediator with tons of experience helping business owners (large and small) work through sensitive problems to achieve winning results. He is the author of "Home Run, A Pro's Guide to Selling Your Business, Seven Principles to Make Your Company Irresistible."

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