Lillian Vernon's Tips for Entrepreneurial Success
by Lillian Vernon
This year catalog giant Lillian Vernon Corporation celebrates its 50th year in business. Recently we talked with Ms. Vernon about her success and what it took to grow her catalog from its beginnings at her kitchen table to the multi-million dollar business it is today. Read this interview, and don't miss the bonus at the end where she shares her own tips for entrepreneurial success!
Fifty-one years ago, I never dreamed my mail order business would grow into a company with sales over $287 million. I had a dream, supported by my optimistic spirit and a strong commitment. As an entrepreneur since 1951, I have gained a lot of experience. Here are my tips for building a thriving and enduring business.
- To be a success, you must be passionate about your work. Half-hearted enthusiasm will not sustain you during the many challenges that will lie ahead. Your passion must translate into a labor of love. For your developing business to succeed, you must focus all your energies and attention on your company, and accept the demands and sacrifices it will place on your personal life.
- Success is never an overnight proposition. You must commit to long-term goals and tackle problems head-on. Problem solving requires careful analysis. Understand however, that once you solve one problem, other obstacles will inevitably arise. You must be prepared to cope with business problems in a calm and analytical way, and be able to take care of multiple details.
- Carefully study your business prospects, including sources of financing, and other ways of financially sustaining your company until it shows a profit. Develop best and worst case scenarios to guide you through the first few years so unexpected setbacks won't weaken your company. Network with other small business owners and seek their opinions and advice.
- Until you have acquired experience, keep your business framework relatively simple. Begin on a small scale so you can successfully introduce your product or service, target your market, and keep costs to a minimum. Concentrate on what you can realistically accomplish without being distracted by areas you lack experience in.
- Carefully study your competition so your business will offer consumers something unique. Your product or service should fill a special niche, or else the competition will be hard to counter. Understand your customers' needs and deliver quality service so they will return. Customer loyalty is your most important asset.
- Learn how to read balance sheets and income statements. You don't need an M.B.A. to understand finance. A local college or online accounting course is great for beginners. However, don't underestimate the fact that you will need to hire a certified public accountant as your business grows. Your accountant can calculate figures, but you must be able to interpret them so you can respond quickly and appropriately.
- Adopt a conservative spending rule. Do not spend your hard-earned cash on anything but true necessities. Remember, there are bound to be inevitable cash crunches, and if you don't have adequate reserves, or your business is insufficiently established to borrow money from a bank or lending agency, it may fail.
- Understand the art of management. Some entrepreneurs are so creative and committed to their business, they fail to delegate responsibilities to others, which can lead to failure. Hire talented employees who can carry out the nuts and bolts of your business. Let them share responsibility in the decision-making process. Keep an open mind, hear their ideas and suggestions first before you turn down their proposals. You can oversee all aspects of your company while they are involved as well.
- When your company begins to grow and prosper and you are feeling gratified, don't take a step back and rest on your laurels. Growth is a double-edged sword. Problems often strike at the moment of explosive growth. Rapid growth can eat away at profits. You must be prepared to hire more staff to deal with an increase in business. You might need to make a significant investment in sophisticated computer technology or a warehouse for storage and fulfillment. This is the moment when a cash infusion might be necessary. If your books show that you have run your company carefully, your cash flow can support interest payments, and you understand good business practice, you will be an excellent candidate for a bank or Small Business Administration loan.
- Set your goals and priorities by preparing a long-range business plan. Careful planning is the key to success. By nature, entrepreneurs are optimists, but it can be dangerous to have an unrealistic view of your company and competitors. Step back and take a close look at your business with complete honesty and objectivity. Don't ignore any flaws, mistakes, or deviations from your original plan. Correct strategies that are not working, and enhance the areas that are helping your business to flourish.
Lillian Vernon founded The Lillian Vernon corporation. She started the business in 1951 on her kitchen table, and grew it into a company that reached $287 million in sales annually. She sold the business in 2003 to private equity investors. For additional information visit the catalog company's web site at http://www.lillianvernon.com.