Built, Not Born

“Entrepreneurship is about taking calculated risks and being the master of your own destiny. Are you ready to take the leap?”

1. Assessing Your Entrepreneurial Fit

Before you embark on your journey, you must evaluate if entrepreneurship is really for you. Owning a business requires more than just an idea—it demands endurance, resilience, and the willingness to navigate through uncertainty. Tom Golisano suggests that understanding your appetite for risks and drive can help you make this decision wisely.

Reflecting on your motives is essential. Are you passionate about the industry or market you aim to serve? Passion fuels persistence, especially when the going gets tough. Beyond enthusiasm, you need specific knowledge of the target customers, market needs, and potential challenges. Taking a calculated rather than emotional approach ensures you’re aligning your goals with reality.

Additionally, applying entrepreneurial thinking doesn’t always require starting from scratch. Even in a traditional job, you can identify problems and deliver innovative solutions. This outlook not only boosts your career prospects but also lays the groundwork for entrepreneurial success should you decide to build your own path.

Examples

• Golisano started Paychex after deeply understanding the payroll market and recognizing unmet needs.
• Entrepreneurs who underestimate market realities often face unnecessary pressure and failure.
• Business-minded employees can drive value by spotting inefficiencies in their companies and addressing them like independent entrepreneurs.

2. Simplifying Finances and Operations

Running a business isn’t just about passion—it’s about hard numbers. Golisano advises business owners to answer this key question: How many clients do I need to cover costs and earn profits? This simple yet powerful approach ensures decisions are grounded in reality.

Keep your financial planning concise. Golisano encourages entrepreneurs to summarize their profit and loss forecast on a single page. It helps to focus on the essentials rather than getting distracted by less critical details. To prepare for growth or secure funding, you must also understand cash flow and pricing intimately, guided by accurate data rather than emotion.

Lastly, picking the correct business structure—be it corporation, partnership, or sole proprietorship—is just as important as product development. Consulting legal and financial professionals ensures you reduce taxes and avoid future complications, setting up a firm foundation for your company to grow sustainably.

Examples

• Golisano meticulously tracked financials to know exactly when it made sense to scale Paychex.
• Many small businesses fail because they misjudge how much revenue they need to stay afloat.
• Consulting tax advisors early often leads to significant savings as businesses expand.

3. Securing Startup Capital

Funding is lifeblood for startups, but securing it requires careful planning. Golisano shares how he began Paychex with just $3,000, combining his personal funds with thoughtful partnerships. Starting small and scaling strategically often delivers better outcomes than overextending at the beginning.

Pivoting to friends, family, or private lenders demands clear communication of the terms and expectations to avoid disputes later. If you involve traditional equity investors, be mindful of their priorities. Venture capitalists often operate on short timelines and may not align with your personal goals—proceed with eyes open.

Personal investment communicates belief in your vision, reassuring others to back you. However, having robust financial controls is equally vital to demonstrate responsibility. Before seeking further funding, master the essentials of accounting to properly allocate resources and validate your financial viability.

Examples

• Some Paychex partners sold their homes to invest, highlighting commitment and shared vision.
• Misaligned expectations about repayment terms frequently cause stress among family-backed ventures.
• Golisano’s transparency with investors helped secure additional funding without disputes.

4. Creating Consistent Cash Flow

Success in business is about more than one-time wins. Golisano advocates for recurring revenue streams as the foundation for stability. Think like subscription services, which thrive through ongoing customer relationships rather than fleeting transactions.

Diversification is another key to staying relevant. With 75% of products becoming obsolete within five years, repurposing assets and introducing complementary solutions can hedge against market changes. Paychex, for example, expanded into HR services alongside payroll to provide customers more value without a massive cost increase.

Avoid putting all your eggs in one basket by relying too heavily on any single customer. Diversifying your clientele not only stabilizes cash flow but also reduces vulnerability to sudden shocks if a big client leaves.

Examples

• Paychex’s recurring payroll client base became a durable revenue model for the company.
• Microsoft’s introduction of subscription-based Office 365 replaced one-time software purchases.
• Businesses with a single major client risk collapse if that client departs.

5. Hiring for the Right Attitude

It’s easier to teach skills than to change attitudes. Golisano firmly believes that hiring people with the right mindset—enthusiasm, respect, and creativity—is the key to building a strong culture. Training then transforms these recruits into assets.

Establishing a positive workplace culture starts at the top. Leaders set the tone, whether it’s fair treatment, collaboration, or innovation. Consistently reinforcing these values during hiring, onboarding, and beyond creates an environment where employees thrive and grow.

Building a team also requires discernment during interviews. Techniques like the pregnant pause can reveal a candidate’s true nature under pressure. And while offering competitive salaries attracts top talent, incorporating performance-based incentives ensures people stay productive.

Examples

• Paychex prioritizes respectful treatment, starting from its training programs.
• Observing candidates’ interactions with assistants or junior staff during interviews reveals their attitude.
• Performance-based incentives at Paychex keep employees motivated and solutions-oriented.

6. Forging Win-Win Deals

The best agreements benefit all parties involved. Golisano recommends entering negotiations with empathy, understanding what the other side values, and finding common ground without compromising your business needs.

Avoid unnecessary intermediaries like lawyers unless absolutely necessary. If used, they should only refine the agreed terms rather than introduce complications. For long-term vendor relationships, trust and mutual support build lasting value.

Silence is a surprisingly effective negotiation tool. Pausing creates discomfort, often prompting the opposing side to make additional concessions. Whether in victory or defeat, professionalism builds goodwill and leaves doors open for future collaborations.

Examples

• Golisano and his first wife resolved their divorce amicably by focusing on mutual gains.
• Establishing direct relationships with suppliers reduces dependency on costly middlemen.
• Pregnant pauses during Paychex’s negotiations often yielded better terms from vendors.

7. Crafting a Strong Reputation

Your business is only as good as its reputation. Customers and partners are drawn to companies they trust. A memorable brand name, combined with consistent and ethical behavior, ensures people remember you positively.

Actions speak louder than slogans, though. Paying suppliers promptly, treating employees well, and addressing customer complaints effectively all contribute to how your company is perceived. As crises will inevitably arise, handling them promptly solidifies trust.

Networking within your community is just as important. Joining a chamber of commerce or connecting with local organizations can open unexpected doors while strengthening your reputation in the region you serve.

Examples

• Paychex became known for underpromising and overdelivering to clients.
• Prompt crisis resolution builds lasting customer loyalty, even after initial problems.
• Golisano’s local community involvement helped expand his reach and influence.

8. Planning for the Inevitable Exit

Every founder faces the day when they must step away. Planning for this transition early ensures both personal clarity and business continuity. Waiting for a healthy financial moment to sell yields better valuation and opportunities.

Discuss how you’ll be paid—cash, stock, or both—and weigh each option’s benefits. If you intend to stay involved, define your post-sale role clearly. Alternatively, selling completely allows you to move forward without lingering obligations.

Remember, life is about balance. Beyond business, fulfilling personal relationships, hobbies, and relaxation are just as important for long-term happiness as entrepreneurial success.

Examples

• Golisano transitioned to chairman of the board, helping Paychex grow without day-to-day responsibilities.
• Business owners who sell in a slump often regret low valuations they could have avoided.
• Defining the terms of post-sale involvement prevents misunderstandings with new owners.

9. Balancing Vision with Realism

Passion drives you forward, but analytics steer you in the right direction. Golisano insists that decisions guided by clear numbers and practical evaluations lead to lasting achievements.

Break larger aspirations into achievable goals. Unattainable targets breed frustration, while steady progress builds momentum. By continually learning from both success and mistakes, entrepreneurs can adapt and grow.

Further, surround yourself with trusted advisors. Their external perspectives often illuminate blind spots and refine your strategies, ensuring you stay grounded while pursuing ambitious goals.

Examples

• Paychex began as a modest operation but grew because of careful, sequential scaling.
• Detailed cash projections prevented overinvestment during early Paychex expansion stages.
• Entrepreneurs using third-party advisors often avoid costly missteps others miss.

Takeaways

1. Evaluate your appetite for risk and passion before starting a business.
2. Build a recurring revenue model to ensure consistent cash flow and reliability.
3. Plan your exit strategy early to maximize the value of your business and personal fulfillment afterward.