Knowledge and experience are key to a successful business

Everyone seems to assume that success comes at an early age with people such as Mark Zuckerberg of Facebook becoming a billionaire at the age of 23 having only started his business 3 years before. Or Evan Spiegel who-co founded Snapchat achieving billionaire status at 25, again having only been in business for 3 years. Does that mean it’s too late for you if you are already over 30 or have been in business for more than 3 years?

The answer is of course not. Bill Gates was 31 having taken 11 years to become a billionaire. Elon Musk was 41 and took 17 years. Sir Richard Branson was 41 and took 19 years. Steve Jobs was 40 and took 19 years. Sir Alan Sugar was 68 and took 47 years.

These are just some of the best-known entrepreneurs but there are many other examples where great success has come at a later age and after a longer period of time.

With age comes experience

In a Harvard Business Review in 2018 it was found that the average age of the owners of tech startups was between 29 and 31. However in many other industries the average age is much higher often being over 45. In fact, one comment was particularly interesting. “If you were faced with two entrepreneurs and knew nothing about them besides their age, you would do better, on average, betting on the older one.”

The conclusion as to why this happens was that experience played a critical role and gave the entrepreneur an 85% better chance of success. However, there didn’t appear to be much information on the type of experience, so I am going to give you just my unsubstantiated opinion on this.

Firstly, when we are young, we think we know all that we need to know. We can do it alone, without any one else’s help. We need to be in control and be at the center of everything. It takes time to realise that it is better to have a smaller part of something bigger than 100% of something small or potentially non-existent. Bringing others into your business could have major benefits but there are also risks so make sure you take expert financial and legal advice before signing any share transfers or agreements. Older entrepreneurs appreciate the expertise of others and are more willing to pay for specialist advice.

Secondly, to succeed, you need a wide variety of skills, talents and knowledge. Your particular gifts may be lacking in some fundamental areas and so you may need to take the time to learn those skills perhaps delaying your potential success or even losing an opportunity when a competitor appears first and takes your market share. Alternatively, you can bring in advisers early to fast track you but there is a cost to do this and the best advisers will command significant investment. Again, older entrepreneurs understand the benefits of face to face support and are more willing to invest in that advice.

Employing experience and knowledge

Although you are likely to have a limited budget in the early years of your business, the only way to achieve the success you desire may mean employing others with those skills that you lack. Again, don’t just employ family or people you happen to know. This is a common error and has often caused the demise of an otherwise potentially successful business. Perhaps older entrepreneurs have seen and appreciated the benefit of advice from an experienced HR Consultant in a previous career so are much more willing to involve a specialist to identify and contract with the best people.

Collaborating to gain experience and knowledge

Finally, we have the idea of collaboration. By this I mean partnerships with similar or complementary businesses. Again, I think this is less likely to happen with younger entrepreneurs who perhaps have a greater fear of losing their perceived competitive advantage whereas older entrepreneurs have a greater understanding of not only the benefits of collaborating but the legal protections available too.

Buying in specialist skills and experience

Over the years you will have gained experience and knowledge to run a successful business. You've hopefully employed people with the skills to fill any gaps in your skills and may have forged collaborative partnerships with complementary businesses or organisations. But there will still be specialised areas where you will need to buy in expertise.

Wood and Disney have been Chartered Accountants and Professional Accredited Business Advisors for a long time with many, many, many years of experience behind us. However even we admit that we are not experts in every aspect of business. We recognise our strengths and also the areas where we need to either bring in specialist financial advice or recommend experts to clients. For example, in a few cases we have used specialists in international tax regulations when advising overseas clients. Wood and Disney do not advise on investments, but recommend investment specialists whom we have worked with over many years and trust to give our clients expert advice. We work collaboratively with human resources consultants for our own and recommend to clients specialists regarding HR legislation and questions.

It is impossible to be an expert in all areas of business, no matter how experienced or qualified you are. The important thing is to recognise gaps in your knowledge and make sure you plug any holes by buying in the expertise from specialists or by employing the right people with the right knowledge and skill set.