Lesson No. 1
Launch your business with sufficient cash reserves.
I did a lot of studying of successful and unsuccessful businesses, majority- and African Americanâ€“owned. What I discovered is that many businesses, especially those that are African Americanâ€“owned, fail because they forget the basic equation: Revenues have to be greater than expenses. They build up a lot of overhead in terms of fancy offices and a lot of other accoutrements of success without much revenue. I said, â€śWhen I start my business, Iâ€™m not going to make that fatal mistake.â€ť [I made sure I had] enough financial wherewithal to be able to last without any income for three to five years to give the business an opportunity to make it. I [followed] a business plan that might be described as one of creeping incrementalismâ€”a series of small forward steps that will be undertaken only when Brown Capital Management has the underlying resources to justify them. In terms of the new business, acquire enough financial wherewithal to do it independently, preferably without loans, or through angel investors or friends and family. Acquire enough capital to have staying power because it takes time to build a business.
Lesson No. 2
Stay positive through personal and business crises.
I was just getting started. Right off the bat, we found out my wife had breast cancer. Man that was almost like a knockout punch. Rather than merely go through the motions, wasting my clientsâ€™ time as well as mine, I put Brown Capital on hiatus and focused on my most important priority at the momentâ€”assisting my wife with her recovery. It required a lot of internal fortitude to get myself together and have the uplifting spirit that you need as an entrepreneur to keep plugging ahead.
Lesson No. 3
Always be prepared to make the big pitch.
You havenâ€™t lived until youâ€™ve had 10 minutes to persuade six total strangers to give you $40 million. My audience [was] the investment committee of the California Public Employees Retirement System, or CalPERS. Itâ€™s time to sell the heck out of my brand. No sooner does my backside settle into a chair at the conference table than a black digital stopwatch with big red numbers on it starts running. Given the amount of money at stake, naturally, Iâ€™ve left nothing to chance. I know precisely what Iâ€™m going to say as well as how and when Iâ€™m going to say it. Iâ€™ve rehearsed my lines ad nauseam and have literally timed them to the second. So I let the verbiage Iâ€™ve chiseled into my brain start to flow, and make it a point to swivel my head so that I can have eye contact with each CalPERS team member. Iâ€™m excited and revved up but not nervous because thorough preparation always puts me at ease. Bottom line, a few weeks later I get the $40 million I flew to Sacramento for.