Starting a business is incredibly rewarding, but it’s obviously not without its stresses. Anyone looking to dive into the world of being their own boss has heard the statistics: Approximately 20% of small businesses close their doors within the first year, and that number rises to 30% in the second year and 50% within five years[1].
Rather than focusing on the negatives, though, entrepreneurs looking to start a business should set their sights on achievement. “You want to start by looking at your best opportunities and striving for success,” said Jeffrey Wolf, president/CEO of DPI, Inc., a precision manufacturer supplying machined components to the aerospace community for use in commercial and military flight control, as well as components used in the field of cryogenic research for national defense, medical MRI equipment, liquid helium and hydrogen gas transport and pharmaceutical manufacturing. “When you’re starting a business there will be so many times when you think, ‘Why am I doing this?’ If you don’t find a way forward, if you don’t have that desire to focus, you’re inviting disaster.”
One essential element of starting a successful business is knowing when to ask for help. We’ll get you started. Below, Wolf shares his advice on business aspects from setting up your systems and developing a killer motto to growing your client base and avoiding major pitfalls.
Let’s start at the beginning. You’ve obviously found great success when it comes to business. What are some of the main systems you put in place that you can look back on now and say that they helped you get here?
Wolf: I grew up working in a family business. I was born and bred into that family business, and lived it for most of my life. The research I had before starting my own company was gained through my own professional experience prior to starting my business. I had worked as an engineer for an OEM company, similar to industries I was now serving, learned that end of it, and was better prepared to focus on what needed to be done when it came to servicing that industry. I knew the frustrations that I, as the customer, had run into. So when I went into the other end trying to provide those same services to potential customers, I already knew what I needed to give them, when they needed it, to not frustrate them.
Having that background of experiencing the same thing that your customers are now seems invaluable. On the other hand, what was the biggest business mistake you think you’ve made, and how did you fix it?
Wolf: Some of the bigger mistakes I’ve made involved investing in the wrong areas of technical expertise, maybe getting too far out of my comfort zone. That said, over the years, I’ve made many leaps and bounds in the technical aspects of what I do. Every now and again, you dive into those areas, and you fail. When that happens, you must step back and say okay, this isn’t for me. Put that aside and look for the next area to dive into in order to grow your business. The only way you grow is by challenging yourself, and every now and again you’re going to make a mistake. Still, for every 10 tries to expand my business scope, maybe one failed. I feel like that’s a pretty good success rate.
Avoiding — or at least being aware of — major pitfalls is an essential element in building a successful business. In your experience, what are some of the other major mistakes first-time business owners make when getting started?
Wolf: I would say the biggest one is the belief that success happens overnight. I look at myself now and can say I’m successful in what I do, but it took a lot of hard work and a lot of years to get where I am. I often have people who work under me say, ‘I want to be where you’re at,’ but I don’t see them putting in the effort to get there. There’s a lot of risks you must take and sacrifices you have to make in order to be successful. It involves giving up personal time, risking financial security. If you make a mistake, you could lose everything. It takes guts to start a small business. You must be able to make sound decisions based on what you know, and then try to turn those into successes, as opposed to going into something haphazardly and saying, ‘it’ll all work out, even if I give it a half effort.’ You can’t have the idea that somehow it’ll all just magically work out, you have to make intelligent decisions and then forge forward.
As you’ve seen the business world evolve over the years, what would you say are some of the main setbacks business owners should be aware of or that surprised you (inflation, shifting consumer demands, etc.?), and how can they best prepare for them?
You can never prepare for all of it. Look at what happened with Covid. It’s about paying attention and keeping an ear close to the ground, listening to what people around you are saying and doing. Talk to your customers, stay on top of how they’re doing. Find out what their forecasts are and build to that. It’s the same thing with the economy. If interest rates are going up, should you really be purchasing capital equipment? Maybe, maybe not. You have to weigh all the pros and cons and pay attention to all aspects of what the world is throwing at you. The world is getting much smaller. Customers used to call us on the phone and say, ‘I’ll mail something to you for review’. Now they send something to us instantaneously, and they expect an instantaneous reply. You have to be able to meet those demands because the marketplace now requires it.
Now let’s talk about success! If you had to pick the most important steps that you took when first starting out, what would they be?
- Know your customer base. We’re a service company, when it comes down to it, and our business is based on communicating with customers. That means making sure they know we’re there for them, responding to questions quickly, and being flexible when they need us to be.
- Find somebody you can bounce things off. Someone who has been there, done that in your business. Without a sounding board, you’ll be lost a lot of the time. My father had been in business for 50 years. He was my sounding board.
- Don’t be careless with your finances. You need money coming in that’s going to support your needs and all the things you’re trying to accomplish.
- Have good people working for you. From the beginning I knew that to fulfill the needs of my customers, I would need good staffing. Starting a good business takes a lot of capital — both physical capital in the form of equipment, but also people. You need to hire the right people to do the job. In the beginning you must do a lot of things yourself. You’ll have a small, talented crew, and you’ll all wear many hats.
What are some of the essential resources you used that helped you when you were getting started?
Wolf: There was no internet back when I was first getting off the ground! Nowadays, I’d recommend doing your research online. Find associations you can partner with in the same field and learn from them. I also have to say that a good banking relationship has been key for us. We've been working with PNC for years, since the beginning. A lot of times you don’t have the luxury of waiting for capital. If I need something with a big price tag, I need to be able to go to the bank and secure a quick loan. I need a good banking relationship. Our bank has been with us from the very beginning, and I have a relationship with them where I can say, ‘Hey, I need your help, I’m going to need a credit line, what can we do?’
What’s your business motto? How has that helped you weather the rough periods?
Wolf: Our motto is quality first. The thing that has separated us over the years with customers, with our base, is that we give them a quality product. Our customers can’t receive goods from us that don’t work — they don’t have that time built into the equation to send them back. A lot of what we do is called “dock to stock.” It leaves our dock — checked and approved — and it’s approved to go right into their stocking systems. Our quality is absolutely the No. 1 focus in our business.
What’s your one parting piece of advice for new business owners?
Wolf: I was in the corporate world for several years, and I went into small business to control my own destiny. I wanted to make the final decisions from beginning to end. That’s what you must be able to do: Take on everything, from coming in the door to going out the door. Your name is stamped on it, and when there’s a problem it’s a problem with you, not your personnel. If you take the approach that everything falls on you it makes it more personal. That can be frustrating. It can be worrisome at times. But the opposite side of that is that when it works, if you can get it to work year-in and year-out, it can be very rewarding. Not only monetarily, but also for self-esteem. It feels good to build something that can survive.
For more on small business, check out PNC’s small business Insights hub for advice and tips.
