Bob Parsons, founder of GoDaddy, shares advice for entrepreneurs to manage risk, grow their business, and ensure long-term success.
What advice do you have for navigating financial risk while juggling multiple business endeavors?
The key to successfully operating any business is to always know where you stand. Nothing does this more than a sharp accounting function. Daily monitoring of key business indicators along with forecasting short term profitability go far in mitigating your financial risk.
It’s also incredibly important to make decisions quickly when circumstances warrant. My staff knows I’m in no rush to hear good news but insist on getting bad news immediately. I know the quicker I do something about it, the sooner the problem is solved.
How quickly you solve your problems is a key to success for any business.
What are some best practices for scaling a business responsibly after rapid success?
Managing a business that is suffering from growing pains is a wonderful problem to have, but nevertheless, it’s still a problem.
First and foremost, you need to pay close attention to your business. If you’re paying attention, you’ve likely discovered what your business is doing well and where you might need some work. Prioritize what you believe the business needs most – staffing, inventory, operational efficiency, and so on – and focus your efforts there. If you haven’t been paying attention up to now, it’s obviously going to take more time and be much more difficult to manage. Start taking the time now to define what moves your business forward and it’ll pay off in spades.
It’s important not to be too hard on yourself or your staff. At the end of each day, if things are better, at least in some small way, when everybody leaves the office than when everyone arrived that morning, it’s a job well done.
For digital companies, a lot of direct person-to-person interaction is lost. How can these companies ensure the customer experience isn’t compromised?
They can’t.
It’s a fact: While we love using the internet to do research, shop, be entertained, or communicate with friends, when it comes to solving problems, we much prefer dealing directly with knowledgeable people who speak our language. The internet will never replace this. Digital companies need to keep this in mind. Those that do are usually far more successful; those that don’t will have a much more difficult time.
You’ve spoken about how “Plan A” rarely goes how you want it to. How can business owners be prepared for the worst without adopting a mindset of expecting failure?
I hear folks say time and again, “What if it doesn’t work?” I rarely do this. Instead, I tend to think, “What if it works?”
There is one important caveat. At the outset of creating any new business, or when I’m going through difficult times, I make it a point to understand the worst-case scenario. I ask myself, “What or what else could go wrong and what will the impact of that situation be?” After I quantify and understand what the downside is, I accept it. Then I dig in and work to make things better. Throughout my entire life, I’ve found this simple way of thinking to be incredibly empowering. Plus, it helps me sleep better at night.