Are you an Entrepreneur is my first blog post in a series on Starting a Business.
Introduction
According to the Small Business Administration (SBA), about 20% of new businesses fail in their first year, about 50% fail within five years and about 70% fail within 10 years. With those odds, why would anyone be crazy enough to throw their hats into this arena? According to Merriam-Webster, the definition of entrepreneur is one who organizes, manages, and assumes the risks of a business or enterprise. Sounds pretty straight-forward until you evaluate the part about “assumes the risks of a business or enterprise”. Here is where it takes a special kind of person to be able to handle this endeavor. Not everyone is destined for this challenge. So how do you know if you have what it takes to venture into this endeavor? I have identified some of the traits and characteristics that I think are important if you so desire to take the leap.
Know Your Why
The first thing to consider before launching your own company is your Why? Simon Sinek says that “Your ‘why’ is the purpose, cause, or belief that inspires you to do what you do. When you know your ‘why,’ you have a filter to make choices, for better or for worse.” The most important word here for me is “inspires”. Entrepreneurship is hard. There will be days that will bring you to tears, to the brink of wanting to quit. Here is where your Why is so important. Your Why has to be greater than the pain and despair that you face during your journey. In a future blog post, we will cover defining your Why. For now, just know that it is an important first step in the entrepreneurial trek.
Be Proactive
Entrepreneurs must be proactive in pursuing their dreams, and this requires a willingness to take initiative and start projects on their own. A self-starter is someone who can identify opportunities and take action without being prompted or directed by others. It’s what separates successful people from average people. Entrepreneurs have a lot of responsibilities and a limited amount of time to accomplish them. Being a self-starter means being able to manage one’s time effectively and prioritize tasks in order to maximize productivity. Entrepreneurs often have to work independently, especially in the early stages of their business. Being a self-starter means being comfortable with working alone and taking ownership of one’s work. If you cannot motivate yourself to accomplish your tasks, it is almost impossible to succeed in business. Just go buy lottery tickets. You will probably get the same odds.
Calculated Risk Taker
There is an adage in business that to be an entrepreneur is to be a risk taker and leap off the cliff. Sell the farm. Mortgage the house. This is completely untrue. An entrepreneur need not be a gambler but can take calculated risks. That does not mean that their endeavors are likely to succeed (see the stats above), however, it is important to de-risk as much as possible to have the most likely successful outcome. Yes, at the end of the day, they do go all in on a project, but they start by defining the project and determining areas where they need to de-risk it. Some even start their business as a side-hustle in order to support the business while they are building. Some partner with other companies as stepping stones. There are many ways to attempt to de-risk the business and you should brainstorm as many as possible before you start the journey. If you’re comfortable with uncertainty and willing to take calculated risks, even when there’s no guarantee of success, you might be an entrepreneur.
Work Ethic
Having a good work ethic is instrumental when starting a company. Vidal Sassoon said “The only place where success comes before work is in the dictionary.” There are many books out there claiming the 4 hour work week or work/life balance. That is the ultimate goal as an entrepreneur, however, you have to be prepared to roll up your sleeves and log some extra hours during the formative years of your company. The work has to get done by someone and early on it may just be you at the beginning. “Opportunity is missed by most people because it is dressed in overalls and looks like work.” – Thomas Edison. As your company grows and you can afford to out-source or hire someone to complete the work, then you can start to reduce your workload. Until that time, be prepared to burn the midnight oil or rise before the roosters to get the traction you need to grow your business.
Embrace Your Fears
Entrepreneurs must be able to embrace fears especially the fear of failure. Winston Churchill said “Success is not final, failure is not fatal: It is the courage to continue that counts.” Entrepreneurs must actually reframe their thought on the word failure. They must remove the negative stigma of the word and instead use it as a tool. There is a saying to “fail quickly” in your business. This does not mean go out of business quickly. It means to find the deficiencies in your business the quickest way possible. When starting a company or a new project, identify the most difficult problem or the most likely area that the company will fail and test this area first. You should treat it like a science experiment. Everything becomes a hypothesis, not a milestone. This helps remove personal ownership and makes it easier to fail forward and pivot when necessary. For example, I want to teach a monkey to sit on a stool and read Shakespeare, many people would start on building the stool so they can get small wins and build momentum. The correct way to approach it is to start with the hardest problem, finding/teaching a monkey to read Shakespeare. If you can never accomplish this task, you never have to worry about the stool.
Continuous Education
One of the most rewarding parts about being an entrepreneur is the opportunity for personal growth. To be a successful entrepreneur you must be a lifelong learner. You will be required to do many tasks that are initially outside of your wheelhouse. In order to meet the future needs of your business, you must be willing to acquire additional knowledge regularly. Many successful CEOs are avid readers and most read a variety of books from fiction to nonfiction to biographies from a vast array of topics. You never know when an idea completely unrelated to your business or industry can be applied to your company. It is a good idea to seek out educational events. Not only will this increase your skillsets but you can also grow your network at the same time. There are many other resources available for your continuous education including YouTube, Udemy, Kahn Academy and many other online education platforms. It is up to you to determine what is your best platform to grow your knowledge and to dedicate time weekly (if not daily) to this pursuit.
Adapt or Die
You never know what the entrepreneurial journey will require from you on a daily basis. One day you are constructing your widgets, the next you are reviewing your financials and on the third day you are at a sales conference. It is vital that an entrepreneur be adaptable to any challenge that is thrust upon you. Your vision should also be adaptable. Don’t fall in love with an idea. Just because you think it is a good idea does not mean the industry will agree, especially with their checkbooks. Be willing to take feedback that the marketplace provides and pivot when necessary. Twitter started as a side project at a podcasting company called Odeo. Slack started as a gaming company called TinySpeck. Nokia was originally a paper company. The list goes on an on. It is probably easier to find a company that pivoted from its original idea than one that has stayed the course with their founding concepts. You must be open to listening to feedback and to adapt as necessary.
Support System
The next area is not a trait but a vital component of being an entrepreneur. The road will be bumpy and difficult along the journey. Ensure that you have an adequate support system in place or, at minimum, start building it as you build your business. The support system ranges from your spouse or significant other to friends that will listen to you unload your challenges to mentors who will guide you along your route. It is important to know that you cannot go it alone. An African proverb said “If you want to go fast, go alone but if you want to go far, go together.” To go far in business you will have to rely on your support network to pick you up along the way. Whether it be emotional support, encouragement, wisdom, contacts or even funding, your support network can provide the lift you need in the most dire of times or even just on bad days. It is important to continually grow your network. You never know where your next client, mentor or connection will come from so it is important to always be building. A strong network can carry you to the finish line.
No One Likes to Talk About Money
The final attribute is also not necessarily a trait, but more of a recommendation. If you have met all of the other characteristics and think that you are ready to make the entrepreneurial leap, then you need to ensure that you are financially prepared. That means different things to different people and to different businesses. Are you a solo founder starting a lifestyle business as a side hustle or you building a team and raising venture capital for a new electric car company. The needs of the founder and the company vary drastically for each company. Make sure that you consider all aspects so the company is properly capitalized and you can survive on the home-front. We will discuss funding options in a future blog so I will focus on the personal side here. If possible, maybe you should launch as a side-hustle until you grow the business that will meet your monthly needs. There are, of course, challenges with this approach however it may relieve some of the risk and stress along the way. If you are just jumping off the diving board and going all in, you should have a nest egg set aside to pay your bills as it may take time before you start incurring revenue. The most important thing is to have a plan.
Conclusion
Some of the characteristics that I have identified to be important for an entrepreneur include knowing your why, being proactive, being a calculated risk-taker, having a good work ethic, reversing your mindset on failure, being a life-long learner, being adaptable, ensuring an adequate support system and being financially prepared. If you are struggling in one of these areas, it does not mean that you cannot be successful as an entrepreneur. The important thing is to recognize your current shortcomings so that you can accommodate for them. Maybe early on you have to outsource some projects because you have not obtained the knowledge yet. Scared out of your mind to start the entrepreneurial journey, join the club. Find a way to push forward and join the club of fellow entrepreneurs. Ultimately, the best way to know if you’re an entrepreneur is to give it a try! Starting a business is a challenging but rewarding experience that can teach you a lot about yourself and your capabilities. If you have a business idea that you’re passionate about, take the leap and see where it takes you.
Additional Reading
Here are four books that can help you determine if you are an entrepreneur:
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- Think and Grow Rich by Napoleon Hill – This classic book provides insights and advice on how to develop the mindset and habits of successful entrepreneurs and achieve financial success.
- The Lean Startup by Eric Ries – This book provides guidance on how to start and grow a successful business by focusing on the most important aspects and testing ideas quickly.
- The E-Myth Revisited by Michael E. Gerber – This book provides insights into the common myths and misconceptions about entrepreneurship and provides a practical framework for building a successful business.
- The Right It: Why So Many Ideas Fail and How to Make Sure Yours Succeed by Alberto Savoia- This book explains why most ideas fail and offers practical strategies, including pretotyping, for ensuring success by focusing on the “right” problem to solve.