Counsel To A New Entrepreneur
“I’m thinking about starting my own company!” It is a comment I frequently hear as subtle notice I am about to be queried regarding all the “how to’s.” I launched my own business almost forty years ago and have enjoyed a fun and successful ride. I am still learning. However, at this point the rhythm of my highly practiced work likely looks like smooth, easy street to an outside observer. It is far from easy. And, there have been many dark and challenging moments along the journey.
The frequency of the “how to” queries is obviously related to a much sunnier economy. It is also fueled by millennials more interested in freedom than a gold watch as a reward for faithfulness to a single employer. It sometimes comes from naïve wannabe’s who are stunned to learn that 80% of start-ups crash and burn within 18 months. Regardless of its source, I find my advice centers around five critical success factors of most entrepreneurs—passion, distinction, intelligence, sacrifice and resources.
Passion: The Groundwater of Entrepreneurial Spirit
The opening statement – “I’m thinking about starting”—always gives me pause. I want to say, “Come back to me when it’s ‘I have to start…’” “Thinking about” suggests a passing fancy or a timid exploration. Under the emotional surface of every successful entrepreneur is a drive, zeal, and yearning. It is the source of their tenacity and persistence. People who are employed often live their work at work; entrepreneurs live it all the time. Not like an obsession, although some are obsessed. It is more like a child waiting for Christmas morning. Film maker George Lucas said: “It’s hard work making movies. It’s like being a doctor: you work long hours, very hard hours, and it’s emotional, tense work. If you don’t really love it, then it ain’t worth it.”
Distinction: The Marketplace Differentiator
Successful entrepreneurs look for marketplace holes—products that solve problems, services that fill unique needs, and solutions that are merited. Uniqueness creates a story that fosters a buzz that grows a reputation. Distinction helps answer the question: why will customers want to do business with me. A couple elected to start a pizza business. He loved wines; she loved cooking gourmet pizza. They opened a restaurant and closed it within a few months. Why? Their passion for their products and expertise was not enough. There were already two pizza restaurants nearby as well as a national pizza delivery enterprise. Their marketplace offering was good but far from an exclusive, unique value proposition. Bottom line, they were unable to tell a story that was out-of-the-ordinary.
Intelligence: The Source of Preparation
Intelligence is not about mental quickness, it is about reliable information regarding the target market. Intelligence helps answer the question: who will do business with me? It means doing your homework on demographics, competitive analyses, a candid SWOT (strengths, weaknesses, opportunities and threats) assessment, requirements for marketing, social media and public relations. It comes from interviewing successful start-ups in the same space but different markets. Too often a budding entrepreneur starts with thinking about a website and business card design with little thought regarding how to drive traffic to their website or create contexts to provide a business card. Form must follow function; brand trappings must be thoughtful responses to market research. Instinct can only get you so far. Intelligence helps answer the question: how will I serve my target market?
Sacrifice: The Fuel of Entrepreneurship
I was attending a dinner at an association meeting. Half the group of twelve owned their own businesses; half worked for major companies. The topic was popular television programs. The employees chatted about TV trivia; the entrepreneurs had not seen any of the programs. Entrepreneurs are oblivious to work hours or even work days. Their work rhythm is driven by what needs to be accomplished, not by hands on a clock. It is not that they are workaholics; they are driven by the quest for results and are willing to sacrifice to achieve them. Muhammad Ali wrote, “The fight is won or lost far away from witnesses–behind the lines, in the gym, and out there on the road, long before I dance under those lights.” Sacrifice helps answer the question: how much I am willing to invest to be successful?
Resources: The Tools for Confidence
Successful entrepreneurs take risks. Not fool-hardy, bet-the-baby’s-milk-money type of recklessness, but thoughtful risks. Risk-taking comes from confidence; confidence from the peace of mind you have backing. Resources include money in the bank; I always recommend financial savings of double your annual family income. It includes a network of people who can give you advice—like your own “board of directors.” It means a carefully crafted business plan, a smart staff chosen for valued talents that bolster your weaknesses (not your brother-in-law because he works cheap). Resources include a line of credit, not a huge debt. As a good friend enjoys saying, “Confidence is the swagger of someone who is wise, humble and wealthy; or at least is convinced they are!” The centeredness he describes only comes from a stockpile of relevant resources.
Being an entrepreneur can be a fun, happy life style. But joy comes from success borne of discipline, organization, planning and investment, not just an exciting vision or clever idea. The next time you encounter a self-assured entrepreneur gracefully swimming through life like a swan on a lake, never forget there is a different view under the surface of the water.
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