Going into business or electing to be self-employed is a serious decision. It requires devotion and sacrifice – and it generally commands significant investment of energy, time, and perseverance. To be painfully blunt, business isn’t for everyone, while for others it’s natural.
Before rushing into business, most of us are well served to begin the process by responsibly and objectively determining whether we are prepared to make that commitment and assessing also if we have the requisite level of entrepreneurial spirit. In short, would-be entrepreneurs need to take stock of such traits as disposition, skills, motivation, and resolve.
- Prerequisite Characteristics of a Successful Entrepreneur
- Daring – For lack of a better word, ‘daring’ in this context represents courage and entrepreneurial instinct. More simply stated, daring means that you have the irresistible desire to own, and to shape, your own business. Concurrently, it implies that you have the motivation and focus to act on that desire (instinct).
- Passion – At the risk of reverting to cliché, successful entrepreneurs typically love the business, product, or service that they intend to pursue. While these individuals are driven to be in business and to bring their own ideas to fruition, the likelihood of success grows exponentially with the commensurate satisfaction and pleasure that the identified business activity brings them. Happy in their work, fulfilled entrepreneurs often view their business as fun; not work.
- Smarts – While many of us are supporters of educational and vocational credentials, entrepreneurial smarts embodies more than academic achievement or standing. Emotional intelligence, presence, responsiveness and common sense, combined with relevant experience round out the successful entrepreneur’s toolkit. And while it may go without saying, a working knowledge of the intended business or industry is in most instances invaluable.
- Capital – While some businesses can be started on a small scale and supported with modest initial investment, all businesses need some money to get off the ground. To be prudent, a new venture should before opening its doors, have sufficiently accessible cash to maintain a positive cash flow for a period of not less than one to two years. The process of developing a business plan and accompanying pro-forma projections can assist greatly in determining what that means under the circumstances and will go a long way in informing the way forward. As the business grows and experience is gained, cash flow control and resource allocation will be become increasingly meaningful. Some may even place limits on how much they are prepared to invest (or reinvest) in the business.
- Early Considerations
- Decide if you’re ready to be in business – Going into business will command a fair deal of a person’s attention, sacrifice, and financial equity. Naturally quite different between different individuals, different sectors, and different business endeavors, most will experience a drop in family and leisure activities and increased exposure to financial risk. More often than not, there is more stress associated with being an entrepreneur than that experienced as an employee or a student so it’s wise to speak to others in business and to read up on those who have made a successful transition.
- Decide on nature and location of business – Once you’ve determined that you possess the characteristics of a successful entrepreneur and established that you’re ready to be in business, decisions must be made around which business offering best suits your particular skills and aspirations. While possibly less germane than is the case with home based businesses, it’s important also to identify the location and geographic catchment of the intended business. The act of developing a business plan will again be of great assistance is forming and informing the way forward. If you’re not sure which business might be best for you, please see the C&C CFDC’s next article which intends to table some ideas for consideration.
- Decide on whether to transition or to fully engage – Conservatism sometimes dictates that we hold onto our current jobs as we start up a new business or venture; or moonlight. Moonlighting permits us to more gradually transition into the business while serving also to mitigate some of the more important risks. As there are pros and cons to moonlighting, you are encouraged to scan some of the readily available online material which tends to suggest that in the majority of cases, the advantages of transitioning (moonlighting) outweigh the drawbacks. That said, one need avoid becoming a permanent moonlighter.
- Decide on whether to build or buy your business – As we have witnessed, the success of entrepreneurs varies as too do their paths. Recognizing that businesses can be started from ‘scratch’, can be purchased or assumed from a vendor, inherited, or otherwise struck through franchise agreement and other legal construct, some contemplation need be lent early in the process to consider the attractiveness of the various options. Different models naturally impute different outcomes and different industries offer different prospects so a bit of homework will go a long way in avoiding pitfalls.
Making the decision to go into business can be both exciting and arduous. Before proceeding headlong into a business start-up, gather some publicly available information and do reserve some time to ponder on the subjects herein touched upon. And don’t forget to examine what your anticipated competition may be doing – Not so surprisingly, effective market intelligence will affect your plans and perhaps entirely alter them.
The Cornwall & The Counties Community Futures Development Corporation wants you to succeed! To that end, we encourage all of our existing and prospective clients to objectively assess their ideas, and their fit before entering the business plan design stage. Doing so may not guarantee success, but it will inspire it.