There are 14 million people out of work. Up to 42% of them could end up self-employed. This isn’t an outrageous idea since many of the jobs that have been lost in the recession are not coming back. Besides retraining, entrepreneurship is a viable option. Each year, approximately 6 million new businesses are started. There is every reason to believe this trend is going to continue and may even increase.
Why? The benefits of having your own business can be quite seductive; the freedom to do what you love, the chance to be your own boss, the potential for substantial wealth, an opportunity to make a difference in your industry, with other people, your community and the world.
But , there is no guarantee you will enjoy these benefits. In fact, the risks can be quite daunting; significant financial investments, high stress and potential for burnout, unreliable suppliers, difficult employees, less time for family, friends and leisure time, and instead of typical workdays of 9 to 5, its more likely going to be 5 to 9 seven days a week.
The grim reality is that over 50% of new businesses fail within the first five years. Very few make it big. For some, a failed entrepreneurial venture ends up causing problems in the family, marital difficulties or even divorce. For many more, it ends in financial disaster such as huge debts or even bankruptcy. Still, entrepreneurship offers a unique opportunity for growth, both personally and professionally.
Carol Roth is a Partner and Business Strategist with Intercap Merchant Partners, a business advisory service that maximizes value for companies by partnering with them through investments, financing, licenses or other avenues. In the short video below, Carol recommends that, above all, aspiring entrepreneurs should be realistic, suggesting that if you fail to prepare, then you prepare to fail. She offers 5 tips to increase your chances of business success.
- Test your business on a small scale-small budget/small amount of time
- Get relevant experience-go to school on other people’s dime-i.e. work in a bike shop nights and weekends before opening a bike shop
- Make sure others in your life are on board-business ownership is demanding
- Build your network of relationships-expand your support system
- Get your financial life in order-make sure you have enough capital to fund the start-up plus your living expenses for at least 2 years
As Carol stated in the video, entrepreneurship is a long term commitment. So much so that you need to make absolutely certain it is right for you before taking the leap. The fun little test she gives aspiring entrepreneurs is a good one. If you love the adrenaline rush of being in charge, then you are probably more like Santa and would enjoy being an entrepreneur. If, on the other hand, you would rather leave the decisions and responsibility for results to someone else, then you are probably more like an Elf and should stick to being an employee.
Those of you who are considering taking the plunge may be wondering if this is the best time to take the risks associated with starting a business. In an article published in Inc. Magazine on April 1, 2009, author of the best selling book, “Good to Great”, Jim Collins predicted that the future will be full of uncertainty, chaos, turbulence and risk. So far, his prediction has proved to be correct. But, it’s not a bad time to be an entrepreneur.
Collins believes we now know enough about successful entrepreneurship to teach it in a systematic and replicable process. Successful entrepreneurship is more about action than personality or temperament. When starting a business, Collins urges all aspiring entrepreneurs to:
- Focus more on making a difference (vision and mission) than money
- Identify and execute strategies that advance your company’s goals
- Manage time, money and outcomes; not how work gets done
For those of you who are hesitating to start a business because of the risks, it might be helpful to ask yourself one question. Is self-employment really that much more risky than having a job? Let’s see, when you have a job…
- Your work goals and objectives are determined by someone else
- The kind of work you perform is determined by someone else
- How, when and where you work is determined by someone else
- Your performance is measured and evaluated by someone else
- Your paycheck and other rewards are determined by someone else
- Your job security is determined by someone else
So, pick your poison, as the saying goes. As for me, I’m addicted to the adrenaline rush of entrepreneurship. If you have any tips on starting a successful small business I’d love it if you would share them in the comments section below this article.
Those who enjoyed this article also enjoyed:
What Is The Best Business To Start?
Best Advice for Starting a Business: Ask the Experts!
Is now a good time to start a new business?
If you would like to contact me, you can do so by visiting my LinkedIn page or emailing me at mike.clough@bestbizpractices.org.
Posted by: Mike Clough
