As someone who has started many businesses over the past 20 years I can tell you two things with absolute certainty; it is the hardest thing you will ever do and there are no guarantees. That’s why, if you are serious about going into business for yourself, you should do it with your eyes wide open.
There are countless books, magazines and websites dedicated to assuring you that being in business is the road to great wealth. While, it’s true that Bill Gates started out with nothing and built an empire that made him one of the richest people in the world, it is also true that Bob, my plumber is neither wealthy nor famous.
The facts about startups are not pretty; more than one-third don’t survive their first year. About half fail in the second year and close to 70% fall by the wayside by year number four without ever having turned a profit.
While most business owners will never own a mansion and a yacht, most will tell you that they are the luckiest people in the world. They feel lucky because they are almost always doing something they love and they are the masters of their own destiny.
The Right Stuff
The most important question you have to ask yourself is; “Do you have the right stuff to become an entrepreneur?” I can’t tell you how many people have said to me; “Since you’re in business, you must like to gamble.” I don’t! Let me explain. Sure starting a new business is a gamble and the odds are against you, but like a professional poker player you can improve your odds by knowing the rules and minimizing your risk.
The two most important things you need to start a business are time and money. Trust me, the road to start-up success is neither cheap nor quick. Contrary to late night commercials and internet ads, no one is going to hand you thousands of dollars in inventory or equipment out of the kindness of their heart. Suppliers want cash, up front.
Often, the reality of starting a new business means holding on to your day and spending every, and I mean every, free minute working on your business. Even if you are fortunate enough to have a spouse who can cover living expenses while you get your venture off the ground you should postpone giving up your steady gig as long as possible.
Whether or not you have a chance of success depends on three words; plan, plan, plan. Planning can mean different things to different people. This is why you need a formula for knowing if you’ve planned enough. A wise man once said that knowledge is power and he was right. Knowledge is the power behind success and I’ve found the best way to know when you know enough to start a new business is when you can answer every question anyone can have about that business.
The Bottom Line
Entrepreneurs are not born. They are not manufactured in business schools. Entrepreneurs are self-made. Ultimately what matters is you. If you have the drive and the desire to succeed and you carefully plan you too can become an entrepreneur.