The Process For Becoming An Entrepreneur
When it comes to careers and business, my radio show partner and author of the best selling career advice book "48 Days To The Work You Love," Dan Miller, is a walking, talking encyclopedia of precise industry statistics. While Iíve always been comfortable using such statistically noncommittal terms as "many, most, and some," Dan prefers to remember and espouse accurate numbers.
Iíve told him time and again that most people donít mind fuzzy statistics. He keeps telling me that 58.9 percent prefer to have accurate numbers. Who can argue with math like that?
For example, Dan tells me that the U.S. Bureau of Labor Statistics predicts that within the next 10 to 15 years 50% of the American workforce will be working in non-traditional careers. Instead of being a nation of nine-to-fivers we will be moving toward a union of consultants, freelancers, contractors, temporary workers, and telecommuters; and donít forget part-time and fulltime entrepreneurs.
Other surveys over the years have shown that a good portion (sorry Dan) of Americans dream of starting their own business. And who would expect them to wish otherwise. Business ownership is, after all, the American Dream, the pathway to success, the road to financial freedom: for some people (and no, I donít know the exact number, Dan).
What the surveys donít say is that the majority of those people who yearn to be entrepreneurs arenít qualified to start a business and even if they did make it past the initial startup phase theyíd be out of business within a year.
So if youíre among those who are contemplating a move into business now or in the future how can you be sure if itís the right move for you? Before you chuck an absolutely good career working for someone else to chase your own business dreams, you need to figure out if the life of an entrepreneur and the running of a business are really for you.
Iím often asked if there is a process that one should follow to go from worker bee to entrepreneur wannabe (a process rather than just "diving in head first" as it were). There is a process and it begins with a huge dose of self-assessment.
You should take stock of where you are in life; what your responsibilities and commitments are; who you are as a person; what your passions, talents, goals, and skills are; and most importantly, what makes you happy.
Forget all that hogwash about starting a business to be your own boss and to be financially independent. The only legitimate, long term reason to start a business is because thatís what makes you happy. If the comfort of a 9-to-5 paycheck makes you happy, keep your job. Itís as simple as that.
So letís look at the process beginning with the first question you should ask yourself: Are you really cut out to be an entrepreneur? Not everyone is physically, emotionally or mentally equipped be an entrepreneur and even if you think you are at this moment, you could be wrong in the long run. Weíve discussed entrepreneurial traits and skills several times before so I wonít go into great detail here. If youíd like to take a simple quiz to gauge your entrepreneurial aptitude visit my website at http://www.timknox.com.
Step two in the process is to decide what kind of business best suits you. Donít pick a business just because you think itís easy to get into or is the most lucrative or has the best chance for success or offers the greatest rewards. You should choose a business because it fits your personality and goals. Remember that happiness thing I mentioned earlier? You could have a thriving cash cow business, but if itís a business that you hate running with customers that you hate dealing staffed by employees you canít seem to manage, the money is not worth the heartburn.
Step three is figuring out how to fund the business youíve chosen. This is the brick wall that repels most new entrepreneurs. Many business ideas have died while waiting on funding. You can go the traditional routes of raising money: use your savings, tap into friends and family, mortgage your house, cash in your 401K, seek angel investors and venture capitalists. All have their advantages and disadvantages. Iím a huge fan of bootstrapping, i.e. starting with as little out of pocket money as possible and using creative strategies like partnering, extended credit terms, bartering, and vendor financing to fund and grow the business.
Step four is to write a detailed business plan. Again, this is a subject Iíve covered in-depth several times over the years, so I wonít go into great detail. There are lots of books and software packages that can help you create a business plan. You can also contact organizations like SCORE and the Womenís Business Center for assistance.
Next time weíll continue this discussion and look at the remaining steps in the process like finding a location, lining up relationships with vendors and distributors, creating a marketing plan, hiring employees, and a few other things that will help you get started.
Iím sure most of you (probably 72.5%) just canít wait for that.
Have a question for Tim or want to leave a comment?