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A Reality Check

Written by: Karen E. Klein

Article Overview: Entrepreneurs are notorious optimists - they almost have to be, to take the risks required to start their own ventures. I'm an optimist too, but I temper my sunny outlook with a large dose of realism. (It doesn't always save me from making dumb decisions, but it helps.)

A Reality Check

Entrepreneurs are notorious optimists - they almost have to be, to take the risks required to start their own ventures.

I'm an optimist too, but I temper my sunny outlook with a large dose of realism. (It doesn't always save me from making dumb decisions, but it helps.)

I love assisting people who want to start their own businesses, and particularly relish hearing from those who took my advice and have succeeded beyond their wildest expectations.

But some of the inquiries I get seem to come from untempered optimists who need a reality check, or those who are so focused on bootstrapping that they may fall into the "penny-wise, pound-foolish" category.

One of my columns recently dealt with the latter possibility: A couple who run two businesses merged under one financial and legal umbrella. That's not a good idea, and not even necessary in this era of cheap, easy entity formation available online.

I recently got another question from a would-be entrepreneur who wants to start not one, but two companies: One in the television and film industry and the other in food production.

Ambitious, but tough. Starting one business is difficult enough, as any entrepreneur will tell you. And both the entertainment and the food industries are costly and complex to break into, particularly for those with no experience in or ties to existing businesses. It can be done, but it's not wise to do it simultaneously.

Another would-be entrepreneur wrote me to ask about starting a social networking site, tossing out as an afterthought: "Oh yeah, I have no money."

Well, it's easier to start a home-based, online company with no resources than it is to open a brick-and-mortar firm. However, it's always smart to save, beg or borrow startup capital before starting a company.

The number one reason businesses fail, the experts say, is because they don't have enough money to get them through the year (or more) it may take to become profitable. In most cases, it's better to hold off your startup until you get the information you need, do the research that will improve your odds and amass the cash that will allow you to set your company up right.

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Article Tags: afterthought, bootstrapping, brick and mortar, dumb decisions, entity formation, entrepreneur, film industry, food industries, food production, latter possibility, mortar firm, optimist, optimists, realism, reality check, social networking site, startup capital, sunny outlook, temper, umbrella



Related Forum Posts
Re: Create your own small business reality show - That's very true. I know I would work harder. But you're right....people like to see other people fail (sad to say) so I'm sure they'd watch it either way. Reality really keeps people interested. I think it's a way for some people to escape their own crazy lives for a while and/or a way to let them know they aren't the only one having a tough time.
Re: How can you distinguish real from fake opportunities? - Check with the internet BBB for starters.
Re: Life on the go! - Hi CMorris, We are glad you're here. We also have a lot of useful information on this forum. Check it out by searching from the main page. If there's something you don't find you can always start a new strand.
Re: hello from newbie! - Hello, Julius: Welcome to the forum. Check in often, post comments and questions, and offer your ideas and experiences so we can get to know you ... and you WILL make lots of friends here! GT :-]
Quality Member - Hi there, I just like compliment my previous post, where I ommitted the 'Subject' title. Check it out. An additional question: What do you think attracts the members to this Forum? Kindest Regards Beat


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