Many of us have moments when our boss seems overly demanding and the 9-to-5 daily drill feels like a drag. At such times, fantasies may emerge about what it would be like to be self-employed. You wonder: Should I start my own business? Could I make a go of it?
Before you shout "Yes!" to those questions, take time to ponder them, digging deep within yourself for answers. The more thoroughly and honestly you do so, the greater your chances for success in becoming a business owner.
Of course, your readiness to launch a business depends on many outside factors, as well. Can you raise enough capital? Is your business idea solid and in tune with the market? And much more. Here we'll examine just one aspect in the equation: you.
Passion--Ranking high on the list of qualities that spell success for business owners is passion, says Kent Smith, a volunteer with SCORE, the Service Corps of Retired Executives, in Portland, Ore., who teaches and counsels prospective business owners for the Oregon office of the Small Business Administration (SBA).
"You have to have a passion for what you're doing," Smith says, "rather than just seeing it as a way to escape a 9-to-5 job or a boss you don't like." Be aware, he adds, that as a new business owner, you may be trading in the 9-to-5 routine for 16-hour workdays.
If your passion is strong, it fuels your ability to cope with the uncertainties and the ups and downs that come with starting a business. Family members' coping skills also enter in, though. If you have a spouse and/or children, you must consider whether they support you 100% in this venture.
Flexibility--The ability to step back, evaluate, and change course when something isn't working. It also means being willing to ask for help when needed. "You can be in charge," Smith notes, "and still ask for help, but a lot of people don't look at it that way. If my ego says I have to be in charge and nobody can know I need help, that's a roadmap to failure."
Resiliency--Closely linked to flexibility is another useful trait: resiliency. As a business owner, "You're going to feel bumps along the way," points out Shelley Jensen-Decker, training and career services manager for WomenVenture, a company that provides the tools and emotional support to women starting their own businesses, in St. Paul, Minn. "You have to be able to face rejection and bounce back."
Ability to think on your feet--Successful business owners also are "people who can think on their feet, and who are problem solvers," says Diane Goodman, a business educator/adviser at Alternatives Federal Credit Union, Ithaca, N.Y. Consider, too, she adds, how you'll feel about giving up that steady paycheck. "Many people don't realize how important that is," Goodman notes, "until they don't have it."
Other key qualities--Persistence, self-motivation, creativity, self-confidence, integrity, eagerness to learn, and a host of other prized human qualities are important.
Consultants emphasize it's a myth that successful entrepreneurs fit a particular "type." No specific set of personal characteristics guarantees success among business start-ups.
Checklists--of varying designs and available in magazines, books, and other sources--aim to help you size up your entrepreneurial aptitude. But some of these get "nit-picky," says Leslie Ackerman, also a business educator/adviser at Alternatives Federal Credit Union. "It isn't just a matter of fitting a square peg into a square hole," she says. "If you're a round peg, you can still be successful ... It takes all kinds, really."
You may conclude that you have a lot of what it takes to become a small business owner, but still feel lacking in some areas. Self-assessment checklists can provide a way to help you pinpoint your strengths and weaknesses. "Then, depending on what your weaknesses are, you may be able to overcome them as part of your business plan," says Patrick Woods, director of business services at Alternatives Federal Credit Union.
For instance, if you're uncomfortable making cold sales calls or are too disorganized to keep your financial records in order, you might team up with a partner or hire an employee who can fill in for your gaps. "Or, if it's something you don't understand," Woods says, "there's always the possibility that, with training, you can learn how to do it."
Small business success rates are much higher than previous studies showed. According to the Small Business Administration (SBA), two-thirds of small businesses survive at least two years, and 44% survive at least four years.
Previous estimates put first-year failure rates around 95%, but the inaccuracy was that calculations didn’t distinguish between a "failure" and a "closure." Businesses can close and still be a success—think of acquisitions, buyouts, mergers, name changes, or going public. Technically, on paper that is, these are "closures," but in reality these are markers of success.
Keep in mind, however, that business ownership isn’t right for everyone. If one of your weaknesses is that you can't roll out of bed before noon, or you completely freeze at the prospect of making an important decision, then you face bigger problems.
Still, you could be one of the survivors. You'll improve your odds if you begin with a hefty dose of realism--both in terms of examining your personal strengths and weaknesses and in assessing whether you're up to the hard work (and it is hard work) that lies ahead.
If you're thinking of launching a home-based business, you have to consider a couple of additional factors, advisers point out.
- Working at home is rife with distractions. From the television to the pile of laundry lurking in the corner, "It's easy to get waylaid," Jensen-Decker says. In this environment, sticking to business takes an extra measure of self-discipline.
- Isolation is a potential problem for the home-business owner. "You need to understand your need for interacting with other people," Jensen-Decker suggests. "A lot of people get their social needs met at work, and that won't happen if you're a sole proprietor working at home."
- Separating realism from idealism can be difficult. Talking to a consultant or joining a class can be extremely useful when you’re contemplating your dreams and trying to filter out reality. You can brainstorm with others and broaden your perspective about what it means to be in business for yourself--before you head down that path.
Published July 31, 2007