Portrait of an Entrepreneur

With unemployment over 10% in many states, literally millions are out of work watching their unemployment benefits march toward expiration. Others have kept their jobs, but are working harder for less, as both staffing and salaries have been reduced. For some, paychecks are being delayed. Many have experienced the worst fear of all for an employee. Their paychecks have bounced.
The economy seems to be turning around. The stock market is rising. The financial sector is getting stronger. But, employment is a lagging economic indicator. Some economists predict it will be 10 years before employment has fully recovered. In this environment, more and more professionals are looking to self employment. The best way to protect yourself from a layoff is to own the company. But as millions consider starting their own business only a handful take the plunge.
The entrepreneur is one of the world’s most elite clubs. Surveys indicate that the vast majority of Americans think about owing their own business. Yet only a small percentage actually own successful businesses. In my experience, many entrepreneurs like to own several diverse businesses. They may own a car wash, a laundromat, a couple of parking lots and a spattering of commercial real estate properties. In other words, they have “broken the code” for running a successful, profitable business. To them, business is business. They fearlessly tread into any industry in which they see a profit.
What makes the entrepreneur so special? To find out, I interviewed several business owners and delved into my own entrepreneurial soul.

Why start your first business?
Starting a business is hard work, especially in the beginning. Seventy to eighty hour work weeks are common. To keep yourself going during that early, “do everything yourself” period, you need to have a strong reason for why you are in business for yourself. Entrepreneurs demonstrate three basic motivations for starting their own business. Interestingly, when asked to single out their primary motivation, each of the three received about the same weight.

Pursuit of interests, passions or desire
Entrepreneurs are driven by passion. To many, this can simply be the passion to make money. To others, passions have more to do with why they are pursuing their chosen field or industry. Altruistic entrepreneurs often find themselves in the Senior Care or similar industry. Some have a passion for good food, wine or coffee. Performers are driven by their love of music, drama or magic. Entrepreneurs who chose passion for their principal reason tended to own one business that centered on their interest.
Unlimited income potential
Entrepreneurs like making money. One key reason for sweating out the early years of a business is the rewards of the later years. Work hard for a few years making a little money, and then leverage the work of others to make lots of money. Employees are being leveraged by their bosses to fulfill someone else’s dream. Entrepreneurs want to have their dreams fulfilled. They want to be the one on top of the compensation chain.
Forced by circumstance
Approximately one third of my respondents had to be pushed into entrepreneurism. I think this figure may be skewed by the current economic downturn. But many commented that they were glad of the push and have never regretted the decision to go it alone.

What was your greatest fear?
Not surprisingly, 100% of respondents had the same answer, uncertain income. I think the ability to face and overcome the fear of an uncertain income is the essence of what separates the 5% who start their own business from the 85% who think about starting their own business.

What was your greatest hope for starting your own business?

Personal freedom
Entrepreneurs love to be their own boss. They may be working 70 hours a week, but they are making that choice. They are also looking forward to working 20 hours a week, taking month long vacations and earning far more than they could ever make as an employee.
Financial success
Most of the world’s richest people are entrepreneurs. Many started with almost nothing. Entrepreneurism may lack the security of a steady job, but it also lacks the ceiling. The sky will never be the limit if you are working for someone else.
Inspire others
Entrepreneurs like to see themselves as world changers. They open shops in forgotten downtown business districts and inspire others to follow. They volunteer teaching young people how they can own their own businesses and lives. They raise money for causes. They reach out in their communities through religious and civic organizations. They make a difference wherever they are.

What advice would you give others who starting out on their first entrepreneurial venture?

Remember you are running a business, not a friendship club.
Small business owners often develop close relationships with their customers and vendors. They like to work with an attitude of trust and camaraderie. They do business on a handshake. The problem with that attitude is that someone will eventually take advantage of you. Customers will run up large receivables and never pay them. Vendors will misunderstand verbal orders or “forget” verbal terms. Be businesslike. Get written contracts.
Focus on marketing.
Too many entrepreneurs are so passionate about their business, they think everyone else is out their looking for what they have to offer and will surely find them. Believe me. They don’t come just because you build it. You have to get your consumers attention and get your message in front of them again and again.
Manage for results.
All your employees should know what is expected of them and perform consistently to your expectations. Often young entrepreneurs hire family and personal friends to help them in their new business venture. This creates several problems. Your cousin may not be very good at their job, and you may feel uncomfortable about firing them. Hire for expertise and fire for poor performance.
Watch your finances.
First, make sure you are adequately capitalized to start your business venture. Once you are open for business you will find yourself bombarded by people wanting to sell you advertising, equipment, memberships, services, etc. You will need some of these things, but be quick to say no and slow to say yes. Be sure you are getting a financial return on your investment. Track advertising results. Drop ads that aren’t producing.
Don’t wait.
Pursue entrepreneurism young. Many respondents wished they had taken the plunge earlier in life. A common pattern for professionals is to focus on their corporate job, put the kids through college, and then start their dream business as they enter a semi-retirement. If there is something you truly love doing, do it now.
Ed Wills
WFA Franchise Consultants