Читать книгу The Owner's Manual for Small Business - Rhonda Abrams - Страница 10
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Thinking Like an Entrepreneur
Common Traits of Successful Entrepreneurs
Ability to develop a clear focus. You need to understand what makes your business different from your competitors’. Develop a vision and stick with it, rather than moving from one great idea to another. Many entrepreneurs fail because they’re always finding their next idea more enticing than their current activities.
Realistic expectations. If you start a diet expecting to lose ten pounds every week, you’ll soon be disappointed and give up. When your goals are more in line with reality, you’re much more likely to stick with them and be successful. Very few people “get rich quick.”
Willingness to plan. The most successful business owners are those who develop a clear set of objectives and devise a roadmap for achieving them. They study their market, competition, and operations and are willing to honestly examine the obstacles they are likely to face.
Flexibility and adaptability. While you need a concrete plan and a clear focus, you must likewise have the flexibility to respond to changing conditions. In business, as in life, all things change, and some things inevitably go wrong.
Ability to overcome the fear of making sales. At some level, every business owner must be a salesperson. You can’t be afraid to cultivate customers, motivate employees, nurture suppliers. You don’t have to have this skill when you start a business, but you’ll have to develop it to stay in business.
Willingness to work hard. There’s no getting around it; being in business means having to put in the hours to get the job done.
Clear personal goals. All of us have many competing goals. We want to make lots of money but be home when the kids get out of school. We want to have complete creative control but have a wide array of products and services. These goals are inevitably in conflict. To achieve success, you have to focus on what’s really important to you and what is achievable.
Experience. You needn’t have run General Motors to start a used car lot, but you should have some meaningful, related experience, either in your chosen industry or using the type of skills you’ll need, before setting off on your own venture.
What Inspires You?
When you think about your business, what do you hope for? To make a lot of money? Use your creativity? Have more flexibility in your life? Do you see yourself working alone or building a company with other employees? Do you hope your company grows very large or do you want it to stay small?
As you build and grow your business, it’s critical to understand what motivates you, so you can plan a company that responds to those personal needs. Otherwise, you can easily end up sabotaging a successful company. For instance, I’ve seen a fashion designer with a great need for creativity who ended up frustrated when her company grew so big she never had time to pick up a pencil. She started to torpedo her own success just so she could get back to the drawing board.
Entrepreneurs are motivated by what I call the Four C’s: Creativity, Control, Challenge, and Cash. Of course, we each want all four of these to some degree, but knowing which we want or need most can help us structure our companies to best achieve our goals.
Keep in mind there are sometimes trade-offs between personal goals. Wanting more cash often means having less control; staying at the center of the creative process may mean you need to have a partner or grow slowly.
Which of the Four C’s motivates you most?
The Four C’s
Creativity. Entrepreneurs want to leave their mark. Their companies are not only a means of making a living, but a way of creating something that bears their stamp. Creativity comes in many forms, from designing or making a new “thing,” to devising a new business process or a new way to make sales, handle customers, or reward employees.
If you have a high need for creativity, make certain you remain involved in the creative process as your company develops. You’ll want to shape your business so it’s not just an instrument for earning an income but also a means of maintaining your creative stimulation and making a larger contribution to society. But don’t overpersonalize your company, especially if it’s large. Allow room for others, particularly partners and key personnel, to share in the creative process.
Control. Most of us start businesses because we want more control over our own lives. Perhaps we want more control over how our good ideas are implemented. Perhaps we want, or need, more control of our work hours or conditions so we can be more involved in family, community, or even golf! Control is a major motivator for most entrepreneurs—usually more important than money. But how much control you need—especially on a day-to-day basis—directly influences how large your company can be.
If you need or want a great deal of control over your time, you’ll most likely need to keep your company smaller. In a large company, you’ll have less immediate control over many decisions.
If you’re a person who needs control, you can still grow your business larger. You’ll need to structure communication and reporting systems to ensure that you have sufficient information about and direction over developments to give you personal satisfaction. If you seek outside funding in the form of investors, understand the nature of the control your funders will have, and be certain you are comfortable with these arrangements.
Challenge. If you’re starting or expanding a business, it’s clear you like challenge—at least to some degree. You’re likely to be a problem solver and risk taker, enjoying the task of figuring out solutions to problems or devising new undertakings. Challenge-hungry entrepreneurs can be some of the most successful businesspeople, but they can also be their own worst enemies—flitting from one thing to another, never focusing long enough to succeed.
If you have a high need for challenge in your business life, it’s important to develop positive means to meet this need, especially once your company is established and the initial challenge of starting a company is met. Otherwise, you may find yourself continually starting new projects that divert attention from your company’s overall goals. As you plan your company, establish personal goals that not only provide you with sufficient stimulation, but also advance—rather than distract from—the growth of your business. (Or take up sky diving on the side!)
Cash. Every entrepreneur wants to make money. Perhaps it’s just enough money to provide a decent income; perhaps it’s so much money you can buy a jet. How much you want or need affects how you’ll develop your business. Will you need investors and when? Will you sacrifice control to grow the business quickly?
Usually, control is the primary motivator for entrepreneurs. Control can mean the ability to make decisions, to directly influence the success of the company, or even to have the flexibility of choosing what hours and days to work. Others are motivated by the desire to create something new, whether art or software. My personal top motivator is “challenge,” so I’ve developed a business that is always exposing me to new industries and management problems. Otherwise, I’d be bored. Those who are only motivated by cash often fail.
Do You Have What It Takes?
The cover story of a major business magazine carried the headline: “Do you have what it takes to start a business?” In the story, grinning entrepreneurs answered that question: “You’ve got to have a maniacal mind-set;” “I don’t need an excessive amount of sleep;” “The odds are, most times, you fail.”
If being in business means you have to be an obsessive insomniac doomed to failure, then why are these people smiling?
The fact is, that magazine got it wrong: you don’t have to be a compulsive workaholic to start a business. Millions of entrepreneurs run successful enterprises, and, thankfully, they’re not all obsessed solely with business. Most businesspeople find time for many other aspects to their lives—family, community, hobbies, religion, sports.
The multitude of successful small businesses might not make it to the Top 10, or even Top 100, list of “best companies,” but those lists focus almost exclusively on financial factors.
But money is not what motivates most entrepreneurs. What do most small business owners care about?
Creating something worthwhile. This doesn’t have to be a cure for cancer. It can be a new tool, a new computer program, a new widget that makes doing a job in your industry easier, or a service that helps people improve their lives.
Using a talent. Most people aren’t going to establish ballet companies because they’re amazing dancers, but lots of people start restaurants because they’re terrific cooks, go into the accessory business because they love to design jewelry, or make and sell custom cabinets because they’re great at woodworking.
Having more time for family. In today’s world, it’s hard to balance the desire or need to spend time with your family with most jobs. But by starting your own business, you may have more flexibility, so you can take the afternoon off to chaperone your daughter’s Girl Scout troop or take your aging father to the doctor.
Being your own boss. Many people start businesses because they get tired of seeing their supervisors make stupid decisions or of working in companies where they have little or no influence. Things may not always work out when you are your own boss, but at least you know the mistakes that affect your life are your own.
Creating jobs. If you want to make the world a better place, one of the things you can do is create good jobs for others. There’s justifiable pride in building a business that’s big enough to give other people work so they can feed their families, go to school, or pay their rent. And when you treat them fairly and create a positive work environment, you’ve truly improved the world.
You don’t need to be a compulsive workaholic to start a business.
Doing a better job. Nothing is more frustrating than working for a company that’s doing a lousy job. Knowing that you could serve the market better—improve the product, give better service, cut costs, treat employees more fairly—is a great motivator for starting your own company.
Bringing your dog with you to work. This isn’t only about dogs, it’s about having more control over your working conditions. It could be the ability to work from home, to wear casual clothes every day, or not to commute long distances. But having my dog with me was definitely one of my motives when I started my business.
In fact, that business magazine was out of touch with the reality of American entrepreneurship. Few entrepreneurs want to—or need to—be obsessive insomniacs to succeed in business. What successful owners of small companies have in common is that they’re motivated, self-directed, willing to take measured risks, determined, and optimistic.
If you have what it takes, you may not end up on the cover of a business magazine. But you may end up with the best small company in America: the one that meets your needs and reflects your values.
Your Chance of Success
After giving it careful consideration, you’ve finally decided to start your own business. But when you excitedly announce your decision at a family gathering, your brother-in-law Sheldon points his finger at you and says in his most ominous voice, “Fifty percent of all businesses fail in the first five years. Get a job.”
You’ve got far better odds of succeeding in business than is commonly believed. That’s because the statistics you’ll hear about business failures almost always mean business closings. In many cases, the business hasn’t failed, just changed.
For instance, I had my own—successful—consulting practice for many years. Like most sole proprietors, I reported my business income on my personal income tax return, using my own social security number. When I incorporated, the business got its own tax identification number, and I stopped filing a “Schedule C” on my personal tax return. That means my first business probably shows up in statistics as a business “death” even though it was actually getting larger.
To paraphrase Mark Twain, “Rumors of my death are greatly exaggerated.”
Overwhelmingly, businesses don’t die or fail; the owners close them for reasons unrelated to whether the business is making money.
Take restaurants, for instance. Restaurants have a notoriously high “failure” rate. You’ll often hear that 90% of restaurants fail in the first year.
In a study in Columbus, Ohio, Professor H.G. Parsa of Ohio State University tracked new restaurants from 1996–1999. In the first year, 26% closed. Another 19% closed the second year, and 14% the third. Collectively, 59% of new restaurants closed those three years.
Businesses typically don’t die or fail; owners close them for reasons unrelated to money.
Now, even though these numbers are much better than the 90% failure rate bandied about, it’s not particularly heartening to know that six out of ten restaurants closed in three years.
However, Professor Parsa found that reasons other than economic necessity made the owners decide to close. They cited divorce, poor health, and most importantly, an unwillingness to make the immense time commitment necessary as reasons for shutting their doors.
Survival Rates of Businesses
| First year: | 85% |
| Second: | 70% |
| Third: | 62% |
| Fourth: | 55% |
| Fifth: | 50% |
| Sixth: | 47% |
| Seventh: | 44% |
| Eighth: | 41% |
| Ninth: | 38% |
| Tenth: | 35% |
Source: Cognetics
In other words, they had what Dr. David Birch, former head of a research firm specializing in studying small business data, called the “I Had No Idea” syndrome. Would-be entrepreneurs don’t realize just how much is involved with running a business.
After running a business for a year or two, many people discover the effort is more than they anticipated. Suddenly, they’re the ones who have to keep the books, find the customers, pay the bills. When the reality sets in, many decide they’d rather return to the relative ease of having a job, and they close up shop.
“Historically about 95% of business endings have been because the owners have chosen to close rather than the financial condition of the company forcing a closing,” says Dr. Birch. “While about 500,000 businesses close each year, business failings are only about 50,000 … Once you’ve hit five years, your odds of survival go way up. Only two to three percent of businesses older than five shut down each year.”
The lesson? The best way to get over the first tough years is to be prepared. Find out as much as you can before you open your doors. Talk to people who run their own businesses, especially businesses similar to yours, and get a realistic understanding of the time, finances, and emotional resources necessary. Create a business plan. Keep your eyes open—not to the possibility of failure, but to the very real demands of running your own business.
Once you make it over the hurdle of adjusting to the entrepreneurial life, your chances of success are excellent. And Sheldon will be wrong again.
Your Entrepreneurial Type
Most business books and experts will tell you it takes a certain type of person to be an entrepreneur. They might say you have to be outgoing, risk-taking, and able to make sales.
It’s just not true. Look around: You may know someone who’s successful but is a grouch, hates to take a risk, or doesn’t get up before noon. They can be an entrepreneur—a successful entrepreneur at that—if they find a business that suits their entrepreneurial type.
What do I mean by “entrepreneurial type”?
When they first consider being in business for themselves, most people think about their interests. But that’s just a starting point. Let’s say you’re interested in antiques. Does that mean you should sell antiques, appraise them, or refinish them? Even if you want to sell antiques, does that mean owning a retail store, selling them on eBay, or finding bargains at flea markets and marking them up for sale to retail stores? Your interest is clear—antiques—but you’ve got a number of different ways to build a business around that interest.
Based on my experience with thousands of entrepreneurs, I’ve come up with a number of entrepreneurial types. Here are a few of the most common:
Advisor. Lots of people would like to be paid just for giving advice; usually it takes a great deal of experience or education to be able to do so. Some kinds of advisors include attorneys, accountants, and financial planners. But many of the best salespeople also consider themselves—and are considered by their customers—to be advisors. For instance, I look to my insurance salesperson to responsibly guide me in my choice and amount of coverage.
Broker. A broker is a go-between—someone who helps others find the products or services they need. They may charge a percentage of the sales price of the item brokered, a flat fee, or an hourly fee. Real estate agents are perhaps the best-known type of broker, but you could be a broker for almost any kind of product or service (except those with very narrow profit margins). You could, for instance, be an auto, mortgage, business, or even a wine broker. If you’ve got a strong area of expertise or interest—and enjoy shopping—being a broker is a low-cost way to go into business.
Builder. One of the largest segments of entrepreneurs are self-employed contractors—carpenters, electricians, plumbers, etc. Whether you’re building a whole housing development or laying the floor in one apartment, if you enjoy seeing something created from nothing and you have the necessary skills, being a builder may be for you.
Caretaker. Our society has a great need to have people and things taken care of, maintained, assisted. That opens up lots of opportunities for those entrepreneurs who are patient and nurturing. If you’re a person who can be consistent over time and see yourself as a helping personality, you may be the caretaking entrepreneurial type.
You can be a successful entrepreneur if you find a business that suits your entrepreneurial type.
Creator. You may be a person with a vision. Creators include graphic or fashion designers, inventors, and business builders. Creators often need to team up with other entrepreneurs who are strong in sales or operations to help make their vision a financially viable reality.
Owner. If you’ve got money to invest, you might be able to put your capital to work for you. Whether you invest in stocks, real estate, vending machines, or businesses, being an active “owner” enables you to leverage your money into additional income without having to show up to work every day.
Seller. If you’re good at sales, you should never have to go hungry. Great salespeople are always in demand. Many of them are self-employed, typically working on commission. If you’re good at selling, and willing to work hard, you can earn a lot of money from sales.
So just about anyone can be an entrepreneur—a successful entrepreneur. The key is figuring out what entrepreneurial type suits your personality and your skills.
From Employee to Entrepreneur
This year—as every year—over a million people will start a business in America. And many millions more will start businesses worldwide.
Most will start their companies because they’ve always wanted to own their own business. Some, however, will become entrepreneurs because they’ve been laid off from a job.
Whatever brings you to entrepreneurship, you’ll quickly find there’s a big difference between being someone else’s employee and working for yourself. Much of that difference is welcome and wonderful. I certainly think so, since I’ve been self-employed since 1986. But, frankly, if you’ve been an employee for a long time—especially for a big corporation—you’re going to find some of the changes are tough to get used to.
What kinds of changes can you expect when you go from employee to entrepreneur?
Money. From now on, every dollar is your dollar. Even if you have investors or partners, at the end of the day, money becomes a lot more real. Whether you’re spending it or earning it, every dollar has a direct impact on your personal income and well-being. Even if you were a conscientious employee, always watching the company’s bottom line, you’re going to find you have new respect for money when you’re the last one paid, and every dollar spent or unearned could have ended up in your wallet.
Money consciousness is going to take a number of different forms. First, you’re going to view expenditures a lot more carefully. For instance, if you worked for a Fortune 500 company, you probably didn’t think a great deal about how much you spent on office supplies. But when you have to earn every dollar yourself, and you understand how hard money is to replace, that $29 label maker may seem an unnecessary luxury, especially when you know the same $29 could be used to buy clothes for your kids.
From now on, every dollar is your dollar.
Control. This is definitely a two-edged sword. One of the best things about being your own boss is that you get to make the decisions. You no longer have to follow seemingly senseless corporate mandates. But with control comes responsibility, and you’re going to find you have to make oodles of decisions.
There are the big decisions when you first start, such as what kind of business to go into, what kind of financing to look for, where to locate. But the hundreds of smaller choices can be just as intimidating—whether or not to exhibit at a trade show, what kind of insurance to buy, when to hire employees, which tasks are most important, and on and on. It can be exhausting, rather than exhilarating, when so many decisions end up on your desk.
Humility. Few things instill as much pride as earning your own living. When you do that in your own business, you have the right to be especially proud. But with that pride comes a lot of other stuff too, such as running the errands, stuffing the envelopes, apologizing to obnoxious customers, emptying the garbage. I once heard about a man who was self-employed just one day: when he went to start work and realized there was no one else to order a desk or phones, he quit.
Risk. Perhaps the biggest change of all is going to be your relationship to risk. When you’re an employee, you’re concerned with taking care of your career, and it’s typically wiser to take fewer risks and thus make fewer mistakes. In your own business, however, taking fewer risks and doing less isn’t an option.
If you think these differences seem overwhelming, don’t be completely put off by the idea of becoming an entrepreneur. One of the greatest benefits in going from employee to self-employed is that you discover a lot about yourself, including the many talents you never realized you had.
It’s the Little Things
Here’s a quiz: When you meet someone new, what’s the second question you’re most likely to be asked? Answer: “What do you do?” It’s not just to figure out whether you’re a welder or a writer—it’s to determine how important you are. For the self-employed, that question can be tough on the ego.
In America, we associate status with our jobs. We feel good about having a fancy office or important job title. Even if we have an entry-level job, if we work with a big company, we often feel a sense of reflected status from the name of our employer.
So when you go from employee to entrepreneur, giving up the trappings of status and success can be tough. And it can be the little things that make you most uncomfortable: standing in line at the post office instead of going to the mail room, buying your own office supplies, answering your own phone.
Even good things can make you feel awkward: giving up ties or pantyhose, going to a child’s school in the middle of the day, not having to report to anyone.
Even more frustrating—though you’ll get over it—is when you make a lot of money, but no one knows how well you’re doing. After all, you still work at home and wear jeans. I had worked for myself for seven years before my friends took me seriously. What changed their impression? I got my first overseas client. Trust me: when someone pays you to go to Australia, you suddenly get respect.
But I knew I was serious long before that. Although I had given up a job where I had an office with a view, assistants, and an expense account, I didn’t miss any of it (well, maybe the expense account). Part of the reason is that early on, I took some steps to make myself feel good about being self-employed.
I set up a part of my living room as my “office,” printed up business cards, and changed the way I answered my phone (from “Hello” to “Rhonda Abrams speaking”). More importantly, I found a symbol—a status symbol—to remind me of my importance.
For me, it was flowers. My first couple of years in business, I didn’t have much money and every penny counted. I lived on cheap spaghetti. But every week, I bought myself flowers for my desk. Somehow, looking at those flowers made me feel like I’d arrived at a “real” office.
Little things matter. You can’t afford the assistant, you won’t necessarily have a separate room for your office, and if you travel, you’re going to take economy instead of business class. But you can find a number of little ways to remind yourself that you’re now the owner of a business.
Status Symbols for the Self-Employed
Business cards. Absolutely! You can’t exist without them. They are a must!
A telephone line just for business calls. This is especially important if you live with others.
Name your company. Even if you choose “Chris Smith and Associates,” you’ll feel more like you’re in business with a business name. (But keep in mind that if you use any name other than your own, including “and Associates,” to be perfectly legal, you may have to file a DBA (“Doing Business As”) statement with your local county, city, or state.)
Give yourself a title. Hey, you really can grow up to be President! In my company, I’m the “Chief Entrepreneur.”
Get dressed every day. No, of course, I didn’t think you were going to work nude. But how about getting out of those sweats?
Set up an “office.” Even if your office is just a desk in the corner of the family room, set aside some space used just for your business.
Get your own domain name for email. It sounds a lot more professional to have an email address such as chris@yourbusiness.com than an email address of chris12345@yahoo.com. It’s not very expensive or difficult, and it helps your customers or clients remember you.
Get a gadget. Hey, we all like our toys. Having a cell phone, a cool computer, or other device can make you feel like you’ve arrived.
Facing Our Fears
When I started my business in 1986, my two neighbors were terrified at my decision. Both of them worked for a huge bank, and they couldn’t understand how I could give up the security of a job for the insecurity of owning my own business. “Aren’t you afraid to give up a paycheck?”
Of course I was scared. Starting a business is a big step. As frightening as it is to start a new job, opening up your own shop is even more fearsome. But I knew I had to face my fears if I wanted to change my life.
Fear is a funny thing. Many times, we willingly do things that make us afraid. We line up for horror movies, terrify ourselves on roller coasters, or pay large sums of money to skydive out of planes. Some people enjoy bungee jumping. Talk about scary!
Many of the fears we face in business, we willingly bring on ourselves. The very fact that we are in business for ourselves, rather than staying within the perceived security of a job, is a choice we make.
All too often, we try to run away from our fears, in both our business and our personal lives. Yet, when we try to escape our fears, they often overtake us. If we’re afraid of failure, we might not even try. If we’re intimidated by success, we may unwittingly avoid those actions that lead to achievement. When we fear change, we stop ourselves from attempting new things.
Fear inevitably leads to procrastination. We all put off doing things that scare us. We fear confrontation, so we avoid dealing with an unhappy customer, counseling an underperforming employee, working things out with a family member. We delay starting a project because we’re afraid the client won’t like it.
All too often, we try to run away from our fears, in both our business and our personal lives.
But when we allow our fear to stifle us, things only become worse. We now have less time to finish the project, the customer is even unhappier because his complaints weren’t dealt with, the employee keeps making mistakes.
Being in business, I’ve had to learn to battle my fears. Few things in life seem as terrifying as making your first sales call, taking out your first loan, or firing an employee. But there may come a time when you have to do some of these or you won’t survive.
Our fears never go away—they just change over time. About a year after I started my consulting company, I asked a friend who had been in business for fifteen years when you get over the fear of never finding another client. His response: “Never.” He wasn’t exactly right—that fear went away, but I’ve got new ones.
By now I know I’ll always have work. Instead my fears focus more on making the right decisions about which directions to grow my business, whether I’m utilizing or motivating employees in the best way, and the one fear that, indeed, never goes away—can I manage my cash flow well enough to grow my business and pay my bills at the same time?
I’ve learned that fears, once faced, become less scary. Each time we triumph over a fear, we grow in confidence. We learn that most of the horrible things we fear never come to pass. Even when some of our fears are realized, we find that they’re more tolerable than we imagined. We learn we can survive.
The next time you’re afraid, ask yourself, “What’s the worst thing that can happen? How likely is that?” Then ask yourself, “What happens if I don’t do the thing I fear?” Because there are costs—sometimes huge costs—to not facing our fears.
Remember my two neighbors who were afraid to leave their secure jobs? The huge bank for which they worked was acquired. Both of them lost their jobs.
Sometimes the only way to survive is to face our fears—by looking at them straight on and saying, “I can do this even though I’m afraid.” Still, I’m not taking up bungee jumping—some fears I’m willing to live with.
Learning Courage
“I’d love to have my own business, but I’m not a risk taker.”
I’ve heard that statement hundreds of times from people who dream of being entrepreneurs. They recognize that at the core of being in business is the ability to take risks. But most leave it at that—thinking you’re either born a risk taker or you’re not. That’s not true. You can actually learn to be braver in both your business and your personal lives.
Taking risks is scary; you’ll be afraid. The question is whether you let that fear paralyze you or you learn to deal with it. Conquering fear is a skill, not an art. With determination and practice, you can acquire it over time.
First of all, you have to learn that fear is normal. We look at a woman who’s left a high-paying job to start a business, and we think, “Gosh, how come she’s not afraid?” The truth is she is almost certainly frightened. Risk takers live with lots of fear, but they deal with their fears rather than turn away from their dreams. I once heard that Frank Sinatra got nauseous before every performance, he suffered so much from stage fright. What would have happened if when he was twenty, he decided he was just too afraid to sing? Remember, courage is not the absence of fear but the willingness to overcome it.
Ask any successful entrepreneur how they felt in business the first few years and they’re likely to say, “Scared out of my mind!”
They’ll also say they felt exhilarated, liberated, challenged, and more alive than they’d ever been. Because the flip side of fear is the adrenaline, motivation, and even power it gives you (that’s why people like to skydive and bungee jump).
You can train yourself to get used to living with a certain degree of fear. The best way is not to jump into a big risk with both feet, but to first challenge yourself with smaller efforts.
Conquering fear is a skill, not an art. With determination and practice, you can acquire it over time.
I’ve learned a lot about conquering fear from participating in sports. I’ve gravitated to sports I’m somewhat afraid of—horse-back riding, skiing, ice skating. With each, the fear of getting hurt never left me, but as I acquired greater skill in the sport, I also gained greater skill in accepting those fears. The fears became an increasingly small part of the overall experience.
Athletics can also help you get used to falling down and picking yourself up again—a skill you’ll definitely need in business. In the sports I play, I fall down a lot. I get bruised regularly, and I’ve broken a rib horseback riding and cut my head ice skating. But I continued.
You learn you can live with bruises; they go away. And almost no falls are truly life-threatening. The same thing is true in business. You’ll make mistakes. They’ll bruise your ego or your balance sheet. They’ll knock the wind out of you, and you may have to sit it out for awhile. But if you get back in, you’ll be stronger, better, more confident.
A ski instructor once told me, “If you’re not falling, you’re not learning.” So one thing I do when I fall—in sports or in business—is ask myself, “What did I learn?” When I make a mistake, I try to reflect on what I learned from that experience.
Famed 49ers football coach Bill Walsh told me, “Some people think it’s either win or lose. But every game is followed by another … You’re always preparing for the next one … Even in the process of losing … you’re improving and refining your skills, and how well you perform when you lose is important in determining whether you will eventually win.”
So be gentle on yourself when you take a risk and it doesn’t work out quite right. Don’t use the word “failure.” Very few of us fail entirely. We just fall down, make a mistake.
You’ll find it far easier to take more risks if you pick yourself up, learn from each experience, forgive yourself, and move on.
It’s also important to remember the risks associated with not taking risks. Often we think the safest course is to stay in one place, try to be content with a miserable situation. But that might be the worst course of action of all. We may have misjudged the level of security we truly have. Or even worse, we may slowly eat away at our own sense of worth, our own happiness.
So if you’re one of those who think you’re not a risk taker, why not challenge yourself? Take a few small, unimportant risks. Allow yourself to make mistakes. Try again. You may surprise yourself and find you’re more of a risk taker than you ever imagined.
Succeeding in Your First Business
I’m what’s called a “serial entrepreneur.” I’m now running my fourth business; I doubt it will be my last. I’m not alone. Many successful entrepreneurs build one company after another, expanding the scope and size of each subsequent company.
If you’re new to the entrepreneurial life, it’s helpful to know your first business may not be your last. Many first-time entrepreneurs believe they have to be a huge success the very first time they’re the boss. They don’t. You can become a big success by starting small.
It’s natural—and desirable—to have big dreams and big goals. Just remember, you’re going to be learning a lot this first time out. You’re getting used to dealing with customers, making sales, devising marketing plans, handling finances, adjusting to the risk and responsibility. All of that takes time.
Moreover, as you increase your knowledge of your market, your product or service, and you make additional contacts, you’ll almost certainly decide to change many aspects of your business. Eventually, you may choose to close your first business and start another.
Since it’s your first business—not your last—why not start with what I call a “training-wheel business?”
By “training-wheel business,” I don’t mean to be insulting, or to imply that’s it a business to be run by kids. I mean choosing a type of business that provides enough support to the first-time entrepreneur so that when you make the inevitable mistakes, you won’t fall so hard.
My own “training-wheel business,” for instance, was my management consulting practice. I was a consultant for fourteen years, and if I didn’t attract and retain clients, I couldn’t keep a roof over my head or food on my table. It was certainly a serious—and fortunately, successful—business.
But consulting is the type of business that is a perfect example of a “training-wheel business.” Consulting costs little to start: I needed a computer, business cards, and a phone line. The overhead was low: I worked out of my home and my advertising consisted of attending networking events. All of that meant I had more time to build and grow my business; I had more time to learn.
Making a product? Sell it first at local crafts fairs instead of trying to get it in department stores. Becoming a consultant? Start with small businesses instead of trying to land corporate clients.
If you’re new to business, give yourself the opportunity to learn. After all, as I’ve learned, you’ll have plenty of other chances.
Keys to a “Training-Wheel Business”
Low start-up costs. If you need a lot of equipment, facilities, or staff to start, you’ll have to borrow or raise money or use up all your savings in start-up costs. Avoid business concepts that require large up-front expenditures, so you can get into business sooner.
Low overhead. Low fixed expenses will make it easier to pay your monthly bills. Avoid businesses such as manufacturing and retail, which require inventory, raw materials, high rent, or high labor costs. Instead, choose businesses with low overhead such as independent sales, consulting, and most service businesses.
Proven product or service. It’s hard to sell customers on a new idea or new product. It’s a lot easier to get a piece of an existing market than to build a new one—even if you have competition. If your product or service is too new, it takes much longer to build a customer base.
Established marketing channels. If you have to be creative to reach customers, it’s going to cost a lot and take time. It’s much easier to sell products or services through proven methods such as trade shows, networking events, and newspaper advertisements.
Simple sales structure. Many first-time entrepreneurs are attracted by multilevel—or network—marketing programs. These have complicated sales structures, focusing on building “down lines.” Avoid these. Instead, look for businesses where you sell directly to the customer/client or with very few layers between the manufacturer and the customer.
A niche. It’s much easier to compete for customers when you specialize. By clearly targeting a specific market—a specific industry or demographic group—you’ll make the most of your marketing dollars and can command higher prices.
