Let’s say you have a great idea for a business and you’re ready to take a chance and roll it out; is that the deciding factor—the idea? What if you’re certain it’s a “can’t miss idea”, and more important, you’re sure that now is the time? Should you make the jump?
Well…maybe. You see, being successful in business isn’t just about a great idea or even about an incredible product. In the end, ideas and products come and go, but to make it in business—and to make it over the long term—you have to be the right personality.
So the more relevant question is: do you have the temperament to be an entrepreneur, or put another way, do you think you have the right stuff to make it work?
There are non-business traits that are probably more important for a successful entrepreneur as a hot idea or winning product.
Current skills. Do you have the kind of work skills right now that can be readily converted into self-employment? If you do, your chances of succeeding will be substantially greater. While it’s probably true that most jobs can be converted into businesses somehow, it’s also a fact that some careers make the transition better than others. A person skilled at just about any type of repair work will be better able to strike out on his own than a corporate accountant, for example. If your skill set can be sold direct to the public, the deck is definitely stacked in your favor.
Sales and marketing ability. No matter how great your product line might be, more than anything else you’ll need the ability to sell it. Without sales there is no business! This isn’t to say that you need to be an accomplished sales person in order to make it in your own business, but you will need some ability to market and sell in order to have a chance of making it work. If the idea of selling turns your stomach, being self employed could be a major mistake.
Passions. Most successful business people are passionate about their work. In fact it may be their passion more than anything else that drives them. They will be passionate about their work, product line and business in much the same way others might be about sports, music or social lives.
Outside distractions. We all have distractions in life that compete with work for our time and attention. How many of these you have and how involved they are will go a long way toward determining business success or failure. What kind of family and social commitments do you have? What are your recreational interests? Obviously any attempt at having a business will be compromised if you like to play golf five or six days a week—unless of course golf is business you’re going into.
Security drive. A high security drive will be an albatross if you plan to start a business. Sales will ebb and flow and major deals can disintegrate overnight—are you emotionally prepared to deal with that reality? If not, you may be better suited for the steady paycheck that a job affords.
Your balance sheet. Your ability to survive the ups and downs of an unpredictable cash flow will be as important as any other factor in determining your success. A strong cash position, along with a low- or no-debt position will help you through the lean times. If you’re short on cash and/or carrying a few too many debts, it will be well worth your time and effort to turn those situations around before starting out on your own.
Money management skills. One of the classic advantages of working for someone else is that the employer effectively manages your finances by putting you on a steady paycheck. Because of that consistency, the ability to manage money isn’t as crucial as it will be if you’re self employed. As an independent business person you’ll not only have to manage an unstable cash flow, but you’ll also have to be well able to budget for contingencies—which seem more numerous once you’re off someone else’s payroll. As discussed above, you’ll have to have the willingness and ability to maintain a strong balance sheet at all times—saving money will be one of your most critical survival skills.
The purpose of this post isn’t to scare you off if starting your own business is what you’d like to do, but rather to get you to think about what drives you, and what steps you might need to take in advance in order to roll out your business.
Do you have your own business, or have you had one in the past? What advice would you give to a would-be entrepreneur?
(photo credit: Ben Sutherland)
This post is from FiscalGeek staff writer: Kevin Mercadante. I’m very excited to have him contributing to the site. You can find out more about him at his own blog OutOfYourRut.com.