Starting a business sounds so glamorous, doesn’t it? We can call our own shots, set our own hours, have it be just what WE want...no answering to anyone.
Sounds easy, right? Wrong. Passion aside, starting and maintaining a business takes a lot of skill in less-than-glamorous areas like budgeting, pricing, record keeping, legal services, understanding tax laws and laws of incorporation, property or renter management, and often how to be an employer. And unless you're an accountant or tax expert, these activities likely have nothing to do with the passion and vision that inspired a business in the first place.
Now, I’m not trying to dissuade you. Seriously!
Starting a business may be the best choice for you. But before you jump into the deep end, it’s a good idea to do some research.
Before investing your time and resources into a venture that statistically has a 44% chance of failing in less than four years[1], you need a realistic picture of what it will take to succeed to determine if you have the “right stuff” to become a successful entrepreneur.
According to investopedia.com, there are 10 characteristics of a successful entrepreneur. Here are 3 that stand out for me:
1. Risk Taking
I don’t want to be a Debbie Downer, but I have to admit that at this stage of my life, I would be hard-pressed to identify myself as a “risk taker.” I hate saying that! When I was younger, it seemed much easier to “go for it,” whatever “it” was. I guess I would say that when you have less, it feels like you have less to lose.
Being an entrepreneur involves taking huge personal and financial risks. Maybe this is exactly where you are, and what you want to do. Many people have amassed enough resources to fund a “second round” career, and maybe that's you. OR, maybe you’re so filled with passion and ambition that, resources or not, you’re bound and determined to make this work! Whatever your situation, it’s important to know what you are willing to risk to bring your dream to fruition.
2. Understanding Your Offering and its Market
Remember, just because you’re passionate about your product doesn’t mean everyone else will be. It’s in your best interest to research the market! Find out what people are buying, and spend time determining what makes your offering unique, special, and appealing.
A market analysis, which you will do if and when you write a business plan, is critical. (This will be covered in your NAT 306 Holistic Health Consulting & Business Skills course if you’re enrolled at ACHS). A market analysis looks into “the size of the market both in volume and in value, the various customer segments and buying patterns, the competition, and the economic environment in terms of barriers to entry and regulation.”[2]
With a more in-depth understanding of your market, you can tailor your offering. A slight adjustment could mean the difference between selling one and selling out.
3. Business Acumen
Going back to that dismal 44% failure rate statistic I shared in the beginning of this blog…
What is most interesting about this statistic is why this level of failure exists. The number one reason cited is general “incompetence.” People jump in without knowing enough. The pitfalls, according to the Statistic Brain report are[3]:
- Emotional pricing
- Living too high for the business
- Nonpayment of taxes
- Lack of pricing knowledge
- Lack of planning
- Lack of financial knowledge
- No experience in record-keeping
Another one-third fail simply because they have unbalanced experience or lack of managerial experience.
Think about this long and hard, folks! Businesses fail because owners don’t know how to run a business. These statistics are important. They paint a not-so-pretty picture of why choosing the route of “entrepreneur” is so challenging. If passion and vision were all that were required for success, this would be a much different picture.
Successful entrepreneurs are, first and foremost, business people. They are people who understand concepts like pricing, profit margin, market share.
So What is the Alternative if You’re Not Ready to be an Entrepreneur Yet?
I know, I know. You have a great idea, and I’ve just squelched your enthusiasm. Well, if in reading this you have determined that you need to focus on something less risky for the moment, here are some directions to consider:
1. Find a Buddy
As Helen Keller said, “Alone we can do so little, together we can do so much.” Partnership with one or more people you trust is a great option for success. Look for others who share your passion and who possess skills that complement and round out yours.
Let’s face it, it’s so much more fun to work on something with someone. Plus, as you are analyzing the market and setting prices, the additional point of view can help ensure you don’t miss something important. But a word of caution: just like in our personal lives, finding that “right” person can take time. Be sure to vet your potential partners carefully.
2. Pitch and Hitch
If you have developed a great product, you could look for an existing company that might be interested in it. Like the popular TV show Shark Tank, you’ll need to focus on pitching your product. Ryan Himmel discusses this process in the article “How Can I Pitch My Product to Large Companies?” for Entrepreneur magazine. Should this strategy work, you would have a larger company with resources backing and marketing you and your product that you could “hitch a ride” with or they might just sell it for you outright.
3. Drink the Kool-Aide
In my work coaching graduates, I find it interesting that many express dissatisfaction with the notion of working for an existing company. It’s almost like it’s “selling out.” This confuses me because there are a lot of fantastic companies out there. And aligning yourself with one that can use your unique gifts can be quite rewarding! Plus, you won’t have to deal with all the business stuff and can focus on your gifts. Check out the ACHS Job Board for inspiration.
4. Choose Happiness
My mom has always said, and continues to say, “I just want you to be happy.” I love this simple but powerful sentiment. Whichever course you choose, the most important thing is that you find joy and happiness in what you're doing. You might be the ideal personality to dive in to the deep, wavy pool of entrepreneurship. And if you’re not, that’s okay, too. Either way, go for the joy and you’ll never go wrong.
References
[1] Statistic Brain. (2016, January 24). Startup Business Failure Rate. Retrieved from http://www.statisticbrain.com/startup-failure-by-industry/
[2] The Business Plan Shop. (n.d.). How to do a market analysis for a business plan. Retrieved from https://www.thebusinessplanshop.com/blog/en/entry/market_analysis_for_business_plan
[3] Statistic Brain. (2016, January 24). Startup Business Failure Rate. Retrieved from http://www.statisticbrain.com/startup-failure-by-industry/
Disclosure of Material Connection: I am the Community Programs & Events Manager
at American College of Healthcare Sciences, the Institution that publishes this blog. However, all opinions are our own. If this blog contains affiliate links, they will be marked with an asterisk. I am disclosing this in accordance with the Federal Trade Commission’s 16 CFR, Part 255: “Guides Concerning the Use of Endorsements and Testimonials in Advertising.”
This article is for informational purposes only. It is not intended to treat, diagnose, cure, or prevent disease. This article has not been reviewed by the FDA. Always consult with your primary care physician or naturopathic doctor before making any significant changes to your health and wellness routine.
