Jul 112017
 
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Being An Entrepreneur Is The Only Way To Control Your Destiny

One of the perks of being an entrepreneur is that you control your own destiny.

Well, sort of.

In reality, regardless of what you do to make a living, there will be factors beyond your control. Those factors may, of course, have an impact on your destiny.

When compared with other ways to make a living, though, it’s hard to find options that give you as much control as being an entrepreneur.

If, for example, you work for someone else, your destiny is largely in that person’s or that organization’s hands. The reality is that tomorrow, or even a minute from now, your employer could notify you that your services are no longer needed.

Your employer may tell you this because you’re not doing a good job, over which you do have a large degree of control, of course.

However, they may also tell you that your services are no longer needed due to all sorts of other factors.

For example, your job may be “offshored” or outsourced to some other place in the world. Or, due to no fault of your own, and perhaps even due to no fault of your employer, the company’s sales may be declining and the company may no longer be able to afford to have you on the payroll.

So, how is being an entrepreneur different in terms of controlling your own destiny?

Well, in some ways it’s very different, and in other ways, it’s similar to working for someone else.

Let’s look at the differences and similarities.

When you are an entrepreneur (i.e. self-employed, as a simplified definition in this article — I realize there are varying views on the definition of “entrepreneur”), you’ll see the following “control” differences and similarities, compared to working for someone else:

  • You control your schedule. Your employer doesn’t control your schedule, at least, as you do not have an employer other than yourself. That said, you do have all sorts of constituencies that will have an impact on your schedule, including customers, investors, partners, employees, service providers, etc. So, in a nutshell, you’ve traded your employer for a series of other “bosses”.
  • You control how much you make. In reality, how well your company does controls how much you make. So, you can’t just say I want to be paid a million dollars per year and the money shows up on your doorstep. You have to be strategic and you have to be willing to work hard, but the good news is that if you work hard enough for a million dollars to come in, you’ll likely be keeping a lot more of it (with controlled expenses) than you would have if you were on someone else’s payroll.
  • You control how hard you work. Well, to be clear, you largely control how hard you work if you’re working for someone else, too. Once you become accustomed to being an entrepreneur, though, you realize that you don’t mind putting in long hours when it’s for your bottom line and not for someone else’s.
  • You control your stress level. Again, regardless of whether you’re an entrepreneur or an employee, you are in charge of controlling your stress level. As an entrepreneur, you may have a bit more flexibility in structuring your schedule and your activities, so that you’re better able to manage your stress level. However, in many cases, since you’re the “chief cook and bottle washer” (i.e. the buck stops with your for everything), often your stress level will actually go up relative to what it was as an employee.  As with hard work, though, you’ll likely not mind more stress so much when it’s for your business, rather than for your employer’s business.
  • You control whom you work with. This may be one of the biggest perks of being an entrepreneur, especially when you reach a level of success that gives you some flexibility. You have the last say on who works at your company, the customers you do business with, the service providers you use, etc. This is very liberating! It gives you the opportunity to only work with and help people that you like. This isn’t true for all businesses, of course – if you have a retail business dealing with the public, for example, you may not like every customer that walks through the door. If you own a service business, on the other hand, you typically can “fire” (or never “hire”) clients who you don’t want to help, for most any reason.
  • You control what happens when you retire. This assumes, of course, that you’ve built a business that can survive without your presence. If you haven’t, then the business will close when you decide you’re done. If you have, then you’ll be able to retire knowing that your business will continue to serve others, in the hands of the subsequent owners. It’s satisfying to know that you’ve built a business that not only provided for you and your family, but also that will continue to serve customers into the future, and may even continue to support your family, depending who the subsequent owners are and how the deal is structured when you sell your business.
  • You control whether you get fired. Bringing the story back to the beginning of this article, where we talked about the fact that your employer can fire you at any time, being an entrepreneur is no panacea in this regard. Subject to the terms of your agreement, clients can also “fire” you at any time. That said, for your sake, I hope that you will not have just one client or just one customer! If you build a diversified set of customer and clients, then if just one fires you, your business is not done. The same cannot be said for the situation where your (one) employer fires you – in that case, your “business” is done and you must find another job.

This list could go on, but you get the idea: As an entrepreneur, you have more control over your destiny.

That does not mean that things get easier than when you’re an employee, but it does mean that you are in charge – and you get all the good and bad things that come with being the head honcho. The sky is the limit, but the downside is yours as well. If that works for you, then being an entrepreneur is absolutely the way to go!

 

Paul Morin

paul@companyfounder.com

www.companyfounder.com

 

 

 

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Apr 062014
 
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What Boomer Businesses Have Going for Them

By Lynne Strang

John Olson was 40 years old when he founded Graystone Industries, a Georgia-based pond and fountain supplies business. Today, Olson’s company is among the leaders in its industry. But what if he had started it ten years earlier?

“It would not have been successful,” he says. “I could not have run a company as a younger man.”

Olson isn’t the only 40-and-older business owner who feels this way. Between 2011 and 2013, I interviewed dozens of late-blooming entrepreneurs to write a book about the success principles they used to start and operate their businesses. Most said they could not have started a business in their 20s or 30s — or if they had, it wouldn’t have turned out as well.

That revelation is noteworthy for those who dream of owning a business but wonder if they’re “too old.” If you count yourself in this group, you can stop wondering. For some people, a later start may increase the odds for entrepreneurial success because it allows time to develop certain characteristics and assets. Among them:

A bigger and better network. In entrepreneurship, the “It’s not what you know, it’s who you know” adage matters. The longer you’re around, the more people you know – and the more likely it is that you’ll have the connections needed to open doors, obtain technical advice, market products or services and find the right help.

A stronger financial position. A later start can provide an opportunity for entrepreneurs to accumulate personal savings — the most significant source of funding for startups, found a 2009 survey of entrepreneurial company founders funded by the Ewing Marion Kauffman Foundation. And while banks usually don’t lend to a first-time entrepreneur, an older one may have a chance. That’s because he or she has had time to build financial assets, establish a credit history and cultivate relationships with lenders.  

A commitment to customer service. Many 40-and-older entrepreneurs are passionate about great service for customers because they’ve been one for so long. They understand the frustrations of long waits, unanswered phones, unreliable quality and indifferent salespeople. As entrepreneurs, they tend to be patient when resolving service issues and practice the Golden Rule. This wins customers’ loyalty and keeps them returning for more.   

More resilience. Older entrepreneurs have lived through peaks and valleys – an inevitable part of starting and operating a company. For younger business owners who haven’t endured as many life events, lean times and dips in business may cause more angst. When you’ve weathered a lot of storms, you know the sun will emerge again eventually.

A grip on reality. People who start businesses after age 40 tend to be more practical about timelines, resources and expectations, which helps them set attainable goals. Among those who concur with this idea is Ken Yancey of SCORE, a nonprofit that provides free support for aspiring and new business owners. At a recent Senate hearing, Yancey pointed out that “encore entrepreneurs” have sensible financial expectations and are “realistic in their scope and projections.” 

Self-knowledge. Older entrepreneurs know who they are and what matters to them. With this self-awareness, they can build profitable businesses that also reflect their core values and provide personal gratification. Julie Savitt, owner of Chicago-based AMS Earth Movers, is a prime example. “It took the first 40 years of experiences to identify the strengths and weaknesses that define who I am today,” she said.

Not every boomer who wants to start a business is cut out for it, of course. If you haven’t followed through on your entrepreneurial idea, it’s critical to evaluate why. Inaction may indicate habitual procrastination, a lack of commitment or motivation, poor time management skills, inadequate resources or an inability to focus. Each of these could doom a company before it gets off the ground.

On the other hand, an unborn business could be the result of a timing issue. For a variety of reasons, such as young children who needed full-time care or a spouse’s demanding career, the earlier years may not have been conducive for a startup. In addition, student loans, car payments and/or other typical bills for younger families may have required a steady income and made it difficult to set aside seed money. The passage of time can remove or ease these obstacles, clearing the way for a successful business undertaking.

The bottom line? If you possess the drive – as well as a viable business idea and sound financial footing – an ideal time to act is when you have gray hair. The second half of life brings wisdom and other benefits that weren’t available earlier. By applying this life experience to your business, you just might take it to another level

Lynne Strang is a writer and communications consultant based in Northern Virginia. She is the author of “Late-Blooming Entrepreneurs: Eight Principles for Starting a Business After Age 40.” Her email address is lbstrang@gmail.com..

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Dec 172012
 
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entrepreneurship

Entrepreneurship Never Promised You A Rose Garden

It always surprises me when people tell me that entrepreneurship is tougher than they thought it would be!

In some ways I guess it’s not too surprising.  In the media, we hear a lot about extraordinarily successful entrepreneurs like Richard Branson.  We hear how they’ve made billions of dollars and we get a glimpse into the lives of luxury they’ve earned through their entrepreneurial toils.

What we don’t see as much in the media are the stories about the countless times such entrepreneurs have been knocked down and gotten back up.  Thus, the image we see in the media glorifies entrepreneurship and skews our perspective on what it takes to become successful as an entrepreneur.  That media image tends to underemphasize the importance of persistence in the stories of every successful entrepreneur.

So if entrepreneurship is not a “rose garden” but rather a constant and never ending challenge, why do we do it?  Answer this question honestly in your own case.  If you’re an entrepreneur, why have you signed up for a lifestyle that gets glorified, when in fact, for most entrepreneurs, it presents challenges beyond what they likely ever would have seen in a 9-5 job?

In my case, I’ve signed up to be an entrepreneur for a variety of reasons.  Here are a few that come immediately to mind:

1.)     I’ve been an entrepreneur since I was a young kid.  I’ve never seen myself as anything else.

2.)     I feel more comfortable as an entrepreneur than I do as an employee.

3.)     I’ve never bought into the notion of “job security”.  There may have been a time when you could expect to reach “gold watch” (upon retirement) years at one company, but those days are long gone.

4.)     I like the idea that my success or failure is driven in great part by the thought and effort I put into my endeavors.  Notice I didn’t say that it’s driven exclusively by my efforts, as I’m aware that in order to succeed as an entrepreneur, you need the help of a lot of people.

5.)     I like to work hard (and smart) and it gives me more satisfaction to know that the extraordinary effort I invest in my ventures will benefit me directly, rather than indirectly.

6.)     I’ve always felt like entrepreneurs are “my people”.  I admire and respect those who are willing to come up with an idea, launch it, and drive it toward success, even if the journey is not direct and there’s always some course correction necessary along the way.  I’ve always wanted to be one of those people.

7.)     I believe that without entrepreneurship our world would be a much less interesting place.  Think of one product or service you love and “can’t live without”.  A company that was started by an entrepreneur or a team of entrepreneurs provides that product or service.

8.)     I’ve always believed in free market economics.  There is no more effective force than competition to bring the highest and best products and services to the market, at a price the market is willing to pay.  The entrepreneur has to navigate that complex landscape.  That’s a great challenge and one that I enjoy.

9.)     As an entrepreneur, especially as one who has achieved some success, you have a tremendous opportunity to contribute to society and have a positive impact on a large number of people.

10.)   Life as an entrepreneur is hardly ever boring.  This is especially true if you are competing in a dynamic market, where the competition is constantly adapting to new customer demands.  Such an environment tends to bring a great deal of challenge and potential reward (financial and beyond), both of which appeal to me greatly.

If anyone ever promised you a rose garden as an entrepreneur, I hope you didn’t believe them.  But if you did, by now you’ve undoubtedly realized that their promise was unrealistic.  Hopefully you’ve also found that, despite the many challenges entrepreneurship brings, or perhaps because of them, being an entrepreneur is a great way to make a living and a meaningful contribution to society.  If not, I hope you are able to hang in there until you find a venture that brings you the satisfaction that entrepreneurship has brought me in my career.

I look forward to your thoughts!  Please leave a comment (“response”) below or in the upper right corner of this post.

Paul Morin

paul@companyfounder.com

www.companyfounder.com

Don’t miss an issue of Company Founder! Subscribe today.  It’s free.  It’s private.  It’s practical information for entrepreneurs and leaders interested in taking it to the next level.

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May 022012
 
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share the credit

We, Not Me, Will Take You A Lot Further.  Share The Credit.

In the realm of entrepreneurship, as in most endeavors that require a team effort to undertake successfully, a focus on “we,” not “me” will take you much further.  Share the credit.  Share the limelight.

Recently I was reminded of an entrepreneur with whom I used to work, who found it very difficult to use the words “we” and “us” and “our”.  His preferred vocabulary included “I,” “me,” and “my”.  I suppose that would have been OK, but for the fact that he needed the input, cooperation and collective effort of at least ten team members to successfully complete a project (a Merger/Acquisition transaction in this case).  This created a couple of key problems.

First, given that the M&A transactions were quite complex and often involved tens of millions of dollars, many of the team members wanted to be recognized for their contributions and sacrifices (20-hour days at crunch time on a deal) in getting a deal done.  The more the entrepreneur threw around the word “I” and effectively took credit for all that went well, the more certain team members became frustrated and demoralized.  Since deals often lasted several months, even a year or more, as morale slid, mistakes and undermining behavior became more frequent and jeopardized the successful completion of many deals.

Second, and perhaps more important, the more the entrepreneur threw around the word “I,” the smaller he made his company seem in the eyes of current and prospective clients.  It made it sound like the company was just him and his efforts, rather than the collective effort of a well-managed team with an effective leader.  Since the company was often competing against bigger, better-known rivals to win deals, this had the potential to become a major issue in sales and marketing efforts.

In short, this entrepreneur’s desire to take credit for everything and receive personal recognition, rather than allowing his team to feel like an integral and important part of the company’s success, threatened to undermine the organization’s talent base, deal performance, and credibility in the marketplace.

I spent about eighteen months attempting to convince the entrepreneur that it would make sense to give credit to the team, rather than trying to continuously keep himself individually in the spotlight.  When he’d send me documents to review that were loaded with “I,” I’d send him back a message along the lines of “change I to we and my to our”.  When I’d hear him being self-congratulatory in meetings and sales calls, afterwards I’d gently (and sometimes not-so-gently) remind him that he needed to change his vocabulary and use the word “we” more.  I’d emphasize to him that the only way for the company to grow was to build a strong, capable, motivated team.  I’d tell him to share the credit and that there was no way to do it all individually, nor was there much rationale for pretending that was how it was happening.

I’d like to tell you that the story has a happy ending, but in fact, it did not end well.  The entrepreneur had a hard time taking advice and continued to focus on himself and tout how great he was, rather than building up the people and the organization around him.  He had an inability to understand how others perceived his words and actions, and a lack of desire to make much progress on improving in this area.  His case was a bit extreme, almost to the point of being in sociopath territory.

Eventually, this entrepreneur ended up alienating everyone around him who could help him, including clients, prospects, employees, business associates, family members, and finally, me.  I may have been the most “long-suffering” of the lot, as I looked at helping him improve as a personal challenge, but at the end of the day, he was not capable of changing and ended up with his business and the rest of his life in shambles.  It’s been several years and he has not yet bounced back from this experience.  Meanwhile, the team that was around him at that time has bounced back nicely.  They did not suffer from the same “I-centered” personality flaw.

This is a cautionary tale.  If you think you have some of the tendencies highlighted in this article, be careful.  Be honest with yourself.  Seek counsel from credible sources.  Be willing to change, before you suffer a similar fate to that of the entrepreneur in this article.  Share the credit for all that goes well in your business.

I look forward to your thoughts.  Please leave a comment (“response”) below or in the upper right corner of this post.

Paul Morin

paul@companyfounder.com

www.companyfounder.com

Don’t miss an issue of Company Founder! Subscribe today.  It’s free.  It’s private.  It’s practical information for entrepreneurs and leaders interested in taking it to the next level.

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Oct 132011
 
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Entrepreneurship can be lonely

Being An Entrepreneur Can Be Lonely

As much as I love being an entrepreneur, it can be a lonely endeavor.  My time as an entrepreneur, since I was a young kid, and my time working with entrepreneurs over the course of my career, have taught me that being the one in charge can make you feel very alone.  Sometimes it feels like you’re on an island.  Whether you’re an entrepreneur in a one-person company or a CEO in a larger company, if you are the final decision maker, it’s easy to feel like it’s you against the world.

Well, there’s good news and there’s bad news on this.  First, the bad news:  it’s not likely to change.  If you’re the person upon whose shoulders rests final decision making authority, it’s virtually impossible not to feel sometimes like all the pressure is on you and you’re on “an island”.  Now, the good news:  there are tons of other entrepreneurs and CEO types out there who feel exactly the same way!  So, while it’s often unavoidable that you will feel alone in your role at your own company, there are plenty of other people who are in exactly the same boat.  That’s good news, because if you can find ways to link up with them, you can share your war stories, feel less alone, and learn from and support one another!

Let’s talk about some ways of linking up with other entrepreneurs and CEO types.  Here’s a quick list.  It’s not meant to be all-inclusive, but I hope it will give you some ideas.  The options range from free and not time-intensive, to relatively costly and much more time-consuming.  The options typically are not mutually-exclusive, so select whichever ones you like and give them a try.  Depending on a variety of factors, including your personality, your schedule and your objectives, certain options will be more appealing to you than others.

Here are some ways to link up with and interact with other entrepreneurs and CEOs, locally and online:

Social Media

  • Twitter:  Search on hashtags, such as #smallbiz #startup #entrepreneur #sme #ceo and others that are relevant to the persons with whom you’d like to interact.  Send out your own tweets and others will react to you as well.  Also, look for tweet “chats” that occur periodically on particular subjects.  It’s true that Twitter is only 140 characters and you can’t say much in a tweet, but you can include a URL link and you can use the brief Twitter interaction as a bridge to further communication via phone, email or other media.
  • Facebook:  I used to view Facebook as a huge “time sink” and to a certain extent, I still do.  It has an enormous number of users though, and thus, cannot be ignored.  Also, with the advent of Pages and with the exceptional utility of Groups, it can be a great tool.  Just be sure to stay focused on your objectives, in this case, interacting with other entrepreneurs and CEOs and don’t get sucked into a lot of the “shiny object,” time wasting activities that such a platform also offers.
  • LinkedIn:  This is the social network that tends to have a very high percentage of business people and professionals.  Like the others, it also has groups, so it can be a great place to interact with other entrepreneurs and CEOs.  It can also be extremely useful for finding and maintaining contact with former colleagues and acquaintances, which represents another way to combat the loneliness of entrepreneurship.
  • Other networks:  There are a ton of other social networks and platforms!  I try to stick to a short list though, because otherwise you could end up spending far too much time on these sites and activities.  I encourage you to explore others, then pick a few that give you the most bang for your buck, and for your time.

Local Networking Groups

  • This is an area where, again, you could end up spending way too much time, without a huge amount of benefit.  There’s the Chamber of Commerce, Rotary, and dozens more.  The best idea here is to experiment with a few groups, but don’t commit to any until you understand what the investment of time and other resources is, weighed against the benefits you are receiving.  In this article, we are talking about trying to overcome the loneliness of being an entrepreneur or CEO.  Sometimes these groups can help with that, but many times they don’t attract the caliber of people you’re looking for; it really depends on the particular group and its composition in your location.  If you don’t find a local group that serves your needs, then start one!  Find other entrepreneurs and CEOs of a caliber that matches what you’re looking for, and get together with them on a regular basis to exchange war stories and lessons.  It doesn’t have to be formal.  Remember, you’re not looking for rewards or recognition from such a group; you’re looking for people who can understand the unique issues and situation you face, who can interact with you and offer advice, in a symbiotic relationship.

Mastermind Groups

  • “Mastermind” groups are typically informal alliances among entrepreneurs with similar interests, often in the same or similar industries.  In reality, such groups have been around for a long time, but only recently has the name “mastermind” caught on.  Their purpose tends to be similar to that of the formal peer groups you will read about in the next section.  The idea is to get a bunch of very capable entrepreneurs together regularly, usually by phone in the case of masterminds, and work through current and reoccurring issues that confront the group members.  It boils down to peer support and is often slanted a bit more toward the technical side of your particular industry, but in reality, over time relationships build and as bonds and shared experiences grow, it helps to combat entrepreneur and CEO loneliness issues as well.

Formal Peer Groups

  • There are CEO groups out there, such as Vistage (http://www.vistage.com), which for a fee will connect you with other CEOs in similar circumstances, so you can have formal interactions to support one another and share ideas on solving specific problems.  Such organizations are not inexpensive, however they can be excellent tools for getting you the answers you need, from credible sources, in a very efficient manner.  The formal interactions of Vistage members usual take place in-person and thus are typically relatively local in nature, but they have recently launched a new service called Vistage Connect (http://www.vistageconnect.com), which has more of an online interaction focus.  My understanding is that the service is less costly and also offers the opportunity to interact with other entrepreneurs and CEOs from around the world, not just those in your geography.

So there you have a few options for seeking out other entrepreneurs and CEOs with whom you can interact in an effort to not feel as lonely, particularly when you’re faced with tough decisions that you do not feel like you can share with others at your company.  This way, you still may feel like you’re on an island at times, but at least now there will be other entrepreneurs and CEOs there with you!

I look forward to your thoughts and questions.  Please leave a comment (“response”) below or in the upper right corner of this post.

Paul Morin

paul@companyfounder.com

www.companyfounder.com

 

Don’t miss an issue of Company Founder! Subscribe today.  It’s free.  It’s private.  It’s practical information for entrepreneurs and leaders interested in taking it to the next level.

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Sep 292011
 
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entrepreneurship - science or art?

Is Entrepreneurship Art Or Science?

I have heard and participated in this debate for as long I’ve been involved in entrepreneurship.  I have friends and colleagues who will argue until they’re “blue in the face” that entrepreneurship is either art or science.  In an effort to answer this question, if you observe entrepreneurs and particularly those who have been successful, you quickly realize that there is no “right” answer.  Sometimes entrepreneurship looks more like art, sometimes more like science, and sometimes, it looks like an equal mix of the two.

Before going further, let’s define “art” and “science,” so that we’re all on the same page.  In the online Merriam-Webster dictionary (www.merriam-webster.com), there are several definitions of both “art” and “science”.  I have chosen one definition for each – see below – so we can look at them more closely in the context of entrepreneurship.  Note:  I also included the definition of “scientific method” to make the “science” definition clearer.

Art:  The conscious use of skill and creative imagination especially in the production of aesthetic objects.

Science:  Knowledge or a system of knowledge covering general truths or the operation of general laws especially as obtained and tested through scientific method.

Scientific Method:  Principles and procedures for the systematic pursuit of knowledge involving the recognition and formulation of a problem, the collection of data through observation and experiment, and the formulation and testing of hypotheses.

So which of these sounds more like entrepreneurship to you?  If you’re more of an engineer or “scientific type,” you’ll probably lean toward science and the scientific method.  If you’re more of an artist (or “poet”), you’ll probably lean more toward the art definition.  One talks more about imagination and creativity, the other more about data and “hypothesis testing”.

In reality though, regardless of which side of the spectrum you gravitate toward, if you’ve had much experience with entrepreneurship, you’ll realize that most businesses are part art and part science.  How much of each is involved typically has a lot to do with the type of business and the particular entrepreneur or entrepreneurial team involved.  It also is often correlated with the stage of the venture.

In early stage ventures, there often is not a lot of “hard data” available, thus there tends to be a lot more “art” and intuition needed to keep the business moving forward in a positive manner.  This reality brings us back to the saying that venture capitalists and other early stage “risk capital” investors would almost always rather put their money into “an A team with a B idea” than “a B team with an A idea”.  Why is that?  Because at the early stage of any venture, there’s not much certainty about the correct direction to take and a more intuitive or “artful” management team is needed to navigate through dangerous waters.

This is not to say that those “intuitive” and “artful” entrepreneurs will not be using the “scientific method,” nor is it saying that they’re lacking strong left-brain, analytical capabilities.  To the contrary, such “A team” entrepreneurs and managers often have very strong analytical capabilities, and moreover, they usually have a track record of experiences that allow them to naturally mix art and science, frequently without even realizing it.  Such “A” entrepreneurs have usually been through several early stage ventures and have seen the good and bad results of both “artistic” and scientific approaches to various early stage venture issues and scenarios.  The good ones are then able to rely on pattern recognition and apply their previous experience through an “intuitive filter” and lead the venture through challenges and opportunities.

One of my colleagues at Wharton Entrepreneurial Programs used to call it moving from the intuitive to the intentional.  I’m not sure it’s necessarily a “progression” from intuitive to intentional; rather, I think it’s a progression from intuitive (art) or intentional (science), to intuitive and intentional.  No matter how scientific or proactive an entrepreneur would like to become in growing and leading their venture, and no matter in which business lifecycle phase they may find themselves, situations frequently arise where there is no certainty regarding the “correct” answer and intuition must play a key role.

So, in the end, entrepreneurship will always be part art and part science.  What changes, based on the entrepreneur or entrepreneurial team, the particular venture, the lifecycle stage, and so on, is the required balance between art and science.  Make sure that in your entrepreneurial life and ventures, if you tend to be too heavily weighted toward the artistic or the scientific, you find a way to arrive at a balance that makes sense.  Depending where you are on the spectrum, this may involve bringing in more “professional managers,” who by definition are usually more scientific in their approach, or it may involve bringing in more creative and intuitive types.  Of course, there will never be a perfect balance, but some businesses and management teams are so heavily weighted toward one end of the spectrum, that they are exposing themselves to the risk of being “blindsided,” for lack of orientation and competence toward the other end of the spectrum.  Find a balance; don’t allow yourself or your business to be blindsided.

I look forward to your thoughts and questions.  Please leave a comment (“response”) below or in the upper right corner of this post.

Paul Morin

paul@companyfounder.com

www.companyfounder.com

 

Don’t miss an issue of Company Founder! Subscribe today.  It’s free.  It’s private.  It’s practical information for entrepreneurs and leaders interested in taking it to the next level.

Go to the right-hand navigation bar near the top of the page, enter your email and click subscribe.  We respect your privacy and will not sell your email address.  Note:  once you subscribe, if the confirmation email doesn’t arrive, check your spam filter.  It usually makes it through, but we’ve had a few get caught up in the filter.

 .

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Sep 182011
 
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Can entrepreneurship be taught?

Can Entrepreneurship Be Taught?

A question I get quite frequently is, “Can entrepreneurship be taught”?  It’s a tough question and the answer is highly dependent on how you define “entrepreneurship,” so let’s start there.  If you look in Webster’s dictionary online (http://www.merriam-webster.com), there is no separate definition for entrepreneurship, but here’s the definition you find for entrepreneur:

One who organizes, manages, and assumes the risks of a business or enterprise.

Frankly, I find that definition a bit lacking, as it’s very dry and does not embody any of the spirit or mindset it takes to be an entrepreneur.

If you take a look at first the definition of entrepreneur on thefreedictionary.com it’s similarly unexciting and dry, but a bit further down there is another definition that is more in line with the way I think about entrepreneurship.  That definition is:

The owner or manager of a business enterprise who, by risk and initiative, attempts to make profits.

This one appeals to me a bit more, because entrepreneurship is all about taking initiative, and the motivation for taking that initiative and assuming the related risks, is usually to make profits.

We could wordsmith the definitions of entrepreneur and entrepreneurship all day long, but the definition above should be sufficient to allow us to think more about the question at hand: Can entrepreneurship be taught?

The short preview of my opinion is that I believe certain aspects of running a business can be taught very well; however, the “entrepreneurial mindset” is difficult to teach and correspondingly tough to learn, but for the most part, it is possible.  In order to look at this aspect of the mindset a bit further, let’s review my list of the 5 Key Character Traits To Be Successful As An Entrepreneur.  Though I acknowledge that this is not an exhaustive list, in my opinion, the five key traits are as follows:

1.)  Perseverance

Having been in the entrepreneurship game for more than 30 years now, I have learned that, without a doubt, if you don’t have perseverance, you are highly unlikely to achieve any meaningful level of success as an entrepreneur.  Although you may plan and do your best to predict the future, I haven’t met anyone who can do that with 100% accuracy.  Therefore, there are going to be unforeseen challenges and you will need to persevere in order to overcome them.  The good news is that, like many of the key characteristics of successful entrepreneurs, this one can be learned — you don’t need to be born with it.

2.)  Goal Setting

I’m not sure this is one that I would always have included on this list, but over time, I have learned that the ability to set goals correctly, monitor progress toward those goals, adjust course as necessary, and make sure they are completed regardless of the obstacles you encounter, is critical to the success of most entrepreneurs.  The alternative is to not set goals, but where does that leave you?  As the saying goes, if you don’t know where you’re going, you’ll probably end up somewhere else.  Setting goals and keeping them on your radar on a regular basis can also help to keep you motivated and on track when times are tough.

3.)  Tolerate Uncertainty

One thing most successful entrepreneurs I know do very well is to tolerate uncertainty.  They are comfortable and very often stimulated in situations of uncertainty.  Unlike many other traits, this is one that may be difficult (but still possible) to learn — to some extent, you’re either born with it, or you’re not.  Those of you who have sought certainty and predictability in your careers and elsewhere in your lives may find it very challenging to be in the relatively chaotic world of entrepreneurship, particularly at the early stage of a venture.  In your case, you would be wise to associate yourself with others you know who perhaps have more of a tolerance for those situations, so you can lean on them a bit when the inevitable chaos and uncertainty arrive.  You may also want to take a role in the venture that allows you to deal with some of the tasks that are a bit more routine and predictable.

4.)  A Strong Desire to Succeed

Most of the great entrepreneurs I know have an extremely strong desire to be successful in everything they do.  They are usually quite competitive, sometimes to an annoying degree and sometimes regarding tasks that, at least on the surface, don’t seem very important.  This drive to succeed is what pushes them to be the pioneer, to take the proverbial arrows, while others are content to sit back and fall into a routine.  If you don’t have such a strong desire to succeed, this may be another one that is a bit difficult to learn — but I do think it’s possible.

5.)  Different Definition of Failure

Hardly any entrepreneurs in the history of time have achieved great success without a failure, usually many, many of them.  Sure, a few have done it, but some people have hit the lottery as well.  It happens, but it’s highly unusual.  Much more common among successful entrepreneurs, are stories of repeated failure — sometimes 10, 20 or more failures — then what appears to be a sudden success that came out of nowhere.  The reality is that it did not come out of nowhere; it came from the ability to learn and course-adjust, based on previous approaches that did not work.  As with achievement in most disciplines, mindset is everything as an entrepreneur.  This is best illustrated by a comment made by Thomas Edison, when someone asked him if he had failed on a particular experiment.  His response was to the effect, “no, I just eliminated another way that does not work.”

So, let’s take a look at each of these traits in a bit more depth at it relates to “teachability”.  In the case of perseverance, perhaps the most important trait, let’s say it can be learned but cannot be taught.  A coach or other third party may be able to help you push your way through difficult situations (i.e. persevere), but the drive to do so must come from inside.  Another person can teach you how to set goals correctly.  They can also teach you and encourage you to monitor your progress toward those goals and to course-correct along the way.  A third part cannot teach you to have a personality or mindset that tolerates uncertainty well, at least not easily.  Your risk and uncertainty tolerance is something you’ve developed over a lifetime, so it’s not easy to change.  It’s possible, but only with concerted effort and incremental progress, mainly on your part.  A coach or mentor can encourage you in this process, but the desire to change will need to come from within.  If you are to develop a strong desire to succeed, that too will have to come from within.  Again, outside parties can encourage you, however, the desire will have to come from you, and it will likely be based on how important your goals are to you.  You need to set goals that really get you “fired up”.  You can redefine your definition of failure and this is something that can be taught.  It may take some time, but it is vital to your success as an entrepreneur.  If you are going to look at every small bump in the road as a failure and allow it to cause you to get off track, rather than learning from it and moving on, entrepreneurship is going to be a very tough road for you.

In summary, in my opinion, many aspects of entrepreneurship, include some parts of the “entrepreneurial mindset” can be taught and learned.  For all aspects though, the desire to learn and continue becoming a better and more successful entrepreneur will need to come from within.  You will need the drive to succeed that leads to the willpower to overcome obstacles and “make it happen”.  If you don’t have, or can’t muster this drive and willpower, no amount of teaching or learning is likely to allow you to become a successful entrepreneur.

I look forward to your thoughts and questions.  Please leave a comment (“response”) below or in the upper right corner of this post.

Paul Morin

paul@companyfounder.com

www.companyfounder.com

 

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Sep 172011
 
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Struggling small business? Don't give up!

Struggling In Your Small Business? Don’t Give Up!

If you are struggling in your small business, take heart; you are not alone and you should not give up.  The potential reasons for your struggles, some of which we’ll discuss below, most likely have both a “macro” and “micro” foundation.  As long as you’re willing to be honest with yourself, there’s a good chance you can course-adjust and get your business back on track.  If not, you should at least be able to make a rational decision of “where to go from here”.

The first step in determining what you should do if your business is struggling is to assess whether you have a “good business” to begin with!  Whether you’re running a business that’s been around for seventy-five years or one that’s been around for a month, it’s important to take an honest look at what you have.  It’s sad to say, but some businesses shouldn’t have been started in the first place, and some businesses that were great at the beginning, have been passed by due to “human progress” (“buggy whips” come to mind) or poor management, or both.

Let’s focus on the case of a relatively mature small business that has run into hard times.  If instead you are looking more for a discussion of the characteristics you’ll want to consider in screening a startup, see Startup Basics – The Difference Between Ideas and Opportunities.

First, I want to make the point that I’m a huge fan of the entrepreneur (and any kind of achiever) who has the “never-say-die” mentality.  I applaud it.  I try to emulate it as much as possible.  I believe it is what leads to more progress in our world than almost any other single trait.  All that said, it’s important to be “realistic” too.  I am not saying to lose your never-say-die attitude.  Rather, I am saying assess the situation rationally, do what needs to be done, then channel your enormous willpower and energy in a direction that’s not tantamount to “rearranging deck chairs on the titanic”.

What are the questions you should ask yourself to determine whether your small business has “hit an iceberg” and become the equivalent of the Titanic?  Here are a few thoughts.  This is not an exhaustive list, but it should get your mind moving in the right direction.

Struggling Small Business Honest Self-Assessment Question #1

Has the industry taken a completely new direction, in which we are not prepared or equipped to go?

Take as an example the corner video rental store a few years ago.  Everyone could see the writing on the wall regarding the stiff competition from pay-per-view cable and Netflix, among other movie sources.  If you had owned a chain of video rental stores at that point, what would you have done?

Struggling Small Business Honest Self-Assessment Question #2

Have our margins been squeezed to the point that it’s impossible to make money on the bottom line?

In many industries, there is a tendency toward “commoditization,” which has very negative effects on gross margins, due to severe competition on price, without a commensurate reduction in costs of production.  A good example here would be most segments of the computer hardware manufacturing business.  The prices have come down far faster than the costs of production.  It’s now to the point where you need to be a very large player, doing a huge amount of volume, to have any hopes of making money in that business.  This is where commoditized industries end up.

Struggling Small Business Honest Self-Assessment Question #3

Do we have the right leadership team in place to grow our business?

I have seen this issue in non-family and family businesses alike, but it seems to be more prevalent in family owned companies.  What happens quite frequently is that someone has been with the company a long time, so they’re awarded a senior position, without any real assessment of whether they are the person who will be able to handle those responsibilities as the company grows.  It happens in sales, in marketing, in finance, in operations, even at the CEO and Board level.  The business simply outgrows some people.  It’s inevitable and it’s a difficult situation, but it must be dealt with, or the entire business is put in danger.  It is better to deal with the uncomfortable situation of having to demote or fire someone who cannot “make it happen” than it is to ignore the problem and bring the whole company down in the process.  I understand and fully agree with rewarding loyalty, but not to the detriment of the company, all its other employees, its shareholders, and other constituencies.  If your company and/or industry has outgrown you or other key members of your senior management team, acknowledge it and fix it as soon as possible.

Struggling Small Business Honest Self-Assessment Question #4

Should we be looking at a different part of the “value chain”?

Quite a few years back, I read a book by a couple of BCG (Boston Consulting Group) guys called Blown To Bits.  I don’t recall the exact terminology they used, but one important concept from the book has stuck with me.  They talked about how mature players will have to constantly defend attacks from insurgents who want to come in and “cherry pick” the most profitable pieces of the value chain.  Where are you in the “value chain” that brings value to your customers and solves their problem(s)?  Industries that have many layers of intermediaries en route from production to putting the products in the hands of consumers, these days are frequently seeing entire layers cut out of the chain.  This happens due to the ability of the manufacturer to go directly to the consumer.  Don’t become “disintermediated” (a term used in Blown to Bits, if I recall correctly)!  If you are in one of the layers that is not adding much value, you are in great danger of being cut out.  An example here would be auto insurance.  Geico simply cuts the broker out of the picture.  For other types of insurance, particularly complex business insurance, that’s not quite as easy to do.  Take a close look at your own situation.  Examine the “value chain” all the way from production to the consumer’s hands.  Where is the value being added?  Where is the money being made?  Where are you?

Struggling Small Business Honest Self-Assessment Question #5

If you conclude the future isn’t bright, you’ll need to answer the question: What should we do then?

If you ask yourself some of these questions and don’t like the answers you’re hearing, you will need to decide what to do.  There are typically several choices, including:  close the business, downsize the business, sell the business, change the market focus, upgrade the manufacturing capabilities, upgrade the senior management, etc.  In other words, there are a lot of possibilities and many of them are not mutually exclusive.  For example, upgrading the senior management and changing the market focus or overall strategic direction, would often be logical complements.  The key is that you must do something.  The worst thing you can do is nothing and just continue along a path that you know does not end well.  The other key is to be honest in your assessment.  If your business is struggling, there are reasons for it. It doesn’t just happen.  Most likely some of those reasons are related to macroeconomic issues and others are related to micro issues within the business itself.  In any case, you must take action to address the issues that you have control over.  For the remainder, you will need to do your best to be proactive and navigate around the “storms” in your immediate vicinity and those you see on the horizon.

I look forward to your thoughts and questions.

Paul Morin

paul@companyfounder.com

www.companyfounder.com

 

Don’t miss an issue of Company Founder! Subscribe today.  It’s free.  It’s private.  It’s practical information for entrepreneurs and leaders interested in taking it to the next level.

Go to the right-hand navigation bar near the top of the page, enter your email and click subscribe.  We respect your privacy and will not sell your email address.  Note:  once you subscribe, if the confirmation email doesn’t arrive, check your spam filter.  It usually makes it through, but we’ve had a few get caught up in the filter..

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Aug 242011
 
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Are Entrepreneurs Gamblers?

I often get asked the question, “Are entrepreneurs gamblers”?  I think how you answer this question has everything to do with how you define “entrepreneur” and how you define “gambler,” so let’s start there.

For me, an entrepreneur is someone who starts a business with the intention of growing it, in order to make a profit.  Further, an entrepreneur takes pleasure in creating something that previously didn’t exist and growing it into something that “matters”.  Clearly, it is possible to be “entrepreneurial” in non-profit organizations and in for-profit organizations that already existed before you showed up – there are various types of entrepreneurship.  The simplest definition of an entrepreneur is “someone who looks for business opportunities and invests time, money and/or other resources to take advantage of those opportunities”.  You most often hear the word “entrepreneur” used in the case of startup businesses, but that is not the only scenario where the term is applicable.

Now, a “gambler,” for me, is someone who places bets, hoping to win by chance, usually against the odds.  There are various types of gambling, not all of which happen in a casino, but even within a casino, there are many different forms of gambling.  If we look at a casino as the place we most often find “true gamblers,” we quickly realize that, usually at least, when they’re playing against the house (the casino), in such games as blackjack, craps, roulette, etc, they have to get quite lucky to win on any particular occasion.  Further, if instead we look not at a specific occasion, but over a period of time and several occasions, unless they are cheating or exploiting some other advantage that is against casino rules, their probability of winning is almost zero.  The games were created that way, by the casinos.  No wonder the odds are stacked in favor of the house.

Ok, so back to the question:  Are entrepreneurs gamblers?  Based on the definitions I laid out above, I think you’d have to say, no, entrepreneurs are not gamblers.  Entrepreneurs may count on luck just as gamblers do, but I don’t think we can say that over time entrepreneurs’ probability of succeeding is almost zero, as it is for gamblers as defined above.

So if entrepreneurs are not gamblers, what are they?  They are risk takers.  To be more specific, good entrepreneurs are calculated risk takers.  They see an opportunity and like gamblers, they place a bet.  They bet their capital, their time, and other resources that they will be able to exploit the identified opportunity and create a successful business based on it.  They do depend on luck to some extent, but if they are experienced and/or have good partners and advisors, they know how to “stack the deck” in their favor, so that they don’t have to depend on luck so much.  I guess if you wanted to compare them to gamblers, you could compare them to those gamblers I mentioned above who use “card counting” or other techniques that go against the house rules.  They do not enter the game, or in the case of entrepreneurs, the venture, without some advantage or set of advantages that they, and their investors if they have any, believe will allow them to succeed in that particular business.

Frankly, I don’t really like hearing entrepreneurs compared to gamblers, at least not given the definitions I provided above.  I don’t think such a comparison does the entrepreneur, at least not the “good” entrepreneur, justice, as it has too many connotations of “shooting from the hip” and just hoping to get lucky.

As one of my close entrepreneur friends says, “without risk, there is no reward”.  It is inevitable that anyone who dares to initiate anything, including a new business venture, is taking a risk.  They are “risk-takers,” by definition.  They’re not “gamblers” though, at least not per my definition of the word.

If you are just starting on the entrepreneurial path, or even if you’ve been on it for a while, make sure you’re a “good” entrepreneur – a calculated risk taker, not a gambler.

P.S. You may have seen me compare entrepreneurship to a poker tournament elsewhere.  This is because poker is not a game you play against the house.  It is played against other players.  It is still a form of gambling, but not the type of gambling I referenced above.  While it absolutely does involve some luck, it also involves strategy and allows you to be more of a “calculated risk taker” than games against the house.

I look forward to your thoughts and comments.  Please leave a comment below or in the top right corner of this post.

Paul Morin

paul@companyfounder.com

www.companyfounder.com.

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Jun 222011
 
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How To Set Goals So You Will Achieve Them

Assuming you agree that setting goals is a worthwhile step, it is key to understand how to set them in a way that will increase the likelihood that you achieve them. The best and simplest model I have seen and used for setting goals effectively is the S.M.A.R.T. approach, which encourages you to set goals with the following characteristics:

[S]pecific: The goals you set for yourself should be as specific as possible. So, for example, you wouldn’t say “I want to have a profitable business”. Instead, you’d say I want to have a business that generates $2 million in sales and 25% EBITDA by year-end 2013. If you are setting a goal for yourself in the area of marathoning, you wouldn’t say “I want to run a fast marathon”. Rather, you would say, “I want to run a 3:10 marathon, with a 1:30 half split, by November 2012”.

[M]easurable: The goals you set should be measurable. That is, they should have a numeric or quantitative element that is measurable, rather than just be qualitative. If you cannot come up with a numeric element, you should at least come up with something that a third-party, objective observer could look at and relatively easily say whether you have or have not achieved that goal. For example, in business, it may be hard to specifically measure “empathy,” a desirable characteristic particularly for sales people, however if you’re working with a coach or mentor, they may be able to observe whether your demonstration of empathy toward prospective and current clients has improved over time. In sports, it may be hard to measure “awareness” of overall scenarios during a game; however, you may be able to come up with a proxy statistic that gives you a sense of the improvement in your awareness. Such a statistic in hockey or basketball, for example, may be assists. Where possible though, you will want to make as many of your goals as possible directly measurable. Examples in sports would be x number of assists, goals, wins, runs, etc. Examples in business would be sales, new accounts opened, net income percentage, etc. Chances are that in your endeavor, whatever it may be, you have a good sense of the metrics that you should be measuring and striving for.

[A]ttainable: It is important that the goals that you set for yourself are “attainable” or that you at least believe strongly that you can attain them and can put a plan in place to do so. If you are simply throwing down huge, unreasonable goals with unreasonable timeframes, you are setting yourself up for failure. I’m a huge fan of “stretch” goals and I strongly believe that you should challenge yourself as much as possible. That said, it is important that you set incremental goals along the way, so that you can see a clear path to your ultimate objective(s) and so that you can experience some successes along the way. If you structure your goals in such a way that you cannot experience success until the very end, you run a great risk that you will lose interest and/or belief in the process. So, in sum, challenge yourself with your goals, as that is the only way to achieve greatness, however, you should do so in such a way that you are able to experience incremental successes along the way.

[R]elevant: Often times I’ve seen the “R” of the S.M.A.R.T. acronym for goal setting used to represent “realistic,” but as far as I’m concerned, that is too similar to “attainable”. For this reason, I prefer to use “R” to represent “relevant”. Given that if you are focused on becoming great at your endeavor, you are undoubtedly a very busy person, it’s important that your goal setting be not just effective, but also efficient. It does not make sense to pursue goals that are not relevant to obtaining your ultimate objective of greatness. This idea relates closely to the concept I covered elsewhere of “taking out the trash,” or doing those things that you may not necessarily love doing, but you know need to be done. For example, in the context of goal-setting, it does not make sense to note goals for concepts or activities you have already mastered, even though it may feel good and be squarely in your comfort zone to do so. Rather, you should focus your efforts and your goal-setting on mastering those things you need to work on to accelerate your journey toward greatness in your chosen endeavor(s). There are exceptions, of course. For example, in tennis, if getting your first serve in is absolutely critical to success, there’s no harming in noting a first service percentage goal, even if you are already a great server. The point is, don’t do so to the detriment or exclusion of, for example, setting lateral and forward quickness goals, even if those may be areas that you don’t enjoy quite as much.

[T]ime-sensitive: Make sure that ALL the goals you set have a deadline or target date associated with them. This is of critical importance. A deadline usually forces us to become more focused. It ignites our competitive spirit and usually makes us achieve more, more quickly. Without a deadline or target date, a goal is more like a wish and it is far less likely to be accomplished. On the subject of time, it is also important to bear in mind that you should set short-, medium- and long-term goals for yourself. There are a couple of major reasons for this. First, as mentioned above, if you have some short- and medium-term incremental goals, this is more likely to permit you to enjoy some successes along the way to your ultimate goals. This should help with your self-confidence. Second, having incremental goals along the way is more likely to allow you to “course correct” on the path to achieving your ultimate goal(s). If you simply have one long-term goal out on the horizon, it makes it a lot more difficult to know if you are on the right track and make sensible adjustments if you are not.

It is important to set goals for yourself in all areas of your life. In particular, it is important to do so in the area(s) where you are trying to achieve “greatness”. It allows you to enjoy incremental victories en route and it also makes it easier to determine whether you’re on the right path and make course corrections as necessary. Make sure that as you develop your goals, you do so in a S.M.A.R.T. way.

I look forward to your thoughts, comments and questions.

Paul Morin
paul@CompanyFounder.com
www.CompanyFounder.com.

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