The Owner's Manual for Small Business. Rhonda Abrams

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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

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