I have no doubt that the key to success for a small business is the quality of the person running it. Even if you have a great product or service with a good marketing strategy, if you don’t have the motivation, drive, and skills required to run the business, it is likely to fail.
The honest truth is that some people are not cut out to be entrepreneurs. Those people can avoid a lot of wasted effort, heartache, and expense by doing an honest self-evaluation early on. Don’t fool yourself — if self-employment is not for you, the best time to realize it is now, before you begin.
Attributes of a Successful Entrepreneur
You can learn many of the skills necessary to be a successful entrepreneur — for example, if you don’t understand bookkeeping and financial statements, you can learn from books or courses (in fact, I devote Chapter 6 to this subject). The same can be said for other areas such as selling and marketing techniques (discussed in Chapter 4).
There are, however, certain innate qualities that are ingrained in the personalities or present in the lifestyles of successful small-business owners. Before leaping into the world of self-employment, you should conduct an analysis of your own personality, skills, and lifestyle to see if you are likely to succeed on your own.
Let’s look at some of the main qualities that successful entrepreneurs tend to possess. You don’t have to have them all, but your chances of success increase every time you say “That sounds like me” to the following descriptions:
• Successful entrepreneurs love what they do. Because they are doing work they enjoy, it doesn’t seem like a job or a chore to them. This is what keeps them going during the tough times, when they have to work late nights and meet tight deadlines.
• They are not daunted by hard work. It is not easy to research, start, and run a small business. Making the dream a reality takes a lot of time and effort. Entrepreneurs are not afraid to work hard.
• They are inquisitive and interested. They are always reading and talking to other people about their interests and experiences, and they like to keep up with current trends and events. This is how they increase their personal contacts and discover “what’s next” for their businesses.
• They like to deal with people. It doesn’t matter whether the business produces goods or services, entrepreneurs need to deal with a broad range of people on a daily basis — from customers to suppliers to business partners and employees. They need to enjoy dealing with people to make things run smoothly.
• They thrive in unstructured situations. They generally don’t like to be told what to do, when to do it, and how to do it. They enjoy the challenge of making all the decisions themselves.
• They have good communication skills. Whether it’s writing business proposals, talking to a bank manager about a loan, or convincing a potential customer that their product is superior, they are able to get the point across effectively.
• They have a supportive family. They have the support of their family and do not ignore the importance of their lives outside the business.
• They can cope with a fluctuating income. These people realize there may be some years when their income is low. They plan ahead for these times so they don’t put the whole business at risk — and they are confident things will get better.
• They have (or can develop) necessary skills and experience. They are not afraid to face their limitations, and they are prepared to acquire the skills they don’t have or to hire people who already have them.
• They recognize the value of good health. Long hours and stressful situations take a lot out of you. These people realize the importance of regular exercise and a healthy diet.
Now that you have thought seriously about your own personal attributes, you have likely discovered you are not perfect. But if you are resolved to work on your weaker areas, you will improve your chances of success as an entrepreneur. The next thing to consider is the attributes your business will require to succeed.
Attributes of a Successful Business
Throughout my years of self-employment, I have seen hundreds of businesses come and go. This has given me an interesting perspective on what basic elements a business needs to succeed. I have concluded that a successful business is like a stool with three legs to keep it stable. They are —
• operations,
• selling and marketing, and
• finance and administration.
In order for a business to succeed in the long run, it needs to be actively engaged in all three functions. Let’s look at each and see why.
Leg 1: Operations
The operations section of a business is the actual work that the business does. For a plumber it’s fixing people’s sinks and tubs. For computer consultants it’s programming clients’ computers or providing technical services. For bookkeepers it’s keeping the books for clients’ businesses. It’s obviously vital that you be able to perform the work of the business. At least, it’s vital until your business grows enough to be able to pay someone else to do the work for you.
Operations is where most people have the least amount of trouble. Unless you decide to start a business that you know nothing about — which is a risky strategy — you probably have the skills you need to do the work of your business.
In Chapter 4, when I talk about how to sell yourself and your business to clients, you’ll see that it’s essential that you be good at what you do. If you are good, word will spread to other customers. If you aren’t, it won’t. In fact, if you don’t provide good services or sell good products to people, bad word-of-mouth will spread, and that will almost certainly kill your business before it begins to walk.
Most people who start a business know already how to do the work of the business — the operations part. They have one leg of the stool. Note that two types of businesses have a major advantage over all others because their operations involve one or the other leg of the stool:
• Bookkeepers and accountants generally have no trouble with finance and administration.
• Advertising executives and consultants usually have sales and marketing skills.
If you are thinking about starting one of these types of businesses, you already possess two-thirds of the skills you’ll need to succeed. If your business is in any other field, you’ve got more work to do.
Leg 2: Selling and marketing
The second leg of the stool is selling and marketing. This is definitely my weak point. I was never taught how to sell or market anything in my life. I think this is one of the greatest flaws in the North American educational system today. No matter what we do, we need to be able to sell to be successful. Why aren’t we taught how?
Everything I know about selling I learned one of three ways:
• By making mistakes myself
• By learning
