Entrepreneurship is not for the faint of heart. Do you have what it takes to own your own business? Below are 5 critical success factors every entrepreneur should have to successfully run their own business.
Sacrifice – Are you willing to sacrifice short term to benefit in the long term?
Don’t be fooled into thinking that owning your own business means flexibility and a lot of free time. Most business owners, when they are starting out, put in long hours, including nights and weekends. However, statistics have shown that business ownership is a proven way of building wealth and long-term prosperity. The wealthiest households’ primary wealth is derived from owning businesses and/or shares in businesses (Edward Wolfe, New York University, WSJ.com) and in the book Rich Dad Poor Dad Robert Kiyosaki introduces the concept of the cash flow quadrant. He looks at four different entities: the employee, the self-employed, the business owner, and the investor. The business owner is the boss, utilizing other people’s time, knowledge and drive to make money for you.
Experience – Do you have some business or related experience?
Do you have a business degree or have you worked in an industry that you are interested in starting a business in? Having some related business experience will help you, not only with lenders who will require some type of industry experience, but also with a basic understanding of how a business should operate. In particular, understanding financial statements, employee relations, customer service, sales, marketing, etc. which will help you be a savvy business owner that is able to make decisions based upon fact and not just a “gut feel”.
Leadership – Do you like being the leader?
Successful entrepreneurs prefer leadership roles. If you are not comfortable being in charge, making decisions, and dealing effectively with all types of different people, business ownership may not be right for you. Being your own boss, means you are also the chief cook and bottle washer, and with that title comes the responsibility for ensuring that the decisions being made will not negatively impact your family, employees, financier, and vendors. This can be a lonely spot on the totem pole and sometimes gives business owners many sleepless nights.
Organization – Are you organized?
As mentioned previously, owning your own business means you have to wear many different hats, and balancing all the different tasks takes a degree of organizational skills. Can you prioritize tasks? Can you move effectively and efficiently from one responsibility to another? If a business’s systems are not properly organized, paperwork gets lost, tasks pile up, and valuable time is spent “firefighting” instead of effectively using your time to operate your business and move towards your goals. As a business owner, your time will be one of your most precious resource, and not being organized can eat into that resource.
Optimism – Are you optimistic?
Entrepreneurs need to be “irrationally” optimistic (Entrprenuer.com). As a business owner you will struggle through many days where everything seems like a failure. If you are not a “glass half-full” type of person, it may be hard to have the strength and courage necessary to run your own business. Sales will fall through, employees will quit at the worst possible time, servers will crash, and the competition will be constantly after your market share. Optimism goes a long way to help entrepreneurs be successful in the long term. Remember, every project looks like a failure in the middle.
If you encompass the 5 critical success factors, then entrepreneurship may be for you. Even though there are many risks associated with being your own boss, some of it can be abated when you have a game plan to follow. One way to do this is to become a franchise owner of a proven business model. Franchises allow you to realize your dream of entrepreneurship with help of an established business model.
A UGA SBDC business consultant can help you with a business that you start from scratch or with a franchise business. Contact your local UGA Small Business Development Center to schedule a session with a business consultant or attend one of our upcoming training programs. The UGA SBDC offers no-cost, confidential consulting services and low cost educational resources to help you transform your business!
(Laura Katz, Area Director, UGA SBDC)