Starting a new business is exhilarating and frightening all at the same time. There is a lot of fear of the unknown. The brain is churning with questions. “Will I be successful, screw up, go bankrupt? Am I doing the right thing? I really, really want to start this business, but I don’t know how.” These fears hold back 95% of potential business owners from ever getting started.
It is not surprising that only 5% of the people in the world are successful at starting a new business.
Why Do People Start Businesses?
Most new businesses are started for one of three reasons:
1. Need to make money, can’t get a job, or because they want to. (Newbie)
2. Have a passion for an industry and perceive they can do it better (Sole Proprietor)
3. Entrepreneurial. The individual starting the business has other businesses and passions and wants to create a new business. Entrepreneurs create businesses because they can.
Road Blocks to a New Business:
On Your Own:
A newbie just starting out has all sorts of challenges to deal with. The biggest being their own fear and a lack of clarity as to why they want to have a business. “It was a good idea at the time” is a costly reason. Tens of thousands of dollars have been wasted because the person looking for a business did not understand why they wanted a business.
If you are a newbie, and have not spent your fortune yet, I would encourage you to sit down and figure out why you want to be a business owner versus having a job.
Your why could be freedom to be with your family, make money for vacations, college for the kids, have a new home, help your parents, or to pay down your credit card debt. I started a business to pay down my credit card debt.
I learned that success takes consistency, focus, determination and the ability to take a lot of flak from all sources.
You will find that you have:
* Little or no support from family and friends, (they say you are crazy)
* No financial resources, (The banks infer that you are crazy) (it is extremely difficult to have a business without the capital to advertise, and obtain the resources that are needed to get a business going),
* No business background, make poor choices of for their new business, (like an ice cream franchise in rural Alaska, or a web-based business and they do not own a computer),
* No system or records for running the business (envelopes full of receipts do not count as a system nor do they enhance finding new customers), and
* No marketing experience (if you don’t know anything about marketing and sales, your business is not open until you do)
* Oh, and one last reason, the biggest of all “THE FEAR of SELLING”. That is the number one fear that kills new businesses every time. (I can attest to that one. That fear hammered me on three businesses.)
The person seeking a new business will increase their chances of success if they find a business complete with business systems, mentors, a master mind group and leadership training as well as systems for doing the advertising and sales.
The best way to prepare to be a business owner is to buy a business that has all of the systems and training required to be successful. The experience prepares one for owning other businesses and being financially free.
The sole proprietor will probably burn out after seven years because the business has been built around his/her expertise and they are not willing to let go of the day to day operations. Remember, they started the business because they thought they could do it better.
* They usually have the support of family and friends. (But, secretly they think that person is crazy when he/she could have a cushy job)
* They usually have the financial resources or the ability to obtain them.
* They have business experience at a management level, but usually have not had any formal training in running a business. (The biggest challenge is the finance end of the business. Most sole proprietors do not have any accounting experience except with their check book and that is usually not a pretty sight)
* The Sole Proprietor has a system for running the business. It is their system, but it works (for them). It makes it very difficult to bring on additional employees because the system is designed for one person.
* They usually have no marketing experience, unless that was the field they were in, and have to scramble to learn the concepts and apply them quickly (No marketing, no customers), and
* Of course they have to be able to sell. They usually have clientele when they start, but have to find new clients and sell to them if they are to grow and prosper.
* Their work week is now 24/7. The money may be good, but the quality of life sucks.
* The government takes more taxes from sole proprietors.
The biggest risk of being a sole proprietor is if you are not working there is no income.
A sole proprietor will increase his/her chances of building a strong business that can be run by others if they find a group of like-minded business owners that can commiserate and provide possible solutions to problems that are faced by being sole proprietors.
The knowledge of a group is far stronger than one. Frustrations can be relieved by learning a different way of approaching a problem from your group.
Entrepreneur – Has a Team
The entrepreneur is successful because he/she has a team, has been in business previously or has a mentor in that business. Their teams are chosen for their strengths. The team as a whole makes one living organization – the business.
Successful entrepreneurs have passion for their business and the drive to see it grow. They have mentors and a group of like-minded business owners to share their stories with and learn from. This is the critical piece to their success.
Their master mind group keeps them current with new developments and opportunities and serves as a sounding board for new ideas. The advantage of a group like this is that an idea may sound great to you, but someone else may know of a reason why it is a bad idea and they are not afraid to tell you. It is called business networking which is the equivalent of social networking
Whether you are a starting a business, have a new business, or are creating another one, the answer to having a successful experience is to find a master mind group, a group of individuals that are sole proprietors, a mentor, or if you are lucky a business with all of the above.
Good luck with your entrepreneurial experience. It is worth it to have the freedom to do what you want when you want and be with your family and friends. Oh, and wake up at the crack of noon, should you choose.