When considering starting your own company, there are a lot of financial, legal and business questions you need to ask yourself. “How am I going to raise money? Who are my competitors? Are there patents on similar products?” I’m not going to focus on those types of questions here. I’m going to focus on the intangibles.
Here are nine questions that you need to ask yourself about your own capabilities and personality as an aspiring leader.
1How much responsibility can I take on?
You will be responsible for not only yourself and your business but everyone that has a vested interest in it. This includes employees and their families, investors, business partners, clients and the community in which you run your business.
It’s one thing to put your own fortune and reputation on the line; it’s another when you get other people and their livelihoods involved.
I am responsible every day to the BRIC Language Systems team in NYC, China, Brazil and Mexico – as well as every one of our language learners, interns and business partners. Being your own boss sounds nice, but you’ll realise quickly just how much weight your shoulders can hold. Make sure you know you can handle it, for your own sake and theirs.
2What am I willing to sacrifice in order to make this work?
There are tremendous sacrifices involved in starting up a business. Those sacrifices will include sleep, hobbies, exercise, relationships, vacations and your own personal freedom. A lot of these sacrifices are the result of realising who you’re responsible to (see above).
Be ready to sacrifice a lot in order to succeed and ask yourself if those sacrifices are worth the potential reward? More importantly, and more realistically, ask yourself if it would still be worth it if all of that sacrifice results in failure?
I lived in China for eight years. I sacrificed going to best friends weddings, the births of their children, my health, college football Saturdays and so much more. So far, it is well worth it, not only because BRIC is doing well, but even more so because of the experiences and friendships that developed out of my time there. If BRIC blew up tomorrow – which I don’t expect nor want – I can honestly say that it was worth it.
3Can I remain calm amid constant chaos?
Batton down the hatches! You’ll be dealing with a storm of confused emotions and organisational chaos. How you relieve stress is incredibly important. Make sure that you have the mental fortitude to deal with an incredibly stressful environment and that you know how to decompress. Whether it’s exercise, meditation, yoga or whatever else – make sure that you know how to relieve stress.
During my time in Shanghai I took kungfu classes at Longwu Kungfu, tried Taichi, and ran the Bund in the mornings. This helped me get through an otherworldly amount of stress and chaos that only expats living in Shanghai will understand. No matter where you are, stress relief is one sacrifice you can’t afford to make.
4Can I make a decision under pressure?
When you start a company, you will be dealing with issues that you could have never imagined. You’re involved in every decision and every detail. This means everything from legal to hiring, accounting, marketing, sales, IT and design.
You need to be able to calmly, rationally and quickly assess a situation and act. You’ll need to be decisive.
As Brian Tracy says “decisiveness is a characteristic of high-performing men and women. Almost any decision is better than no decision at all”. Be able to make the decision, move on, and deal with the results. We all make bad decisions at some point, I know I’ve made a lot of them in getting BRIC up and running.
5Am I able to back down when I realise I’m wrong?
Leadership is as much about being able to accept when you’re wrong and listening to your team, as it is about being right. No one likes a boss who can’t admit when their wrong. If you’re leading the team in the wrong direction and people are pointing it out to you, as a leader you need to accept that fact and change course.
Being able to listen to your team and heed their advice is a hallmark of a good leader. I’ve been lucky in every leadership situation that I’ve been in to have either had a good team handed down to me or built a good team from the ground up. Those teams are why I’m where I’m at today.
6What are my own weaknesses?
Being self-aware isn’t a prerequisite for being a good leader, but it should be. You need to know how what you think, say and do are perceived by others. This is far different from being self-conscious.
Being self-aware allows you to understand others and effectively motivate, discipline and lead them. It’s recognising not only where you’re strong but also where you’re weak – and using that to build a team that compliments those weaknesses with strength.
Related: Do You Speak Start-up?
7Can I manage a diverse group of people?
You are going to be responsible for putting a team together that will inevitably have different political, social and economic backgrounds. They will have different attitudes, personalities and viewpoints. These differences are to be celebrated, but they will also need to be managed and lead towards a common goal.
Can you, as a leader, bring your team together when they don’t see eye-to-eye and are at each other’s throats? It will happen, you need to be able to help them forward as a team. Sometimes these differences are impossible to overcome and change needs to happen.
8Can I let someone go, including someone close to me?
A lot of startups involve friends. Those friends may come from the neighbourhood, university or a previous job. Sometimes those friendships get in the way of good business judgement. If anyone, including a friend, is dragging down the business despite repeated attempts to motivate them and having given them a fair chance, they need to go. This is part of your responsibility to everyone on the team who is executing, as well as all of the others mentioned in no. 1 above.
I’ve had to let people go in all kinds of circumstances. Some of them were close to me. I’ve had people break down in tears, and I’ve broken down in tears myself, but we were able to have the conversation and get through it. It’s not easy, so ask yourself whether or not you can handle that type of situation?
9What are my reasons for starting this company?
Is it to make money, change the world, disrupt an industry, work for yourself, passion, pride? There are a lot of reasons people start companies. Make sure you know why you’re starting your company and that the reason is sound.
Be realistic if you’re setting out to change the world. Change doesn’t come easy. Make sure that change is wanted or necessary when trying to disrupt an industry.
Be self-motivated if you want to work for yourself, and make sure that passion and pride are both in check.
Once you’ve answered these nine questions, get ready for a whirlwind. You’ll feel extremes of every emotion from exhilaration to sorrow, success to failure, anxiety to serenity, doubt to certainty and anger to pleasure. You’ll feel many of those conflicting emotions at the same time and sometimes for the same reason. It’s a wild ride, and if you’re ready for it take the gloves off and come out swinging for the fences, it’s totally worth it.
Lastly, don’t overthink it. If you ask yourself too many questions, you’ll never get them answered and wind up never starting anything at all.
This article was originally posted here on Entrepreneur.com.
Why Optimism Isn’t Enough – You Need To Also Accept The Brutal Facts
Entrepreneurs tend to depend on optimism in the same way that fish depend on water. It’s absolutely crucial for survival. In fact, it’s arguably the single most important character trait that a successful entrepreneur can have, but it also has a dark side…
A realistic path to success
- Lead with questions, not answers
- Engage in dialogue and debate, not coercion
- Conduct autopsies without blame
- Build red flag mechanisms.
No matter how bad your day’s going, it’s probably nothing compared to your average day at the ‘Hanoi Hilton’. This was the euphemistically-named prisoner-of-war camp (actually called Hoa Lo Prison) where American soldiers were interned during the Vietnam War. Pilot Jim Stockdale was shot down on 9 September 1965 and sent to the prison. While there, he was tortured, denied medical attention, kept in a windowless cell and locked in leg irons at night. Stockdale spent almost eight years in the prison, and while many other American soldiers died there, he survived.
This brings us to the topic of optimism. You don’t survive eight years in a prison camp by giving up hope. Despite almost impossible conditions (and odds), you need to stay optimistic. Stockdale never lost hope.
“I never lost faith in the end of the story. I never doubted not only that I would get out, but also that I would prevail in the end and turn the experience into the defining event of my life, which, in retrospect, I would not trade,” Stockdale later said about his time in the prison.
The Stockdale paradox
So, Stockdale was an optimist right? Yes, but it’s a bit more complicated than that. Jim Collins interviewed him while writing his seminal book Good to Great: Why Some Companies Make the Leap… and Others Don’t. After hearing how Stockdale refused to give up hope and stayed optimistic throughout his internment, Collins asked him who didn’t make it out alive.
“Oh, that’s easy,” he replied. “The optimists. They were the ones who said: ‘We’re going to be out by Christmas.’ And Christmas would come, and Christmas would go. Then they’d say: ’We’re going to be out by Easter.’ And Easter would come, and Easter would go. And then Thanksgiving, and then it would be Christmas again. And they died of a broken heart.
“This is a very important lesson. You must never confuse faith that you will prevail in the end — which you can never afford to lose — with the discipline to confront the most brutal facts of your current reality, whatever they might be.”
From this, Collins identified one of the key things that differentiated great companies from others: The ability to accept brutal facts. Greatness demands optimism, but not in the face of obvious disaster. Collins called this the Stockdale Paradox.
Too much optimism
What happens when a bunch of executives enter a boardroom with their charismatic founder? The founder is optimistic, inspiring… and demanding. He has absurd expectations. He wants the impossible. (Steve Jobs was a good example, who employees said had a ‘reality distortion field’ around him). The executives are eager to seem equally gung-ho, of course, even those who know that a crucial deadline won’t be met, so the brutal facts are ignored.
“We’re going to be shipping product by Christmas,” they all say. And Christmas comes, and Christmas goes. Then they say: “We’re going to ship by Easter. And Easter comes, and Easter goes. And then Thanksgiving, and then it’s Christmas again…
An overdose of optimism is a dangerous thing. While optimism is a crucial tool in the entrepreneurial kit (especially when it comes to motivating employees), it can lead to disaster if administered too liberally. Like morphine, a sensible amount can take the edge off a scary reality, but too much will distort reality to such an extent that you become oblivious to existential threats.
And how do you keep your company off the morphine? Collins suggests four things: Lead with questions, not answers. Engage in dialogue and debate, not coercion. Conduct autopsies without blame. Build red flag mechanisms. If you do this, optimism becomes a powerful tool, and not a ticking time-bomb.
Alan Knott-Craig Weigh In On Living Your Entrepreneurial Dream
From raising capital to getting the most from your employees, business ownership is all about living your dream.
How do I chase my dream? — Sam
First, you need money. Moola. Cash. Capital.
Chasing your dream without enough capital is akin to having a premature baby. All the baby’s energy goes into survival rather than growth. Start-ups are not about survival (paying the bills). They’re about growth (getting rich).
Before you chase your dream, make sure you have enough capital. Keep your lifestyle simple and living costs down. Save up enough to last two years. Or marry rich.
I’m considering selling my business. I need help. — Clark
Before you enter M&A conversations, first decide: “Am I a seller?”
You won’t find it easy backing out during negotiations. Don’t start a process you can’t finish. Don’t look for buyers if you don’t want to sell.
Most people I know that sold their business regret it, unless they had a very specific reason: i.e. the business was about to die, or the business can’t grow without a big brother, or they want to leave the country. If that’s your reason, go ahead and sell. If it’s simply to have a pile of cash, reconsider.
What are you going to do with the money? Put it in your bathtub and wash yourself with notes? Buy fancy cars? Buy a fancy spouse?
Lots of money in your pocket can only tempt you to the dark side. Eventually you’ll get bored and you’ll want to start a business again, and you’ll start all over. If you don’t need to, don’t sell.
How do you instil an ownership mindset in your staff? — Johan
It’s hard to work with people that have no drive. Some people just come to work and go home with no planning or vision or energy. Start with getting rid of the bad apples, then start fine-tuning recruitment to only let in the folks with a good attitude.
Use some of these methods to motivate and encourage buy-in from staff:
- Ask staff for feedback.
- Do not tolerate mediocrity.
- Make sure everyone knows their job.
- Share information. Keep everyone in the loop.
- Look after your staff and they’ll look after you.
- Lead by example. Pick up litter. Be first to office. Be last to leave.
How do I determine what venture to dedicate my energy to and when do I know when to stop pursuing one of the opportunities? — Mike
Go with whatever gets traction first. Ruthlessly scratch everything else off your to-do list. Generally speaking, go with the business with the most tried-and-tested business model.
I left my former employer to move away from the legal side of things. I know that I have the technical skills in this area and I have used that in completely running the legal side of the micro lending venture, but the ultimate aim is to be an entrepreneur/businessman rather than constantly seen as the ‘lawyer’. Do I discontinue the legal consulting or slowly taper off? — Mike
If you can live without the sideline income, do so. Focus 100% on business. If you need the money, keep selling hours on the side.
I have a very successful farm store. I’m considering expanding countrywide. Any advice? — Elo
Ask yourself “why?”
If the answer is to get rich, that doesn’t necessarily mean you need to scale your successful farm store.
Maybe a better option is to take the free cashflow of your farm store and invest it in a different business. An annuity revenue business. A business that will make money while you sleep, rather than only when you’re behind the till. Cash cows are hard to come by. If you don’t want to lose your cow, don’t try to scale it unless you’re 100% sure you never have to sell it.
Can you help me flesh out the detail of a pitch to investors? — Mamkhele
There’s only so much you can rely on others for. At some point, you need to man up and do the work yourself. You need to answer the questions yourself. The answers for all pitch-related questions are on the Internet. Google it. No one will save you, only you will save you.
Listen to this
Alan’s audible book Be a Hero: Make Life an Adventure is now available on amazon.com and Audible.com
Read by Alan himself, Be a Hero is a collection of stories on how to make your life an adventure by changing your mindset and tackling adversity.
Go to amazon.com or audible.com to download your copy. Be a Hero is also available in Kindle and paperback through Amazon.com.
Read ‘Be A Hero’ today
What Real Entrepreneurs Do When They Hear The Word ‘No’
Are you strong enough to push through early struggles?
In this video, Entrepreneur Network partner Jason Saltzman sits down with two founders to hear their stories of perseverence and resilience.
Raul Tovar is the co-founder of WindowsWear, a fashion tech company based in New York City that archives display windows. He moved from Mexico to New York determined to make something of himself and resolved that he would not go home empty-handed.
Jordan Wan is the founder and CEO of CloserIQ, which builds sales teams for startups. He started his business through tragedy – losing his mother and his marriage in the early stages.
You might think these difficulties – whether moving, or being told their ideas weren’t good enough, or working through tragedy – would be enough to make them give up. But they didn’t. They only spurred them to greater success.
Click play to learn more.
This article was originally posted here on Entrepreneur.com.
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