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Are You Suited to Entrepreneurship

Are You Building A Business Or Creating A Job For Yourself?

Is it just you behind a desk or are you delegating the work? The distinction is an important one.

Doug and Polly White

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We recently spoke with a member of our co-working space who owns a PR/marketing company and is the only employee of his company. His firm is successful and has been in business for more than three years since he left a large organisation where he was the head of PR.

Our conversation got around to the issue of extra help. When he needs additional skills to fulfill assignments, this man told us, he contracts with other professionals. That was interesting, we thought. Because, although our PR friend is talented and able to support his growing family, his comment about contracting out work raised a question for us.

“Was he trying to build a company or create a job for himself?” we wanted to know. It was a question that struck a chord with this man – one that he later came back to discuss.

In that context, we want to state that we think that we consider either choice a valid one, but one that should be a specific choice, nonethless. We work with and mentor dozens of small start-ups. And many start as single-person firms completing short assignments for a variety of other small or midsized companies.

 Most of these individuals used to hold positions with larger organisations doing essentially what they do now. Some left their jobs for the chance to build a company; some wanted more flexibility or the autonomy to choose their own assignments. Others lost their jobs and turned to freelance work out of necessity. Either way, they are now part of what we know as the gig economy.

There are more than 28 million small business in the United States. Of these, single-person companies are in the majority, representing three-quarters of all small businesses. These individuals, whether they planned it or not, have created a job for themselves. They will not hire employees or scale their businesses. Of course, this need not be negative.

Done right, a one-person business can actually make good money. It can give the owner the flexibility to choose assignments that are interesting and fulfilling, and to enjoy the flexibility of working when and where he or she chooses.

The “micro-business” category

A person working alone, or essentially alone, is a business category we call a “microbusiness.” The defining characteristic of a micro business is that the owner or principal is doing the primary work of the business, whether that means providing PR services or baking cookies. He or she may have helpers in the form of other freelancers, vendors or assistants, but the preponderance of the revenue comes directly from the work of this principal.

The key to the success of a micro business is how well the principal does its primary work, which includes selling. We find that the biggest challenge in a micro business is finding a steady stream of work. By the way, our consulting practice is a successful micro business. We have one paid full-time employee, our marketing assistant, but we do the primary work of our business – consulting.

The small business structure

Many people who own micro-businesses choose to stay at this size. However, if you want to build a business, you will need to grow, at least to what we call a small business structure, where the primary work is delegated to others. The owner might keep his or her hand in it, but others do the preponderance of the work. At this point, how well the principal does the primary work of the business is not nearly as important as it was when the enterprise was a micro business.

Personally, we found it difficult to transition to a small business structure in our consulting business for a couple of reasons. First, when people hire Doug and Polly to consult to their small business, they want Doug and Polly, not an associate. Second, we are limited in the amount we can charge to the very small businesses we serve. The fees we charge are not high enough to pay talent at the level we would want and still provide a sufficient markup for our firm. Therefore, Whitestone Partners has stayed a micro business.

Related: 4 Tips To Secure Funding For Your Start-up

It’s important to note that the role of the entrepreneur changes dramatically as a business moves from micro to small. In fact, at the point of transition, the principal has to let go of doing the very thing that made the company successful at the prior step. In a micro business, the business lives or dies based on how well the owner performs the primary work of the business. This makes sense. You have created a job, and you keep it or lose it based on how well you do the work.

But, if you choose to grow to a small business structure, success depends on how well the principal hires and manages workers. If you are the principal, your role will change. If you want to bake cakes, stay a micro business. If you want to run a bakery, you need to build a business. This is a scary step and one that can cause the principal sleepless nights.

Many people we mentor balk at this transition when they realise they will be responsible for the livelihood of others. However, to grow a business, yourself,, eventually, you will need to hire and manage employees.

Next . . . the midsize business

If you’re successful at the small business stage and choose to continue to grow, you will become a midsize business. The business has transitioned from small to midsize when at least one layer of management has been inserted between the principal and those doing the primary work. The principal has gone from managing workers to managing managers. This might sound like a small change. It is not.

To effectively utilise managers, the principal must delegate decision-making authority to them. This means giving up a measure of control, which is often difficult for entrepreneurs who are used to making every significant decision in the company.

This also is the transition with which growing companies most often struggle. Letting go of some control is a scary thing for entrepreneurs, and they are right to feel trepidation. Ineffective delegation can lead to the ruin of the business – we’ve seen it too often. To enable effective delegation, the principal will need to ensure that the appropriate infrastructure is in place. This means making certain that the business has the right managers, that processes are well-documented and that appropriate metrics are in place.

Meanwhile, if you want to create a life that has flexibility and autonomy and allows you to work when and where you like, you should probably choose to stay a micro business. As we like to say, you can create a great job for yourself. If you want to build something more, you will need to move to a small business structure. You will know that you have transitioned from micro to small when you have delegated most of the primary work of the business to others.

Related: 7 Strategies For Development As An Entrepreneur

To truly scale a business, you will need to transition to midsize or larger. You will have done this once you’ve delegated day-to-day decision-making authority to a layer of managers that is between you and those doing the primary work of the businesses.

Each choice is valid and comes with its own challenges. However, we believe that it should be a conscious and specific choice. If you are unsure which direction to take, find an experienced consultant or mentor with whom to explore your options, skill sets, and desires. Then move forward with purpose in the direction that works for you.

This article was originally posted here on Entrepreneur.com.

Doug and Polly White own Whitestone Partners Inc., a management-consulting firm that specializes in helping small businesses grow profitably. They are also co-authors of Let Go to GROW, a bestselling book on why some businesses thrive and others fail to reach their potential.

Are You Suited to Entrepreneurship

What Is Limiting Your Entrepreneurial Mindset

This contribution contains six critical paradigms of thinking that should be avoided and used to constitute an empowered and creative entrepreneurial mind set.

Dirk Coetsee

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“The mind that sees the limitation, is the limitation.”

–  Siddartha Gautema

The Led Zeppelin legend Robert Plants’ voice echoed in my ears. Thereafter I listened to the late, and very unique Amy Winehouse. Their unique voices, personalities, and songs contains some ‘voodoo’, it reaches to the dark corners of your mind and then lifts your thoughts to limitless dreaming and thinking, or that is my experience at least.

amy-winehouseTheir creativity transcends boundaries set by rules of verse, song writing, culture, and geography. So entrepreneurial of them! True entrepreneurs do the same as the great Robert Plant and the mesmerising Amy Winehouse, they break through boundaries and limitations, make their own rules and find energy within the burning desire to succeed.

Like songwriters and other performers Entrepreneurs are creators and therefore must be very creative in their thinking especially when it comes to problem solving. Entrepreneurs must never limit themselves in terms of opportunities nor in their thinking, for it is their thinking that either recognises and creates or destroys opportunities.

Related: 7 Common Misconceptions Young People Have About Entrepreneurship

On your journey as a limitless international entrepreneur there are thinking patterns or programmes that you should avoid and there are also ways of thinking that you should practise for:

“The mind that sees the limitation, is the limitation”

Break through your own limitations as an entrepreneur by changing your thinking and as a result the quality of your actions and results. Albeit hard, your thinking is something that you definitely have control over.

This writing contains three critical paradigms of thinking that should be avoided but also three essential elements of thinking that constitutes an empowered and creative entrepreneurial mind set:

Limited thinking paradigms:

1. A sense of entitlement

As long as you feel entitled to blame others for your limitations or lack of performance you will suffer and experience severe limitations within that sense of entitlement. This world owes you nothing. You owe all the best form of yourself instead. You are on an entrepreneurial journey to be the best you can be and freely give of yourself as an example to others, in order to create more strong and powerful entrepreneurs. In return you can receive limitless abundance that is if first, you have trained your mind to think within the limitless paradigm of abundance.

2. The “little me syndrome”

“The meaning of life is just to be alive.It is so plain and so obvious and so simple. And yet, everybody rushes around in a great panic as if it were necessary to achieve something beyond themselves.” – Alan W. Watts.

“I do not have the charisma of a Richard Branson nor the presence of a Tony Robbins.” “I do not come from money nor did I have the opportunities that others had.” “I do not have the talent of a Jeff Bezos nor the fiscal discipline of a Warren Buffet.”

Does that kind of thinking patterns sound familiar to you? If it does, stop it immediately for that thinking will confine you to the limitations of your “little me thinking”. Only Tony Robbins can be Tony Robbins and only the Dalai Lama can be the Dalai Lama. Nelson Mandela was as unique as can be, only to prove to you that you must be the best form of yourself as they were.

Believe in yourself. Back yourself. Overcome all obstacles. If not, who is going to believe in you and back you if you do not even believe in yourself? How do I build belief? By consistently taking action albeit small steps, by constantly learning and improving, by embracing useful change, and by being humble enough to sincerely ask for help within areas that you need it.

3. Believing your own excuses

Excuses often start with the words, “Yes but”, followed by what you think is a valid excuse for non-performance or for not doing something that you do not like. Excuses are so limiting! A precursor to limitless thinking is to remove excuses from your thinking and replace it with solution-driven thinking.

Solution driven thinking simply means that you do not ignore the challenge at hand but instead of dwelling on the bad feelings around the challenge you immediately start thinking on creative solutions to the problem. More importantly take immediate action even if it is by doing something small at first.

Related: Are You Building A Business Or Creating A Job For Yourself?

Limitless thinking paradigms:

1. Extreme ownership

Take full responsibility for your life and your entrepreneurial journey by firstly acknowledging that your life and your business is your full responsibility and nobody elses! Nobody is going to do it for you! Take extreme ownership that nothing will change unless you do.

Take extreme ownership of the fact that developing your skill set is your responsibility. Your decision to take immediate action on your vision and goals instead of procrastinating will serve you well. Thinking in terms of extreme ownership takes away the frustration of focussing on external factors such as a ‘bad economy’ and slowly but surely reveals your own limitless potential to you and is a catalyst for actualising your true potential.

2. Embracing change

A lot of ‘lip service’ is given to embracing change, yet very few people actually do embrace transformational change in a practical sense. A common reason for this is that change is uncomfortable especially in the beginning part of the journey as you move outside of the boundaries of your ‘comfortable comfort zone’. If you can sincerely answer yes to the following two questions and more importantly immediately take ‘massive action’ on the following two questions’ answers you will eventually find that, albeit uncomfortable at times, a purpose driven change journey is the most worthwhile experience you can imagine:

“When we apply the suggested changes will it serve our company in terms of growth?”

“Will we grow as people and be stronger and more successful for it when we apply the suggested changes?”

3. “Stratosphere thinking”

Remove all biases from your thinking and carefully consider all limitless options within any situation. Align your thinking to what will really serve your life purpose and what will not. Remove the self-imposed limits to your thinking such as “the little me” syndrome and your life experience will be limitless eventually. More importantly actualise your thinking by removing procrastination from your thought patterns and take immediate and confident action. Now!!!

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Are You Suited to Entrepreneurship

7 Common Misconceptions Young People Have About Entrepreneurship

What people think entrepreneurship is often bears little resemblance to the grind the typical entrepreneur is living.

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Google recently conducted a survey to see what young people think about popular brands. It turns out that brands with an entrepreneurial story behind them are considered the coolest.

Companies with cachet among the younger generations included Tesla, Facebook, Apple and Airbnb. Millennials and Gen Zers (the cohort younger than millennials) admire enterprising technologists like Elon Musk and Steve Jobs for their success inventing tech that has reshaped the world around us.

Though youth imbues a sense of possibility but inexperience blinds youth to the realities of entrepreneurship. Below are seven misconceptions young people have about entrepreneurship. Being aware of these will help budding entrepreneurs to establish more successful companies.

1. Education and tech entrepreneurship are incompatible

Steve Jobs, Mark Zuckerberg and Bill Gates all dropped out of school to start wildly successful tech companies. According to their legends, these visionaries didn’t need a degree in order to create multibillion-dollar businesses. In fact, some might say that their education was a hindrance to their entrepreneurial spirit.

But Jobs, Zuckerberg and Gates are exceptions. In most cases, aspiring entrepreneurs will benefit from lessons learned in the classroom. Readers should also note that these dropouts were stellar, dedicated students (inside and outside of the classroom) until they left academia. Zuckerberg and Gates were such good students that they were able to attend Harvard University.

Related: 9 Top Tips For Young Entrepreneurs

2. Great products don’t need to be marketed

Some have a misconception that great products don’t need sophisticated marketing plans in order to catch on. Young people aren’t the only ones who embrace this misconception, but it seems particularly prevalent among young entrepreneurs, who tend to focus on products instead of marketing.

However, it’s important to recognse that “field of dreams marketing” is exactly that – a dream. If you build it, customers won’t automatically come. The market must be educated about new products, especially when they are disruptive.

Take the iPod as one example. The product itself had been done before. Sony had already produced MP3 players. But the iPod caught on because the product was particularly well executed, and because of a marketing strategy that captured people’s attention.

The slogan “1000 songs in your pocket” was a stroke of marketing genius that helped to propel Apple to new heights.

3. The most successful businesses are based on the best ideas

As entrepreneurs we often believe that the best businesses are based on the best ideas. But in reality, the best businesses are the ones that are able to successfully execute a good idea.

While these two notions are similar, they are not the same. Organisations based on a good idea have the ability to address a real pain point with an acceptable solution. Furthermore, they are able to deploy that solution efficiently.

Simply thinking of a great idea is invention, not entrepreneurship. To be a successful entrepreneur, you must learn the business skills required to bring an idea to market.

Related: 10 Young Entrepreneurs Under 30 Share Their Start-Up Secrets

4. Smart employees don’t need to be managed

larry-page-and-sergey-brinSome young entrepreneurs believe that successful businesses simply need to hire smart people, and the rest will work out somehow.

But even smart people need to be well managed. Take Google as an example. In 1998 Google co-founders Larry Page and Sergey Brin hired Eric Schmidt to become the company’s CEO. Page and Brin realised that the organisation would need experienced leaders in order to succeed.

Schmidt ensured that Google had a solid layer of management in place to keep Google’s smart employees on track.

5. The customers don’t know what they need

In some instances, entrepreneurs have been able to start successful businesses by ignoring customer feedback. When Apple was developing the iPhone, most consumers would likely have asked for a smartphone with a better keyboard or a bigger screen. But few could have conceived of the revolutionary device Apple created.

However, while some entrepreneurs are able to develop a product or service that transforms consumer expectations, in most cases, listening to the customer is essential when developing a new business.

6. Success will come quickly or not at all

Young people look at entrepreneurs like Brian Chesky, who was 26 when he co-founded Airbnb, and assume that success will either come early in life, or not at all. But the reality is, success often takes time to materialise.

As mentioned earlier, thinking of a great idea is just the first step in creating a successful business. Execution of that idea is often the most important component of success. But learning important business skills requires years of experience, which is why success often takes longer than expected.

Related: 8 Reasons Young Entrepreneurs, or the Young at Heart, Lead the Way

7. Older people aren’t innovative

It’s a misconception as old as time: older people aren’t innovative. The reality is that every successful business relies on a combination of innovation and experience to succeed. In order for your business to move from a great idea to great execution, it will require all sorts of skills, and some of them can only be acquired with time.

Young entrepreneurs often look to a handful of hugely successful companies as evidence that entrepreneurship should take a certain form. In reality, entrepreneurship is more amorphous. Once young people set aside misconceptions about what it takes to launch a successful business, they will be more likely to develop a business that performs well.

This article was originally posted here on Entrepreneur.com.

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Are You Suited to Entrepreneurship

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…

GG van Rooyen

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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.

Related: Shark Tank Funded Start-up Native Decor’s Founder on Investment, Mentorship And Dreaming Big

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…

Related: 10 SA Entrepreneurs Who Built Their Businesses From Nothing

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.

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