I am often surprised when I talk to people interested in starting their own businesses. When asking about my experience as an entrepreneur, they’ll say, “You’re so lucky,” or “It must be great to be out of the rat race.” Statements like this make me smile because they couldn’t be less true. Luck has nothing to do with it. As for the rat race, while different, it’s faster than ever.
That’s why I wanted to share the realities of being an entrepreneur. First, a disclaimer: At the end of every day, I wouldn’t trade my current situation for any other option, and I’m grateful to be able to do what I truly love. However, being an entrepreneur isn’t the easy, carefree career path that many believe it to be; it’s actually quite the opposite. When everything is invested in your own business – time, money,passion and creativity – it can border on obsession. And when you work from home or your spouse or family members work with you, you rarely, if ever, leave the office – at least from a mental standpoint.
Let me start with a few hard truths of being an entrepreneur:
- It’s stressful. If you think meeting a boss’s deadlines or demands is tough, try meeting your own, especially when your personal savings are on the line. Maybe you’ve already taken out a second mortgage and your credit cards are maxxed out. Or maybe you’ve borrowed money from family and friends and you’re on the hook to pay them back, ASAP. This type of pressure lights a fire under even the most laid-back personalities. Not only will you feel the pressure to get your business off the ground, but you’ll also feel the added pressure to do so quickly to regain some semblance of financial security.
- It’s never-ending. Yes, it can be thankless to work for someone else, knowing your skills and talents are ultimately making someone else a bundle. But in most jobs, you can leave the work behind when you go home to enjoy your family, friends or hobbies. As an entrepreneur, the workload can be intense, especially during the early stages when you are the CEO, CFO, HR person, sales staff, marketing guru, tech guy,office manager, and tea maker. With all these roles, there’s rarely a moment that you feel your work is “done” for the day. There’s always something more you could be doing, like researching new markets, writing press releases, contacting new media, cold calling new sales outlets, developing new products and the list goes on. And that can eat away at time formerly devoted to family, leisure activities, workouts or relaxation. It’s a difficult balance to strike.
- It’s frustrating. Maybe you’ve partnered with someone who doesn’t have your best interests at heart. Or you’ve received a shipment of damaged products that you need for a trade show the next day. Or the media appearance you spent days preparing for is suddenly cancelled due to a natural disaster. As an entrepreneur, these types of situations happen on a regular basis. (I speak from experience; all of the above happened to me.) You never know what’s around the corner and it can be frustrating when you’ve planned to spend a day on product development, only to find out that you have to repair the cases of product packaging that broke during shipping.
So with this kind of stress, pressure and workload, why, then, would anyone subject themselves to being an entrepreneur?
The answer is simple: the positives outweigh the negatives:
- It’s rewarding. When you’re successful,you reap both financial and emotional rewards. There’s no better feeling than seeing a product you’ve worked hard to develop on store shelves, or when you’ve provided successful service for a grateful client. It’s exciting to make a sale or win a new client when you know it’s from your own hard work; it’s gratifying when customers tell you that your product, service or example has made a difference in their lives. And of course, turning a profit and knowing your business is financially stable are extremely rewarding as well.
- It’s flexible. Once you work for yourself, it’s common to feel you could never work in a conventional 9-to-5environment again. I believe it’s mostly due to the flexibility. Yes, you may work more hours, but you can do so on your own terms. You can stop work at 3 to pick up the kids from school without asking your boss for permission. You can work from midnight to 4am. You can work from home or your own office with daycare on-site. When you’re the boss, you call the shots, and the new freedom can be exhilarating.
- It’s the chance to create. Many entrepreneurs are driven by the need to build something great, help other people, or leave something behind. Perhaps it’s a business that your children can join and grow; maybe it’s the legacy of creating something that will be around long after you’re gone. No matter what the motivation, creating something from nothing that grows and develops through the years can be almost like raising a child; it’s your baby, and you’ve nurtured it to its current level of success. That type of fulfillment is difficult to duplicate in most other career paths.
Build Solid Back-Room Basics For Business Success
What do South African entrepreneurs really know about what goes on behind the scenes building of businesses?
South Africa has a vibrant start-up culture with great ideas starting out with a bang, but closing down with a whimper because entrepreneurs picture the glory at the destination, but not the nitty gritty of the journey to get there.
Be smart about scale
When I started out, I literally did everything myself. I negotiated and signed leases, I arranged the furnishing for our apartments and managed the interior décor process. When guests started using our apartments, I signed them in at reception, and then carried their bags.
At that stage, there was no money in my business to pay for attorneys, interior designers and decorators and there certainly wasn’t enough money for porters.
However, when we got to 70 apartments, it didn’t make sense for me to be a porter any longer, so I hired someone to do that job, explaining clearly what I expected of him. Before I did that, though, I spent time designing incentives for him so that he would be more affordable for me, and so that he could earn as much money as possible.
Related: Training Is A Two-Way Trick
Know your talents – and your limitations
There are certain things I’m really good at, but I know without a doubt that sales isn’t one of them – and without sales, you don’t have a business. I couldn’t afford a top-flight salesperson, but I knew that I could attract the right talent with the right business model. I set some high targets for Pamela Niemand, but offered her one third of the business if she met them. We both won: she earned a share in a successful, trend-setting business, and my trend-setting business became successful!
Use your skills – but know when to hand over
My background in corporate finance meant that I had all the accounting skills I needed when we first started out, but I knew that the time would come when I would need someone focused on that side of the business full time. Doing it all myself first meant that I could brief my first full-time accountant clearly and with a deep understanding of what would be required – and that I could help that person find and fix any challenges based on my experience.
In summary, my simple advice to anyone starting out would be to bootstrap your business yourself without investors or staff for as long as you can, but don’t over-extend yourself. Know when to delegate tasks away so that you can focus on what you’re really good at – but don’t do it before you have a solid understanding of what’s required. Know what you’ll never be able to do, and bring in that resource from the beginning – but do it based on performance-based incentives, so that your fledgling business doesn’t lose out if your early hires don’t perform.
The Myth About The Relationship Between Entrepreneurs And Taking Risks
This is the true relationship between entrepreneurs and the apparent illusion of risk.
“I can’t be an entrepreneur or start a business. I don’t have the appetite for risk.” This line is spoken regularly to brave few that leave the perceived safety of a job, take the plunge and venture into the unknown world of being an entrepreneur. However, there is a gross misunderstanding in the appetite for risk that entrepreneurs are believed to have innately inside of them.
The little-known truth is that the majority of entrepreneurs don’t like taking risks and according to Luca Rigotti and Mathew Ryan in their paper that explores a model for quantifying risk and its translation into enterprising action, the results were very interesting.
Risk is explained by these theorists as taking action where the outcomes are unpredictable as well the factors leading to that outcome are unknown. One of the theorists in this area, Saraswati, who coined the term “tolerance for ambiguity” has a more accurate description of what the outside world deems taking a risk.
In simple terms, entrepreneurs don’t go head-first into the shark infested water because they like the idea of danger and potentially being eaten alive; or the thrill of being able to say that they survived whilst others perished in a pool of maimed flesh. They carefully calculate that the sharks have been fed recently, some of the sharks are ragged tooth sharks that whilst looking like they are set to devour a human being, are actually incapable of opening their jaws wide enough to bite. For those sharks that still have space or who smell blood and can’t resist the urge to kill, the entrepreneur has a cage set up that he can retreat into quickly and a knife with which to protect himself.
Tolerance for ambiguity is the careful evaluation of what is known at the moment where a decision must be made and an open-mindedness for what is not known. This, coupled with the agility to change course when new information is presented, has earned the label of high risk appetite. The appetite is not for the risk, but it is the ability to move down a path, when all the information is not known.
I likened it to a person moving around in the dark holding a candle. The candle casts a light that illuminates a limited parameter around the person holding the candle. What is beyond the light that the candle casts, is unknown and potentially a risk. But as the person moves forward, the light reveals what was unknown and in the shadows. As the light reveals new information and new challenges added to what they have already learnt, the person can make better informed decisions. The tolerance is in not knowing what lies in the shadows yet to be illuminated by the candle and then the confidence in his or her own ability to act on what new information is discovered.
None of this behaviour is risky or irresponsible. There is careful consideration for what is known and a tolerance for what is unknown. And once there is more information available, a calculated next step is taken and more information is assimilated into what is now known. This is the true relationship between entrepreneurs and the apparent illusion of risk.
7 Skills Every Entrepreneur Needs To Adopt Today
Want to know what skills can help you build confidence and your business? Here are seven…
For some people, becoming an entrepreneur is as easy as stepping off a bus. They have a big idea, they bring it to life, they hire employees and the next thing they are in a building smothered in branding and living the business dream. For others, the idea and the passion are there but they are unsure as to how they can make these into a sustainable reality. Entrepreneurial spirit isn’t like instant coffee – you don’t add ideas and suddenly get all the skills you need to thrive.
Want to know what skills can help you build confidence and your business? Here are seven…
1. Believable vision
Make sure that your vision is believable and achievable. It has to live in the realms of possibility, not as a blue-sky idea that looks good on paper but wouldn’t work in reality. You need to be able to live this vision so make it realistic and achievable. This will not only keep you on track, but your employees as well.
2. Be inclusive
You need to ensure that every person who works with you feels as if they are part of your vision and understand it. They need to relate to where the business is going and how it plans to get there. Many leaders don’t understand why employees are not engaged with their business and it’s because many of them don’t actually understand what the business does.
3. Communication is critical
If you don’t have fantastic communication skills, then now is the time to hone them. When it comes to building employee morale, commitment and engagement, nothing works as effectively as constant communication. The same applies to client relationships. You need to repeat the vision and ethos of the company at every opportunity and you need to be part of the team that does this communication.
4. Be visible and transparent
You are communicating, now you need to make that communication genuine by being both open and clear. People respond incredibly well to transparency. They feel as if they are part of something that recognises their value and contribution and it fosters a more inclusive company culture. Often toxic cultures come about thanks to a lack of communication and visibility. People know when things are being kept secret and react negatively to it, regardless of whether they’re an employee, a customer or a manager.
5. Be practical
You aren’t going to build an empire in a fortnight so focus on a realistic and practical business strategy that has clear benchmarks and even clearer goals. Communicate these with the company and keep everybody on the same page. Practical and achievable means long-term success.
6. Build opportunities
As people become immersed in your company and part of its growth they will also need opportunities to grow. You need to tie their careers to the business and create opportunities for them.
7. Be human
It takes people to build a culture, a company and a future. It’s essential that you are human in your interactions and your treatment of others. The impact that a down to earth and authentic attitude can have on a company is extraordinary.
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