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Saturday, June 22, 2013

Should You Go Into Business For Yourself?



Entrepreneurs are the lifeblood of the American economy. They’re the only people who know how to create jobs. So if we want to grow our economy, we need more entrepreneurs.

Does that mean you should go into business for yourself? Here are five questions to ask.


1. Do I need to be in control?
The number-one trait of an entrepreneur is that they need to be in control of the process by which they get results.

So if having a high degree of control is part of your giftedness, then running your own business may—emphasize may—make sense.

There’s an old adage that says entrepreneurs are people who can’t work for anyone else. There’s a grain of truth to that.

Entrepreneurs tend to have a picture in their mind for what could be and should be. Armed with that vision, they go to work to bring that picture into reality. For that reason, they like to stay on top of what’s going on and make sure it goes they way they envisioned. In short, they don’t want anyone else raising their baby.

Are there dark sides to that? Absolutely! But it’s a rare person who succeeds in running their own venture who doesn’t remain clearly in control of the enterprise.


2. Do I have a lifelong history of spotting potential and turning it into profit?
Lots of people remember their paper route, or selling Girl Scout cookies, or the lemonade stand they set up when they were 6. Those can all be great activities for kids that teach a lot about having a work ethic and how business works.

But if you’re thinking about going into business for yourself, you need to be able to see lots of situations throughout your life where you spotted an opportunity or a need, and then developed and executed a plan for seizing that opportunity or meeting that need, and making some money in the process. That is, after all, how business works. 

Having done that once is interesting. Having done it repeatedly is instructive. It says you have an instinctive knack for how business works.

But if you don’t have that knack—meaning you don’t have that sort of history—you probably have no business going into business for yourself, because you’ll be trying to be someone you’re not.


3. Do I know how to create a customer?
It’s true that entrepreneurs create jobs—but only if they create customers. In some ways, that’s the ultimate definition of an entrepreneur: someone who knows how to create a customer. Better yet, someone who knows how to create a whole market of customers for his/her product or service.

This a vast and complex topic, but the essence of the question has to do with how well you know and understand the person who is supposed to part with their hard-earned dollars to buy what you have to offer. What do they consider value? In other words, what are they really buying? Is it a pair of shoes, or a fashion statement? Is it a Christmas photo, or a keepsake for the family archives? Is it a hamburger and fries, or a great time with some friends? 

Customers never buy products or services. They buy value. Successful entrepreneurs tap into what people value and deliver it—every time!


4. Can I devote myself to the business passionately while making decisions dispassionately?
Business ventures tend to fail in one of two ways: there’s either too much head and not enough heart, or too much heart and not enough head. Great businesses have both, but always in balance.

Too much head and not enough heart means there’s no passion in the enterprise. It’s just a business. We do our work. We collect our fee. We do our paperwork. We go home. Yawn!

Do you want someone like that mowing your lawn, or doing your taxes, or catering your wedding, or representing your line of products? Probably not. In the main, people prefer to deal with vendors who are inspired. Who care. Who have something personal at stake in their work.

But there’s a balance. Because at some point, most entrepreneurs have to make some tough choices. Like trimming costs. Like saying no to a deal that just doesn’t work financially. Like letting someone go. Like maybe even shutting down the business if it’s just not working.

If you have so much of your heart invested in the enterprise that you can’t make the tough call, then you don’t belong in business for yourself. Because in the end, business is just that—business. You either come out at least a penny ahead at the end of paying all the expenses, or else they take you out of the game. If you can’t live with that harsh reality and make choices in light of that, you don’t belong in the rough and tumble game called business.


5. Am I committed to my business being the absolute best at what it does?
If I Google “pizza parlors” in New York City, I get 4,360,000 hits. Okay, most of those are “10 best” lists and stuff like that. But a site called Slice claims there may be anywhere from 800 to 3,000 pizzerias in New York City, with the best guess at 1,600.

Wow! Sixteen hundred pizzerias in an area that’s only slightly larger than Austin, Texas. By way of comparison, there are only 221 fire stations in the five boroughs of New York. So technically speaking, the city is more than seven times more equipped to deliver pizzas than it is to fight fires.

So should you open up a pizza joint in New York City? Not unless you’ve got the confidence that something about your pizza and/or how you serve it will cause your place to stand head and shoulders above the competition. Otherwise, you’re kind of wasting your time (and money).

Excellence (which is closely related to value, discussed above), is not just a better way to do business, it’s the only way to succeed in business. Oh, you may be able to survive with a mediocre offering. But is that why anyone goes into business—to survive?

As they say in sports, go big or go home. Either figure out a way to knock the ball out of the park every time with every customer, or stay out of the game. Because that’s who you’re going up against—people who really do care about hitting a home run every time. They’ll eat your lunch. Nothing personal. That’s just how business works.


Look, there’s nothing wrong with being in the employ of someone else. The vast majority of people are, and probably should be. And while we rightly celebrate entrepreneurs in our culture, everyone who works diligently and well in an honest job deserves our respect.

But if you just can’t work for anyone else, and you have an inborn knack for turning ideas into profit, and you understand what people are really looking for in some particular product or service, and you know how to throw your heart into your work without losing your judgment, and you are bound and determined to give the world the absolute best thing it’s ever seen—well, then, I suggest you put some flesh on those entrepreneurial bones by putting together a business plan.


Question: Tell me about the business you think you want to start—and why.


NEXT POST ON BillHendricks.net: Where Will What You Know Go When You’re Gone?

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