My plan now is to clean up my debt this year and see if I can start again next year.

I know brilliantly clever people who’ve utterly failed when they’ve set up businesses; they’d walk any ‘tests’ with their eyes closed. And I know others who’ve been lucky.

If I was forced at gunpoint I’d say the key criteria are spotting an idea, loving the idea of fulfilling it, and having a cavalier disregard for the risks.

Just as long as you don’t think ticking those three boxes will make you a success. No more than we all know how to play football.

All of these comments will be used and considered.

Thank you, everyone for all the great comments!

~M

Good point about thinking versus acting. For me, thinking means serious contemplation and consideration, not just musing. Everyone has fantasized about starting a business, and some consider it, but only a few give it deep, careful thought. Most are better off remaining employees.

I agree with Adrian that entrepreneurship is a choice, though it’s certainly true that highly effective entrepreneurs make that choice quickly and easily — even unconsciously — giving the impression that they are “born” rather than made.

Anyway, great comments all. Most points are addressed in one or more of 15 articles about entrepreneurship posted in Soul Shelter last year. Links to all appear in the post referenced in “Website” above.

Cheers!

Tim

“Those who launched software companies between 1982 and 2002, for example, were 608 times more likely to have their startups join the Inc. 500 than those who launched restaurants, …” My question is: where are they now? I would suspect NOT in the software industry.

I blew the meaning of #5. What I meant was that when/if you spend money, make it on items that matter, and superfluous “stuff” like fancy buildings and $800 office chairs don’t matter.

Thanks for the comments

I think, though, that unless there’s something that really stands out for you, you need to really explore entrepreneurship before you get into whether you’re going to target businesses or consumers. That’s more a marketing question than one of entrepreneurship.

I really don’t think that entrepreneurs are “born” – it’s a choice just as a career is a choice.

@ MP97303 – I disagree with #5. I would say that before the age of the internet, it took money to make money, but I don’t think that holds true now. You can start a website for basically nothing and grow it into a cash cow. Perhaps J.D. or Nickel could provide a little more info on that.

I do agree with MP97303′s #7. Michael Jordan has an interesting quote:
“I’ve missed more than 9000 shots in my career. I’ve lost almost 300 games. 26 times, I’ve been trusted to take the game winning shot and missed. I’ve failed over and over and over again in my life. And that is why I succeed. ”

Great post Tim!

Yes they do, the moment the see a need in the marketplace and decide to act on it, they are in fact entrepreneur’s. That is exactly what I did in ’93 while preparing to become a Realtor. I overheard some agents talking about not having anyone to install signs anymore and how “bummed” they were at the thought of doing it themselves. All the other agents agreed.

Long story short, two weeks later my business was open. Now mind you, I had NO previous experience in business and had no members of my extended family with any experience. My guiding force was my “gut” and it served me well to this day.

16 years later, my business looks nothing like it did then. It has grown to the point of having 47 employees and has proven to be quite successful for all involved.

I firmly believe that there is not a single market out there that cannot be captured by an aggressive entrepreneur. Microsoft could be gone in a couple of years because of someone programming in their bedroom right this minute.

For those of you who are considering starting a business, I offer the following advice:

1. Stay small and fast. React to market changes before the “big guys” know what hit them.

2. Under promise and over deliver. If you know it will take 2 days to make a product, tell the customer it will take 3. This way, you have some wiggle room. Also, customers give you no credit for meeting expectations, but you might get a customer for life for exceeding them.

3. GREAT customer service.

4. Not all customers are created equal. Some are driven only by price and will go to a competitor if they charge $0.01 less than you do. LET THEM. You don’t want them. You want a loyal customer who values the quality product you deliver.

5. You gotta spend money to make money. Sure, you have all heard that before. What they don’t tell you is what to spend that money on. Fancy offices and expensive furniture DO NOT make you money. Productive, happy employees and capital equipment DO. I still use a door slab on saw horses from Home Depot as my office desk.

6. Learn what you don’t know. Read books. Then read more books. Take classes offered by SCORE. Take night classes at your local college. That’s what I did. I spent two years getting a post-Bacc degree in Accounting so I could understand the numbers that kept getting bigger every year.

7. Failure is only failure if you do not learn something from it. Trust me, you will make many mistakes. Learn from them. Don’t make them again.

For those of you about to begin the greatest adventure of your live, I wish you all the luck in the world.

a) Possibly the most lucrative activity that you can undertake, and

b) the hardest road to financial success that you can choose.

So, I recommend that you FIRST ask: do I NEED to become an entrepreneur to achieve my financial goals … and THAT depends on you required annual compound growth rate:

http://7million7years.com/2008/09/30/its-the-gradient-of-the-curve/

Thinking and doing are two entirely different things. In addition, what the article doesn’t cover is being able to do everything for your business aside from the skill. I run my own business, and I have to deal with budgeting, marketing, finding clients, maintaining client relationships, negotiating, bookkeeping. For people who intend to have a staff, there are issues of payroll, people management, buying equipment, etc.

One of the reasons so many business fail is because the business owner only knows how to do their skill, not run a business (think of any talented, yet struggling, artist/musician you’ve ever met). Those who don’t realize the sheer amount of time, energy and willpower needed to create a business will also fail. Being a Type A personality is not enough (or even necessary).

The article also seems to assume that said entrepreneurs are making selling a physical product. In my experience, and that of the other business owners I know, selling a service is far more profitable and enduring as a business.

I also recommend reading my article How to Be An Entrepreneur (http://smarteasymoney.blogspot.com/2008/08/how-to-be-entrepreneur.html), which lists the basic actions and knowledge an entrepreneur needs to get started.

Thanks for answering my question! I appreciate it.

This is very good advice and some very useful things to think about for people who are considering starting their own business.

The sort of thing I was scared of was what I read about in the E-Myth. This is the myth of the pie baker who loves to bake pies, and feels that she would love it even more if she didn’t have to deal with her annoying boss who restricts her in so many ways, doesn’t listen to her idea, and doesn’t pay her what she’s worth. Then she starts her own pie company and finds that she’s spending all her time doing accounting, marketing, and business development. She’s unhappy because what she really loves is baking pies, not running a business.

But I guess the answer to that question is in my own heart, not on a blog.

p.s. Eric, my name is actually Pace. (:

The first question that “Pace” posed is perhaps the most important. Being an entrepreneur is not for everyone and there are certainly a few qualities that are common to all who are successful in starting their own ventures. I honestly do not even see where Mr. Clark even addresses this question in the post. I personally had recently written a post called
Do You Have What It Takes To Be A Successful Entrepreneur? which takes a look at some of the shared qualities of successful entrepreneurs. I’ve also written one addressing the precautions of starting a business, Starting your own business? Take your time and do it correctly! which can be of assistance for anyone else looking to start a business.

Still though, it’s really REALLY scary, the thought of giving up a steady paycheck for a situation where everything is riding solely on YOU and YOUR ability to sell whatever ever it is you’re selling.