Many people go into business for themselves for the wrong reasons. One of the most popular reasons people become entrepreneurs and start a company is to stop working for someone else and get a larger slice of the profit pie instead of working to make someone else rich.
However, the desire to be more successful is not the only motivation you will need to start and run a profitable business. Learn what differentiates an entrepreneur from other people and whether you have what it takes to go into business for yourself.
Wearing Many Hats as a Business Owner
One of the problems faced by new entrepreneurs when starting a company is that on day one, they are the Chief Executive Officer (CEO) of a business. This may seem obvious but remember that at the same time they just inherited the titles of CFO (Chief Financial Officer), CIO (Chief Information Officer), COO (Chief Operations Officer), and a host of other C-level titles and positions.
The trick is not only wearing all of these C-level hats, but also juggling them in a way that spells profit and not financial failure of the business. Lacking knowledge in one area, say finances, will naturally force you to overcompensate on other areas where you have the competent knowledge, skills, and abilities to plan and build a company.
Unfortunately, this does little to help you when financial planning is what you business needs. Make sure you have at least a basic, working knowledge of all of the major areas needed to go into business. At the very least, make sure you understand the concepts finance, accounting, marketing, and management.
Outsourcing Tasks as an Entrepreneur
If you have a textbook Type A Personality or are just naturally a control freak, you are going to struggle when starting up a new business. Part of juggling the responsibilities discussed above includes knowing when to outsource and when to keep a task in-house. What differentiates entrepreneurs from others is knowing when to let go.
You are never going to survive as a business owner if you are too much of a control freak to outsource what can be outsourced. In fact, you mantra as a new entrepreneur should be:
"I must outsource anything and everything that can be outsourced"
Spending too much time on repetitive and menial tasks is a sure way to cripple your business’ growth at the early stages of its life. Growth is important for a new company given that it may take you 3 to 5 years just to start showing a profit, and usually a small one at that.
Spending time and effort on tasks that can be outsourced takes you away from the planning and implementation of your business ideas needed to sustain and grow your business. The most successful entrepreneurs are those that can give up control and delegate to others. If you started your own business to gain control, remember that to gain control of your business’ growth and your financial independence, you must give up control of the small and menial details.
Surviving as an Entrepreneur
Your first few years as an entrepreneur are likely to be lean. This can be difficult for many entrepreneurs, especially when starting a business later in life. From a social perspective, you are going to have to listen to many people giving you business and personal advice and it won’t be long before someone, usually someone close to you, will recommend that you give up being an entrepreneur and get a “real job.”
What differentiates the hard-core entrepreneurs from other people is the ability to disregard statements like this and not be discouraged by appraisals of your success (or lack of it). Remember that the costs of starting a business come up front when the company is first formed. It is only later, perhaps 5 to 7 years, after the business starts to really grow that you can take advantage of the financial freedom you have created for yourself. Along the way, celebrate the little victories and don’t let people who have never worn an entrepreneur’s shoes influence your decision to push forward with or quit your new business. The real challenge is to keep going even when things are at their worst. Ask any successful entrepreneur and he or she will tell you that there were times when quitting seemed like the best choice.
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A list of what differentiates entrepreneurs from other people could fill volumes. However, the three points above are usually enough to either encourage or discourage the budding entrepreneur from starting a new company. Before you jump in with both feet, make sure you have the knowledge, skills, and abilities to make a serious run at financial independence by starting your own business.