How Would You Like Yourself As A Boss?
Before plunging into a new business, find a comfort level and set goals.
More than 1 million people started a new business in 1996. Some, with elegant business plans and considerable corporate achievements behind them, will fail. Others, with no track record to speak of, will succeed.
What separates the winners and losers? Not much really, except that the winners have probably stared down some tough questions before they ever thought about a business plan. Here are five questions for people who think they want to work for themselves.
1. Can you hedge your bet?
It's romantic (and perfectly doable) to plunge head first into a new business. Some people need that dangerous thrill to get motivated. Yet I worry about people that quit their jobs and risk their life savings on a new venture in the belief that making failure so unthinkable will somehow make success more attainable.
If you can, build yourself a comfort zone at the beginning. When I started my business 35 years ago, I had the hedge of being with a law firm that permitted me to work on the side. I could put my feet into the water without having to sink or swim.
If the business of managing Arnold Palmer didn't work out, I could swim back to the island of the law firm. At the same time, I could go progressively deeper as the situation improved. This low-risk moonlighting with your employer's permission is an enviable way to test an idea.
2. How much guidance do you need?
The advantages of working for yourself are pretty obvious: you can make all the rules and set your own priorities. Unfortunately a lot of people aren't particularly good at those things. They are much better off having someone else tell them what to do and when to do it. This is one bit of self-knowledge you can't afford to fake.
3. What's your idea of maximum achievement?
It has taken me years to realize that some people in our company don't want to devote full time to maximum achievement. They share my business philosophy but not my personal goals.
My business mentality has always been to (1) maximize the use of my time; (2) achieve as much as I can; (3) earn as much profit as possible; (4) be creative; and (5) obtain ego gratification from seeing projects come to fruition.
I don't expect everyone to emulate me. Many people in the world want a 9 to 5 kind of job. They do it very well, they earn money, they get recognition and they have more time to go fishing or build a treehouse for their kids. That's perfectly OK.
Any organization has more than enough room for both types of individuals. But not at the top.
4. Do you have a business or a deal?
An acquaintance once told me, "from one business, you can make 10 deals, but 10 deals do not make a business." As an investment banker, he never forgot that his company's enormous trading operations were the "business" and the highly profitable underwriting of securities was the "deals."
Plenty of one-shot opportunities are out there that can make you money in a short period of time. But when the one-shot deal has run its course, where's the core business that sustains your cash flow and everyone's paychecks?
5. Does money matter?
Yes it does. Many people go into business to earn enough so they and their family can live in comfort. During the lean years, this seems to satisfy them and they con themselves into thinking that maximum profits don't really matter. They tell themselves they're laying a foundation, investing in the future and building an organization.
Ultimately, profits matter because you need them to turn on the lights, repay your bank and hold on to employees. An entrepreneur does not go into business just to make ends meet.
"Success Secrets" is written by Mark H. McCormack, the chairman, president and CEO of International Management Group and best-selling author of What They Don't Teach You at Harvard Business School. King Features.
|© 2010 Paws Business Consultants