You need a lot of time, money and effort to have a chance of success in entrepreneurship – and even then, sheer dumb bad luck can undermine your best efforts.
Resilience, then, is among the most important traits needed by an entrepreneur.
As of June 2017, there were 2.24 million actively trading businesses in Australia, a year-on-year increase of 3.1%. However, the annual exit rate was in the region of 12%.
The rate has fallen from previous years, but many business owners still see the need to close up shop each year.
How can you avoid becoming part of that statistic? How can you be sure that you’re suited to running a business?
It takes a lot of resources for a start – not least money, time and manpower. However, above all what you need as an entrepreneur is the right characteristics.
Are you a natural-born leader?
Leaders are born, not made, so the saying goes – although at least one Fortune 500 executive disagrees. Lacking leadership experience certainly needn’t preclude you from starting or buying your own business. After all, some businesses have few or even no employees – online businesses can often be run solo, for instance.
Or consider B&Bs, which are often run by husband-and-wife teams – in which case it’s not about leadership but about separating the personal from the professional and achieving peaceable, productive cooperation.
As a business owner, there will be times when tough decisions need to be made, like letting staff go or confronting them about subpar performance. As the owner, it falls on you to make that call. Making the wrong decision is forgivable; avoiding the decision less so.
If you shy away from hard choices, it might not be wise to buy a business.
Discipline and delegation
One of the biggest perks of owning your own business is setting your own hours, agenda and the direction of the business.
But this takes discipline. "The harder I work, the luckier I get," film producer Samuel Goldwyn is quoted as saying, and this maxim certainly applies in business.
And yet there’s such a thing as taking on too much – which can mean ill health and bad decisions made from exhaustion.
Which brings us to the next ingredient of entrepreneurial success: delegation.
A business owner should
Rewards and risks
Business ownership can be exhausting, but you can really take pride in the services your business provides – they’re a testament to your vision and drive.
In hard-headed terms, the success of your business ultimately translates to greater wealth through higher profits and a higher sale price when you eventually come to sell your business. Conversely, however, if things go awry then it can leave you out of pocket – so you must shoulder great risk to your personal wealth as well as your pride.
Are you resilient enough to accept failure with good grace and apply the lessons learned to your next venture? The best entrepreneurs know how to fail.
As an owner, you can also get your business embedded in the local community.
From boosting your brand reputation to the simple satisfaction of giving back to the community that supports you, getting involved with the local community has many benefits. In corporate speak, this is called corporate social responsibility, which can include donating a percentage of sales to local charities or making your business more eco-friendly.
Entrepreneurs are passionate about what they do – the successful ones at any rate. Initially – though admittedly to a lesser degree if you buy a healthily profitable going concern – you may have to work some pretty long hours to get the business on an even keel.
Without passion for what you do, these long hours will be hard to sustain.
With the added burden of being ultimately responsible for the enterprise’s success or failure, the business will occupy your thoughts beyond the end of the working day, more so than the typical salaried employee.
Again, if you really enjoy what you do, this becomes a source of excitement more than a burden.
The fate of your business will rest on many variables – including sheer dumb luck – but the level of effort you invest is as important as any factor.
If you’re not willing to go the extra mile, it may well become part of the 12% of Australia-based businesses that go under every year.
7 key traits
Here are some traits typically shared by successful entrepreneurs. If you don’t possess most of them to some degree, business
- Passion and drive
- Willingness to take tough decisions
- A vision. The ability to see the big picture and plot a course in accordance with your long-term strategy
- Resilience. Can you cope with failure – often a key stepping stone to ultimate success – and bearing the burden of ultimate responsibility?
- Willingness to delegate
- Humility to
recognisewhen you’ve made a bad decision and flexibility to change course accordingly
Once you’re convinced that business ownership is the right path for you, it’s time to consider what kind of business you would like to be in charge of.