If you have that urge to do things differently, a desire to change the status quo in any industry, a wish to solve problems, a high tolerance for failure, the ability to pick yourself up after a failure, and the willingness to accept financial risk, you might very well qualify for being an entrepreneur.
Entrepreneurship isn’t really a skill to be learned. You’re either an entrepreneur or not. Obviously, you can learn some things, but if you don’t have that inner passion and talent, it’s going to be very difficult to stand out considering that of all small businesses that started in 2023:
- 80% made it to the second year (2020)
- 70% made it to the third year (2021)
- 62% made it to the fourth year (2022)
- 56% made it to the fifth year (2023)
You don’t need more information to know that survival in the business world is a huge challenge. We’re not pointing this out to burst your bubble, but just to make you aware that being your own boss—while it’s cool and it allows you to try things that you normally wouldn’t get to do in a normal 9 to 5 jobs—entails a stressful lifestyle and calls for a lot of hard work and responsibility if you want to grow your business and be successful; it’s your baby, after all!
The right perspective
Why are you different? If you don’t know the answer to that, let’s help you answer it. You’re different because you’re going to put everything about your business in perspective and do things with forethought instead of depending on afterthoughts. Like many other things in life, you can be restricted in some things because of economic or even political situations, but those are usually only temporary delays or setbacks. Other than that, there are basic internal factors that every entrepreneur must be aware of, which will influence the success of their businesses. So, let’s take a look at them. Know your industry: It’s not enough to just know about your niche. Knowing about all the aspects of your industry is crucial for success because whatever happens in the industry will affect your business. Industry analysis is what you need in order to come up with a business plan or follow a business model. Knowing the industry should include Industry participants, distribution patterns, competition and buying patterns.
Let’s go back to the statistics we started with and add one more by telling you that price and cost issues account for 18% of failures of small businesses and startups. When running any business, you have to keep track of your expenditure and subtract that from how much you’re earning. You need to compare the total costs of the inventory of your sales to ensure your prices correctly represent the income you need to generate. To get things done efficiently, you can visit this site to see how a timesheet helps meet your business needs, as it’s crucial that you have a timesheet and keep inventory. Using this method can help you determine:
- Staffing/labor costs
- Idle-time costs
- Overtime costs
- Individual contributions
- Production time per unit
- Time spent per project/client, etc.
A timesheet template will bring consistency to the way things are being recorded. Updating your timesheet daily, weekly, or monthly—depending on how often you sell your products—will streamline your business, offering many other advantages, such as tracking projects, client management, and accurate billing, to mention a few.
Response to opportunity
Just as quickly as they come, opportunities can vanish. The ability to recognize and respond quickly to an opportunity is going to be a big factor determining your success. Not only are businesses very fast-paced, but the entire world is, thanks to the speed at which information reaches us through the internet. Many times you will have to make on-the-spot decisions. You can only do that when you’re flexible in your viewpoint and in the resources that you have. There is no room for rigid ways of thinking in entrepreneurship.
Closely tied to seizing a golden opportunity is risk-taking. It’s one of the main aspects of going at it on your own. If you want to reap the rewards of entrepreneurship, you must be willing to take some risks. Risk-taking isn’t about making uninformed decisions, but it’s not about completely guaranteed consequences, either. If you left a stable job to open up your own business, then you’ve already entered into the realm of risk-taking. It would be incorrect to describe entrepreneurs as risk-takers without including the word “calculated” in the definition. Almost all successful entrepreneurs say that it’s scarier not taking the risk at all, as opposed to failing. There will be failing at times, but there is very little reward without taking some risks.
If you’re expecting overnight success and give up too easily, entrepreneurship might not be meant for you. Entrepreneurship is filled with rejections, some of them quite humiliating, burnout, and stress. Applying the old adage that things might only get worse before they can get better could help you while you’re building up your business. If you’ve never owned a business before, it’s time to learn that failure can come with catastrophic results, but that’s not a sign that it’s time to pack up and leave. Rather, it’s the time to learn, which leads to the next point.
Learn from mistakes
We hear this all the time, but actually, a few people do learn from their mistakes. Maybe that’s because it’s not clear to them what it actually means. If you’ve learned from a mistake, it most definitely means a change of strategy is in order. Again, we have to go back to old sayings and phrases that make a whole lot of sense sometimes, and in this case, it’s you can’t keep doing the same thing and expect different results. A change could be a new strategy or abandoning an idea or a new investment, for example.
Building a team
Speaking of mistakes, when it comes to a common major mistake that many entrepreneurs make is thinking they can do it all alone. What is trending, yet a bad idea is solopreneurship, where you are everything, the owner and the sole employee. No matter how small your business is, you can never succeed if you go about it alone. This will only limit your true capabilities. You have to have the ability to pick, choose and build the right team around you. Think of it as any team sport; you can’t be the catcher and the pitcher at the same time. You want to learn how to outsource and delegate work. This is very important to understand because, throughout your business, there will be some things you have to do personally or in person, while there will be other things that do not have to be done by you. It will be clear which tasks need you and which tasks can be delegated to others to do.
Everyone thinks their idea is going to be the next—and newest—big thing, with sales going through the roof. That actually rarely happens. What does happen instead is improving on an already-existing idea? In other words, it’s not about reinventing the wheel, but rather improving the wheel. There isn’t one product or service out there that can’t be improved. It’s the creativity that opens us up to new ideas. It goes without saying that an idea must be doable. Sometimes it looks great on paper, but once it hits the ground, it’s not feasible. So, creativity has a very concrete part of it and not just the imagination at work. Yet, having said that, creativity transforms the impossible into possible.
Prior work experience
We’re zealots for statistics! A whopping 98% of company founders revealed in a survey titled “Making a Successful Entrepreneur” that prior work experience was an important success factor, while 58% said it was extremely important. This isn’t meant to discourage anyone from starting a small business without work experience, but it does mean that there needs to be an awareness that there is a gap between having prior work experience and not having any. This gap can eventually narrow as you learn from your mistakes and from others’.
Expanding your network is a big help in getting your business out there. Networking means knowing others, and it also means helping others. Whenever possible, lend a helping hand to others so they can do the same in return. You never know who you help today can help you tomorrow.
You will find several other factors that influence your success, aside from your own leadership ability to lead a successful team and to get people to listen to you. Some of these influencing factors are external elements, such as the economic environment, but many others are internal factors, such as organizing the business finances. When you plan well and understand what entrepreneurship entails, you will be ready to handle it. Working on what you’re passionate about, you can be a catalyst for real change.