Characteristics of a Successful Entrepreneur.docx

8/13/2019 Characteristics of a Successful Entrepreneur.docx

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Characteristics of a Successful Entrepreneur

"Be able to sustain a financial commitment to whatever business you start.

Guts:

Guts means you must have an entrepreneurial instinct, which is an

overwhelming desire to have your own business. You must have the guts anddedication to be completely devoted to your goal. Incidentally, devotion toyour goal is much more likely if you have a love for your intended

business. Life is too short to start a business that doesn't give yousatisfaction and joy. And, through good times and bad times, you will stickwith something you love. As Solomon said, "There is nothing better for men(and women!) than they should be happy in their work-so let them enjoy itnow."Brains:

While appropriate educational credentials are important, entrepreneurial"brains" means more than scholastic achievements. To become a successfulentrepreneur, you must have a working knowledge about the business you planto start before you start it. Common sense combined with appropriate

experience is the necessary brainpower. Prudence, follow through andattention to detail are very important.Capital:

You will need seed money of your own plus sufficient cash to maintain apositive cash flow for at least the first year. In a future session youwill learn how to forecast future cash requirements through cash flowcontrol. Many businesses can be started on a very small scale with a smallinvestment. Then, as the business grows and you gain experience, cash flowfrom your business can be used for growth. In some cases you don't needstarting capital to hire other people because you might start by doingeverything yourself. The "do it yourself" start is a good way to learneverything about your business and also makes you better qualified todelegate work to others later on. You can control your risk by placing alimit on how much you invest in your business.

Step-by-Step Approach

"Hiring good staff members who also share the same philosophy has been

very important

Decide if you really want to be in business:

You will be putting some (not all, hopefully) of your net worth at risk.

You will run the risk of becoming eccentric, meaning creating a life thatis out of balance, with working hours taking away from other family or

pleasurable activities. There may be levels of stress you have notexperienced as an employee.

Decide what business and where:

Once you have decided you have the characteristics of a successful

entrepreneur and that you definitely want to be in business, then you mustdecide which business is best for you and where to locate that business.Selection strategy is covered later on in this Session.Decide whether to start full-time or moonlight:There are some interesting advantages and some pitfalls in starting as amoonlight business. (That is, a business you start in your off hours whilestill working at your current job.) More often than not, the advantages ofstarting as a moonlighter outweigh the risks:You avoid burning your bridges of earnings, including retirement, healthand fringe benefits and vacations.


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Your full-time job won't suffer if you maintain certain conflict ofinterest disciplines, including compartmentalizing your job and business

into completely separate worlds.

You can avoid conflict of interest with your job by choosing a businessthat is appropriate for moonlighting, such as: single products, real

estate, specialized food, e-commerce, direct marketing or family-runoperations.

There are great advantages for operating a family business. The family canrun the business while you are at work. You have a built-in organizationalstructure. You can teach your kids the benefits of being in business.

But there are also some pitfalls to consider in starting a moonlight

business:

There is a temptation to spend time at your job working on your moonlightbusiness. That is unfair to your employer and should not be done under anycircumstances. (You may need a family member or some trusted person to

cover emergencies when you are at your job.)

Another problem may be competing with your employer, which, again, is notright. Think of how you would feel or handle this employee if you were theboss.

Any kind of conflict with your regular work can jeopardize your job andyour moonlight business.

Overwork and mental and physical exhaustion can also become a very realproblem for moonlight entrepreneurs.

Selection Strategy

"As the saying goes, fail to plan and you are planning to fail.

Selecting the wrong business is the most frequent mistake that start-upentrepreneurs make. Here is a checklist to help you select a successful

one:Take your time and wait for the business that is just right for you. You

will not be penalized for missing opportunities. The selection processtakes a lot of planning and your experience and complete knowledge is vitalfor your success.

Don't tackle businesses that may be too challenging. It is better to

identify a one-foot hurdle than try to jump a seven-footer.

Try to identify a business that has long-term economic potential. FollowWayne Gretzky's advice, "Go to where the puck is going, not to where itis."

A big mistake can be an error of omission. This means you may fail to seean opportunity that is right in front of you.

Keep in mind that as a general rule specialists do better than non-specialists. Wouldn't you be more inclined to take your sick cat to aveterinarian whose practice is limited to cats rather than to a generalpractitioner?

Look for a business that will grow in today's and tomorrow's markets. Many

small retail stores are no longer in business because huge stores such as


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Wal-Mart and Home Depot provide more choices to the customer and often at acheaper price.

Follow the advice of Warren Buffett, Chairman of Berkshire-Hathaway Inc.

and the most successful business picker in American history: Mr. Buffettlooks for businesses that focus on a "consumer monopoly"with pricing power

and long-term predictable growth prospects. Here are two books that willgive you invaluable insights into how Mr. Buffett picks businesses toinvest in. You can copycat these basic principals to help select your own

business.BUFFETTOLOGY by Mary Buffett and David Clark. The previously unexplainedtechniques that have made Warren Buffett the world's most famous investor.THE WARREN BUFFETT WAY by Robert G. Hagstrom, Jr. Investment Strategies ofthe World's Greatest Investor.

Businesses to avoid are "commodity" businesses where you must competeentirely on price and in which you must have the lowest cost to survive. AsMr. Buffett has said, "In a commodity type business you're only as smart asyour dumbest competitor."

Most service businesses have pricing power. Pricing power means that youwill not need to have the lowest price in order to secure business. Yourcustomers will be willing to pay a fair price for a better product orservice.

Should you bet on a business you don't know when you can bet on a businessyou do know?

If you intend to manufacture a product, consider the pros and cons ofcontracting out production to a low-cost supplier. In other words, operatea "hollow corporation." A "hollow corporation" is a company thatsubcontracts manufacturing and packaging.

If your intended business is based on marketing an invention or patent,keep in mind to:First check to determine if there are any issued patents similar to youridea.

Be cautious about getting involved with firms that ask for up-front fees tomarket an invention.

No matter what you hope for, you will need a product to test, to show andto get feedback on.


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Things to Watch Out

"To get ahead in this business you do everything to get the job

Impatience

Do not let overconfidence short-circuit you from analyzing your selection

of businesses carefully. You must not fear of hearing the negative aspects;it is much better to be aware of them and face them early on.

Be realistic. Do not become lured by high rewards. They will come if you

choose the right business and if you understand every aspect of thebusiness before you open its' doors.

Required Activities

It is worth repeating again: The most common mistake and the most costlyone is not picking the right business to begin with. This is the time for

soul searching.IF YOU HAVE NOT DECIDED ON A BUSINESS, DO THIS:

1. On the top of a blank sheet of paper, write an activity you like todo (make this the heading). Do a separate page for each activity orinterest you have.2. On those same sheets list as many businesses you can think of thatare related to that activity.3. On the same sheets list all the products or services you can thinkof that are related to that activity. Use your imagination and think ofevery possible product or service you could do.4. Make a list of businesses that do better in bad times (one may beappropriate for you). Some examples might be pawnshops, auto repairs andfabric stores.

EXAMPLELet's assume you end up with three potential businesses: towing service,selling used cars and auto repairs. You can now make a comparativeevaluation using the following checklist (or better still your ownchecklist) with a 1-10 scoring system. This kind of analysis can help you

gain objectivity in selecting your business.

Towing ServiceSelling Used CarsAuto Repair

---------------------------------Can I do what I love to do?

Will I fill an expanding need?Can I specialize?Can I learn it and test it first?

This kind of analysis can help you gain objectivity in selecting your

business.

How To Evaluate A Specific Business You Have In Mind

Here are some questions to help clarify your thoughts:

1. Is it something I will enjoy doing? As Harvey McKay has said, "Findsomething you love to do and you'll never have to work a day in yourlife."

Also, if you're doing something you love, you're much more likely to stickwith it through thick and thin times.

My favorite activities are: __________________________I like to serve people by: ________________________________


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2. Will it serve an expanding need for which there is no closesubstitute?

3. Can I be so good at a specialized, targeted need that customers willthink there is no close substitute? For example, in California,

nobody comes close to See's Candies.4. Can I handle the capital requirements? In Session 8, you will learn a

simple cash flow control method to forecast your future cash needs.5. Can I learn the business by working for someone else first?6. Could I operate as a hollow corporation, without a factory and with a

minimum number of employees? For example, if you have in mindmarketing a line of furniture, you might consider outsourcing to amanufacturing vendor in China. Cost savings is often the primeobjective but you also free up your time and capital. The major riskis the performance of the vendor and your success in developing good

relationships that provide mutual benefits.7. Is this a product or service that I can test first? Your concept of a

successful product or service may not be in harmony with the realityof the market place. On a small scale, prove it out first. AsWolfgang Puck states: "I learned more from the one restaurant that

didn't work than from all the ones that were successes."8. Should I consider a partner who has complementary skills to mine orwho could help finance the business?

Make a "for" and "against" list regarding characteristics of the business.On a blank piece of paper, draw a vertical line down the middle of the pageand list on one side all the "for's" and on the other all the "against's."Sometimes this will help clarify your thinking. Or, you can use thetemplate provided at the end of this session. We have provided a "for" and"against" template for you to use at the end of this session.

1. Write down the names of at least five successful businesses in yourchosen field.

2. Analyze what these five businesses have in common and make a list ofreasons that make them successful.

3. Talk to several people in your intended business. Don't be afraid ofthe negative aspects of your intended business. Instead, seek out thepitfalls: better now than after you open your doors. Take notes if

possible. Write down the information as soon as you can.4. Analyze the competition that are not doing well and write down the

reasons.

5. Get Completely Qualified. The best way to become qualified is to goto work for someone in the same business.

6. Attend all classes you can on the subjects you need, for example:accounting, computers and selling.

7. Don't be afraid to ask questions or seek help from the mostsuccessful people in your intended business.

Decision TimeWhat could you sell or what services could you perform that would makemoney and you would enjoy?To complete this session you should have decided on a business or at leastselected a business you think would be best for you. To get the mostbenefit out of the next eleven sessions you should have a definite plan inmind.


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Top Ten Do's and Don'ts

TOP TEN DO'S

1. Live frugally and begin saving up money for starting your business.2. Learn your intended business by working for someone else in the same

business first.

3.Consider the benefits of starting a moonlight business.

4. Consider the advantages of operating a family business.5. Objectively measure your skills and training against potential

competition.6. Consider subcontracting to low cost suppliers if you're manufacturing

a product.7. Test market your product or service before starting or expanding.8. Make "for" and "against" list describing the specific business you

are considering.9. Talk to lots of people in your intended business for advice.10. Make a comparative analysis of all opportunities you are

considering.TOP TEN DON'TS

1.Don't even think about leaving your job until you have completedstart-up plans.

2. Don't consider starting a business in a field you do not enjoy.3. Don't risk all the family assets. Limit your liabilities to a

predetermined amount.4. Don't compete with your employer in a moonlight business.5. Don't be in a hurry to select a business. There is no penalty for

missed opportunities.6. Don't select a business that is too high a risk or hurdle. Go for the

2-foot hurdle.7. Avoid a business in which you must have the lowest price to succeed.8. Don't be afraid to seek out and learn the negative aspects of an

intended business.9. Don't let entrepreneurial self-confidence outweigh careful diligence.10. Don't let the promise of a conceptual high reward deter reality

testing first.**************************************************************

**************************************************************Collete Paul:STM Media Inc. Publisher of Trade Magazines

My name is Collette Paul. My company is STM Media. We've been in businesssince 1991, and I am in business with my husband. We have a small

publishing company in Redondo Beach, California.I have some pointers that I would like to talk about. One is, if you'regoing to start a business, one of the most important steps will be decidingwhat business you're going into. Once you make that determination, make adetailed spreadsheet, which includes as many aspects you can obtain about

the business. Go to outside sources to get that information, includingpeople who are already in that type of business. Then assess the risks and

benefits very carefully before you jump off the edge.The second point is to be able to sustain a financial commitment towhatever business you start. Every business has a different financialcommitment. For instance, my business doesn't have a whole lot of

manufacturing equipment. We mainly have computers and people. But, we had


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to sustain our living expenses for a long time before we could realize aprofit.

I believe that you'll have a greater level of success if you find somethingthat you find a certain amount of joy in. If you choose a business that you

don't enjoy, I really believe that you'd be doomed to failure. So, if youhave something that you really see as a joy rather than work, you have an

opportunity to make your business a success.I'm in business with my husband. We planned this business and we've sweatedover it. We live it. If we were to do it over again, one thing we would do

differently would be to define our individual roles more clearly. His rolehas been publisher and for many years, I've done everything he doesn't do.That's probably not a good way to go. I think it would be important toidentify your strengths and your husband's strengths, or vice versa, andcapitalize on those strengths. You might consider it like a contract, and

be able to renegotiate that contract depending on how circumstances changein your business.

1.Learn from people already in your business2. Your financial commitment includes living expenses

3. Husband and wife teams: define your rolesElaine Mitchell:Specialized Veterinarian

My name is Elaine Wexler Mitchell. I am a veterinarian and I own the CatCare Clinic, a veterinary practice dedicated exclusively to the care ofcats, in Orange, California. I started the practice after I had been anassociate for five years in a small animal practice and decided that Iwanted to go out on my own. My husband told me that finding a niche withinthe veterinary world was my best chance for success, and I do believe thatspecialization was the right choice.

I thought about a lot of aspects of veterinary medicine that I enjoyed, andone was working with cats. I knew that feline practice or feline-exclusivepractice was an up and coming specialty. I decided to get involved withthat and opened an all-cat practice.

Since opening my practice almost nine years ago, it has grown in size everyyear, and I've grown from being a one-doctor practice to now being a three-

doctor practice. Through my specialty, I have become board certified infeline practice. I've written a book; I do some speaking; I'm going to havesome television segments on KNBC, hopefully in the next few months. So, it

has kind of blossomed from being a regular veterinarian to specializing inone species to even getting involved in different aspects of the media.

As far as what has led to success in my practice, I believe it to be manythings. One is hard work as well as dedication and a true commitment towhat I'm doing and really believing in what I'm doing. Also, hiring goodstaff members who also share the same philosophy has been very important.We are not a low-cost clinic. I kind of think of us as a Nordstrom-style

clinic where we spend a lot of time communicating with our clients,offering good customer service, and taking care of problems after they'vehad our services here.We have a lot of referrals for our business. Many of our customers are verysatisfied and refer other clients to us. I also have many clients who writeus cards and letters and always tell us that they've never had so much TLCand personal care as they have with their pets here at the clinic.

1. Specialists can do better than non specialists2. Customers will pay more for premium services3. Referrals will build your business


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Millard MacAdam:Pro Active Leadership

I'm Millard MacAdam, and I head up Pro Active Leadership Consulting and

Training in Newport Beach, California. What I'm sharing with you is basedon my 16 years' experience as CEO of my own startup business, which began

when I was 27 years old.I urge everyone who wants to start a new business to reflect on five keyquestions. If you come up with solid answers, you are more likely to be

successful.The first question is: Do I have a passion to carry out the tasks necessaryfor the business to be successful? People who go into a business for money-motivation alone are very likely to fail over time.The second question is: Have I clearly defined a high integrity set of

governing operating values that will support the delivery of qualityproducts and services to my customers? Will I be able to promise a lot anddeliver more?The third question to ask yourself is: Do I have adequate funding in place,not just promised, to make sure that the business can make it through the

first year without having to deal with financial crunches?The fourth question is: Do I have the necessary leadership and managerialskills to implement a complete written business plan that serves as myworking guidelines? As the saying goes, "Fail to plan and you are planningto fail."The last question to ask yourself is: Do I know how to attract, select andhire only the best staff members? There's no excuse today for not usingmodern selection technology along with effective interviewing strategies tohire only the best staff members for all positions in your business.There are other questions you'll want to ask yourself after completing theMy Own Business course. However, by answering these five questions, you'llgain a good sense if starting the business you have in mind should be a goor no go for you.

Using checklists will help spot your strengths and weaknesses

Sophia Garcia:A-Z Glass Company

My name is Sophia Garcia. I own A-Z Glass. I've had the business since1980. The worst thing I did was mortgaging everything we had in order to

purchase this business including our home, furnishing, expensive jewelry,automobiles and a small income unit. That was also the best thing we did

because I was afraid of losing everything every day, so it made me workthat much harder. When I purchased this business, it was doing the highend. The business had been here 35 years and it was mainly designers andarchitects. The recession hit and companies were going out of business, yetI was not too aware of this at the time. At that time, there was a push for

minority, woman-owned, small businesses. So, I had to get myself certifiedas a woman-owned, minority, small business. And I had to focus on customersthat really valued my certification, and that was the state, the city, andthe federal government. So, once I was certified, I was able to bid citycontracts. During that time the earthquake hit and the city rioted. Theseevents were blessings that actually promoted our business.The support of my spouse was very important because I work many, manyhours. And I have a God, and that helps me. Those two things I couldn'thave done without. For me, it has been prayer and going home exhausted andgetting back up and always being on call - we're on call 24 hours - thatkind of pulled us through the real rough times.To get ahead in this business you do everything to get the job. I sub somework out to a carpenter and if customers call and ask, "Well, do you clean


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this or do you do that?" Yes, we do and if we don't know how, we learn howto do it. In hindsight, probably one of the better things I did when I

bought the business was that I also bought the building. I had to subdividethe building and turned it into rental offices so I could get income, and

that helped us pay the mortgage. I am very happy that I purchased thisbusiness. I needed a change. This is probably one of the better things that

I've done in my life. It was a lot of work. I'm looking to retire in fouror five years. Lots of luck.

1. Some government contracts favor minority, women-owned businesses2. Sometimes you need to offer more services to get the jobDecision Time

1. What could you sell or what services could you perform that wouldmake money and you would enjoy?

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