There were a couple of articles today on starting as an entrepreneur. One was geared toward showing investors the entrepreneur is committed. The other was on ways NOT to start as an entrepreneur.
Both are useful as self examination tools even if you’re not currently starting a business. If you have an existing business, you can consider whether you still have what it takes to make it as an entrepreneur.
Showing Commitment as an Entrepreneur
Since investors at the beginning of a venture are betting on the small business idea rather than an established system, they want to know the idea is fully supported by the person who came up with it.
These are some ways investors judge someone to be fully committed to his idea. Even if you’re not looking for venture capital, this is a good way to examine yourself to see if you’re giving it enough to really get things going and grow your small business.
- All or nothing – not halfway or as one of many efforts
- Sacrifices – going with less especially to get the ball rolling
- Hidden motivations – they want to see you have other reasons to make it work such as family obligations or wanting to make your first big mark on the world
- Skin in the game – you have something vested in a good outcome
- Characteristics – you can function as Gerber’s 3 types – technician, manager and entrepreneur
- Patience – you’re willing to reinvest and work toward long term growth
- Equity hoarders – you’re willing to save money to expand the business rather than put it all back out to investors
- Determination – see quote below:
One has to admire entrepreneurs who are willing to have 10 or 20 rejections for every lead they receive. Nothing creates more entrepreneurial believability than a passionate belief in an opportunity. That does not necessarily mean the venture is a good investment, but I would much rather back entrepreneurs who are willing to spend years on an opportunity, and show genuine resilience, rather than those who give up after a few setbacks. The ability to recover from failure, in a country that, sadly, has little tolerance for honest entrepreneurial failure, is especially impressive.
How NOT to Start as an Entrepreneur
Another article goes into the wrong ways to do it:
- Don’t start a business in a field you’re unfamiliar with
- Don’t try to start it entirely on your own (find professionals, partners and mentors)
- Not adapting to the changing market
- Being afraid to make mistakes (that’s one of the best ways to learn)
- Being risk adverse (you’re probably not if you’re starting your own business)
- Don’t give up if you run short on cash
While it’s entirely possible to start a business without going all in, putting it all on the line is what people want to see if they’re going to give you money to do it. They want the best opportunity for success.
In truth though, many small businesses are started by individuals with their own money part-time. That’s part of what makes business great – there are lots of ways to get it right.
What you can’t do is start without a clear idea of how you’ll connect with and provide value to your customers. Without a way to provide value or make a sale, it doesn’t matter if you have 100 people working on it full time. But then that’s probably the first rule of being an entrepreneur and you probably already know that.