March 21

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Do you Have What it Takes to Start a Small Business?

By Patrick Millerd


“To handle yourself, use your head; to handle others, use your heart” Eleanor Roosevelt

The dream when you're planning to start a small business is it’ll make you rich. You’ll be free to choose when and where to work! If and when to commute?  Enjoy more time with the family and indulge in your favourite past times? 

You’ll have arrived in a place where real life meets your utopian dream! A sort of a heaven on earth!

But wakeup! 

The dream is over!

That’s a maybe! Just a possibility!

More...

That’s the hype, the link bait stuff that’s pedalled on Facebook adverts! Pictures of Ferrari’s, 5-star hotels and tropical holidays enticing you to buy their “get rich quick”, "stay at home", "passive income" programs.

These visions and dreams drive the romantic notion that many people have of owning their own small business. Enticed by the thoughts of freedom, no boss, working on the beach or some exotic co-working space and a 20-hour flexible work week. 

A few years of struggle and then selling the business for millions.

While that’s a great vision, the realistic fact is that most small business owners are not capable of making these dreams a reality. 

And this horrible reality is supported by cold hard statistics

The Critical Element is You

Many businesses are doomed to failure as the potential small business owner sets off in the wrong way. With the wrong mindset.

With one or a combination of no business skills, an incomplete skill set or no experience of how to start or grow a business.  

Many decide to start a business after losing their jobs. Not having much clue what to do. Thinking that once they get it going they should be able to steer the beast, knowing that there are some gears that work but failing to see all those warning lights on the business dashboard. 

From day one the business is destined to fail as it is not built on a solid foundation, or with the right steps in the right order.  

But getting it right and having a successful small business is rewarding and financially satisfying. Enjoying the many advantages of business owner freedom. And while most SMB’s fail there are a few that meet or surpass any dreams.

But this success is far easier said than done and there are many potential pitfalls between start and success. 

The biggest pitfall is that many small business owners are totally unprepared for the journey

They set out without a clear destination, no maps or food for the road ... driven by a hope that they will get to where they want to, but not knowing precisely where that is. 

“Would you tell me, please, which way I ought to go from here?"
"That depends a good deal on where you want to get to."
"I don't much care where –"
"Then it doesn't matter which way you go.” 
― Lewis Carroll, Alice in Wonderland

Driven by blind passion and an undefined “mission” heading towards the cliffs of doom like lemmings. Ignoring any advice that doesn’t fit with this “mission”. 

While I agree that there will be many naysayers and critics this is the time to ask questions and listen. Reflect on all the information you can collect and everything you hear from anyone. 

If you’re seriously thinking about starting a small business that may become successful... take it slow... work step by step. 

You’ll be pressured (often by the monkey on your own shoulder!) to make quick decisions driven by FOMO (fear of missing out). 

To improve your chances of success you need a proven process, to do the right things at the right time. To be able to sift the real priorities from the endless list of "to-dos". 

Takeaway: use advisors with experience. Ones that have been there before and have a proven record of success, and for you ... use your head but trust your gut!

Starting Your Small Business with Self Evaluation

It’s hard to accept but the small business owner has a good chance of being the biggest barrier to success. Business success is not all about passion and purpose but focus and relentless action.

Making many small gains and shrugging off the failures or “experiments” that go wrong.

Knowing that the only element that you have full control over is yourself. Your choices you make.

Getting this first step ... the you ... right will improve your chance of creating a successful business and avoid being one of the many financially disastrous and emotionally painful failures.

At this time you will be the victim of many cognitive biases. The idea of a small business is very alluring, and it's easy to be trapped by the Dunning-Kruger effect, with when added to a dash of confirmation bias and a loads of optimism leads to a toxic mix. 

But a word of caution: remember that, “you don’t know what you don’t know”. 

This is the time for some honest self-analysis and understand that not everyone is suited to small business ownership and everyone needs help at some time. 

Throughout the evaluation process ask lots of questions and listen carefully to the answers. 

For the business to have any chance of success your vision must be clear. It is a well known fact that all great business have a clear vision and knowing their “why”.

Start off by asking, “What is your why?” Why are you doing this? What do you want? What is your vision? Will the potential payback be worth the pain and suffering of the relentless day to day business battles? The battles where the probability of success is less than 20%!

If you don’t know your why or if you are not clear about the concept then watch this inspiring Simon Sinek video.

Are you committed enough? 

Running a small business will be endless – late nights, weekends, missed family occasions, “unreasonable” customers, difficult staff and bureaucratic authorities. 

  • Are you prepared to make the all the required sacrifices? 
  • Are you tough enough? 
  • Will you keep going when it looks like everything is against you?

So before even thinking about what kind of business the first consideration is you. 

  • Do you have the skills to be a business owner? Are you willing to ask for help? Are you willing to learn new skills? Living in a world of change and challenges? 
  • Are you prepared and committed to take on the responsibilities and challenges of being a business owner?

Many small business owners start off without understanding that a small business is a work trap. Without any support systems and the resources of a big business everything depends on you. 

While it is easy to see all the benefits it is easy to overlook all the challenges.

The emotional and physical costs of not being successful are high. You have to be resilient, accept that there will be failures on the path to success. But knowing that the rewards of success make it all worthwhile.

Reality check over. If you've decided you are prepared to take on the challenge, then it’s on to the next step - how to start a small business.

Takeaway:  Not everyone is cut out to be a small business owner. 


Patrick Millerd

About the author

I help small and medium size business owners achieve success through managing the financial health of their business. By applying focussed goals for cash and profit and customer management.

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