What personality traits are helpful for those starting a business? The answers to this simple question are shrouded in myth. The personal qualities of entrepreneurs are either positive or negative depending on who’s talking.
To the ex-spouse who watched the family’s nest egg get blown on a colossally expensive direct marketing blunder, the entrepreneur is a borderline criminal and certainly a fool.
To the politician who benefits from the jobs created by local business start-ups, the entrepreneur is a hero bravely facing the perils of financial disaster in an attempt to create a business out of nothing but a head full of creative ideas and a handful other people’s money.
Most would agree that entrepreneurs are comfortable with a high level of risk. Yet most entrepreneurs would likely disagree. They are likely to say, “Hey, with my business idea there isn’t any risk at all.” So perhaps a profound capacity for self delusion may be more accurate than a high tolerance for risk.
As a serial entrepreneur myself, I’d honestly vote for self-delusion over risk tolerance. I have started successful businesses and I have launched some miserable failures. At the moment of launch, I was absolutely convinced in the complete soundness of my business idea and plan, even when the plan was in my head alone.
It’s only when you run out of seed money that you begin to see the world clearly. At that point, when the world turns dark, the true entrepreneurs are separated from the dabblers. The true entrepreneur then changes tactics and strategies to make sure the business succeeds. If the business is to succeed, its because of the changes that happen in this brief period where the business starts to fail. If it succeeds, great. If it doesn’t, the true entrepreneur will rest briefly before coming back with yet another new business idea.
Here are some of the myths surrounding entrepreneurs and start-up companies.
Myth 1. It takes a great business idea. Not necessarily. You’re actually better off with a tired old business idea such as a copy shop of shoe store. Original business ideas are usually the first casualties. They are untried, unproven, untested. And a new business idea usually doesn’t come with an established market. Boring business ideas are the most trustworthy. To the CPA who wants to quit PricewaterhouseCoopers and become a thoroughbred horse breeder, the best advice is to forget about the horse dream and open an accounting office. Of course, that wouldn’t be very entrepreneurial. It would probably make the spouse happy. But then, a true entrepreneur would not likely have bothered with the trouble and detail of becoming a CPA.
Myth 2. It takes some knowledge of management. Nope. In fact, most people who take well to management make terrible entrepreneurs. To excel as a manager requires the ability to follow rules and procedures while implementing tried and true behavior manipulation techniques. Entrepreneurs have no patience for management. Most entrepreneurs are running on the raw motivation of getting out from under dysfunctional management. The last thing an entrepreneur wants to do is become a manager, which is why many entrepreneurs fail at the point when their start-ups grow large enough to require professional management.
Myth 3. It takes planning. Are you kidding? Start-up business planning is typically a poorly disguised effort to appease a skeptical spouse or to fool a loan officer. “So you don’t think I can do it, honey? Well, hey, just look at my business plan.” Spouses and bank officers alike are seldom swayed by this bull hockey.
Myth 4. It takes a balanced and realistic view of your possibilities. Yes it does. But typically, this “balanced and realistic view of your possibilities” doesn’t appear to you until you’re scrambling for your third round of funding.
Myth 5. Ninety percent of business start-ups fail. Actually, this may be the most surprising myth. Nearly 50 percent of businesses start-ups are still around five years later. For the home enterprise with it’s low overhead, the success rate is more than 50 percent.