In my previous article, we covered 10 very commonly stated reasons that people give for wanting to become business owners, and why I think many of those are in fact potentially rather bad reasons. Today we are on a more positive bent, and drawing from my learnings from eight years in entrepreneurship, I’ll cover some what I consider to be great reasons to start a business.
You should consider starting a business if:
- You’re incredibly conscientious, organised and self-motivated
There’s no boss. There’s no annual review. There are no colleagues to compete with for promotions. No one will get annoyed if you’re late on a deadline or show up to a meeting with a sloppy slide deck. There may not even be any clients at the start.
There’s just you, your team, and your rapidly dwindling bank account – which will dwindle even more rapidly when you miss a juicy deal because you failed to keep intimate track of everything your business does or procrastinated on calling that client back.
Entrepreneurship is not for the disorganised. If you perform better in an environment that has more structure (e.g. school) than less (e.g. university), you may want to rethink. If you’re the kind of person who journals, makes lists and gets up at 6am to go swimming in ice cold water – perfect.
- You have the patience and tenacity of a bulldog
You will fail – several times. You will make mistakes – sometimes visibly. You will be told no – constantly. And it’s only Wednesday.
Tomorrow you have to pick everything up and do it all over again. Can you? How many times?
The businesses that are the easiest to set up have the least competition, which makes long term profitability very challenging. Succeeding in truly innovative or difficult businesses requires outstanding tenacity – the kind that will see you past the point where your rivals gave up. Forbes may love to feature VC-funded high growth unicorns, but the reality is that many businesses take years before they reach a point of success.
- You have unshakeable internal self-esteem and self-belief
Entrepreneurship carries a high risk of failure, and when that happens, you will be psychologically shaken down, chewed up for breakfast, and spat right back out. Are you confident enough in your own value, skills and sense of self to hack the constant attacks on your self-worth? (Hint: I wasn’t, and in some ways, entrepreneurship emotionally crippled me).
Entrepreneurship is not ideal for those who lack self-belief or who are prone to excessive insecurity and doubt. If you must do it despite that, then get a good therapist. Also, if you are the kind of person who gets a lot of self-worth and internal value from your job or status, then it may not be for you. Ask yourself how you’ll feel at a party when the woman next to you is a VP at Morgan Stanley, the man next to her is an AP at McKinsey, and your start-up just lost its biggest customer and is barely breaking even at five years old.
What you do not want, however, is so much self-belief that you are blind to your own weaknesses or the risks of failure.
- You have excellent communication skills
You could have an IQ of 157, a PhD from Stanford, and four years work experience at Google. But if you can’t eloquently, persuasively, passionately and clearly communicate to a wide group of people – potential investors, clients, colleagues, suppliers – then your experience as an entrepreneur is going to be rocky.
If you don’t have great communication skills, then either take a course – improv theatre is good – or find a business partner who does. No, you don’t have to be a super-gregarious, extroverted, flamboyant showman type. But you do need to be decent. (PS – communication skills and people skills often go hand in hand, but they don’t have to. I know people who are incredibly likeable with excellent social awareness who are pretty useless at communication, and some absolute assholes and eccentric, mildly awkward oddballs who can give a killer presentation.)
- You really, really like to solve problems
Many people make the mistake of thinking that the main purpose of a business is to make money for its shareholders, since that is the prevailing mode of thought of most economists, CEOs and Business School Professors. But this style of thinking can be dangerous for entrepreneurs, as it can lead them to become overly profit-focussed and forget that the long term goal of any business is to solve problems and provide value to its customers.
Do that, and the profits will come.
If you don’t like solving problems for people, then you won’t enjoy being an entrepreneur.
- You’re open-minded – about people and concepts
Many middle/upper middle class, over-educated people live in a bubble. They have spent their entire lives around on a certain type of person – people like them. Even top business schools, which are fantastically diverse in terms of nationality and work background, are rather narrow in that regard and are made up predominantly of students from elite or relatively elite class backgrounds.
The danger here is that such people can be guilty of intellectual snobbery and not always recognise diverse skills in others because they didn’t go to the right school, work at the right company or have the right accent. Talented entrepreneurs are open-minded, non-snobby and recognise that there are many ways to be smart. This allows them to recognise skills in individuals that others may not, and to find people who can bring to their business what it truly needs (which may well be that self-taught branding wizard with tattoos and a strong Glaswegian accent, and not another clean-cut 27-year-old dude from Deloitte).
The other danger is that many educated middle-class types, upon completing university, go straight into a graduate program at a large corporation. Such places tend to be rather process-oriented and are not exactly known to be hotbeds of innovation or maverick thinking, and can therefore squash the originality and openness out of young people. A good entrepreneur is open to new methods, processes, approaches and angles of thinking. Can you throw out the rule-book?
- You’re self-aware and honest
From my own experience, I would consider a lack of self-awareness to be one of the most major risks to those starting a business when young (i.e. in the mid or early 20s). When I started my first, I was just 23 – and like most 23 year olds, I really didn’t have much of a clue what I was good or bad at. This meant that not only was I unable to work to my strengths, I was also unable to get the resources (ie. training, mentoring or outsourcing) in place to mitigate my weaknesses. Like many young entrepreneurs, I also never really seriously considered what would happen if my business failed.
Good entrepreneurs and good leaders are self-aware and honest with themselves. They acknowledge and are comfortable with both their strengths and weaknesses. They are not afraid to make collaborative decisions and are able to take their egos out of the equation seek external expertise when required. My take is that it’s totally OK to suck at a few things – so long as you know that you suck at them. Admitting a weakness doesn’t make you “insecure” or “negative”, and its high time we stop acting like it does. You must be able to drop your ego, for the good of your business.
Being in entrepreneurship lays it all bare – it’s like the tide going out on your work life, and it will become incredibly obvious if you’ve been swimming naked. Whatever you don’t know about your skills, or whatever you’ve been bluffing about to yourself or others, is about to be quickly and painfully revealed. If you deeply and genuinely know yourself, then you’re in a great place to begin your entrepreneurial journey. If you’re still not quite sure of your true strengths, weaknesses or the type of environment you work best in, then you may want to wait.
- You have a genuine, long-term interest in your topic, product or industry
Owning and growing a business is a marathon, not a sprint, so you really need to have an enduring and genuine passion and interest for whatever area you’re starting a business in. This is especially prevalent advice to those in their mid or early 20s, whose personalities and interests are still developing.
People tend to underestimate the amount of self-motivation and drive required to be an entrepreneur – particularly in the early days when the team is small and you’re not making any money. When times get tough, it is so easy to run out of steam and allow procrastination and distraction to set in. It is therefore critical to be so deeply passionate about your company, interest and mission that this does not happen.
- You have kids
Many would be a little shocked to see this in the “good reasons” column (especially in a piece written by a woman who has little interest in having children herself). Entrepreneurship is risky – shouldn’t parents pursue a stable career so that they can be sure to provide for their kids?
Maybe. But maybe not. Modern careers, especially well-paying ones, are incredibly hard on parents. They are especially hard on women, who tend to see a serious slash to their earnings after having children. Starting a business to allow you more flexibility in your working hours and to be a more present parent is a great reason. Just make sure it is the right kind of businesses – mine involved a fair amount of travel and vast amounts of evening networking, which I definitely could not have done if I had a child. It was hard enough with dogs.
- You’re credible, experienced and well-connected
When I was 25, I started my second business – in a country and city that was vastly different to my own, where I knew almost no one. I did know the industry reasonably well, but I had zero connections where I needed them. The result? It was a massive uphill battle. I had to network my ass off, for years.
It always surprises me how many people start businesses in things they aren’t particularly well-connected in, do not have deep expertise in, or have little true credibility in (this is especially common in Fintech, where there seems to be a glut of inexperienced 20-somethings thinking that they have the experience and clout required to manage large amounts of people’s cash).
If you’re looking to raise significant amounts of financing, you will find it a lot easier if you have a proven track record of performance at a respected and reputable organisation. Despite how it may appear, VCs really do not like to throw money at people who do not have a strong and well-established career history – and unfortunately this is still especially the case for anyone who is not an upper or middle-class white (or maybe Asian) male.
I understand that not everyone wants to raise equity financing and that many entrepreneurs do not have the luxury of being able to attend a top university or enter a prestigious graduate program. But even if you don’t plan to fundraise, you still really need to know what you’re doing. Remember the start-up I worked at right out of university? It was in the apparel industry, and initially did well because it had little in the way of overheads and was offering an incredibly cheap product that was new to the market. But as time went on, the cracks started to show – because the founders had almost zero expertise in or true understanding of the industry they were in. Once better informed, better financed competitors started to appear, they were toast.
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Some people may think that I have set the requirements for starting a business impossibly high. Surely, no one meets all of these criteria? If everyone thinking of starting a business had to tick all of these ten boxes, we’d have almost no entrepreneurs at all!
Indeed. No, you do not need to satisfy all of these reasons to become a great entrepreneur to run an amazing business. But I do believe you need to have a decent number of them, and above all, should become an entrepreneur for the right reasons.
The eagle-eyed will notice that I left the possession of an MBA off this list. Are MBAs useful for aspiring entrepreneurs, or not? Is having an MBA a good or a bad reason to want to become an entrepreneur? I will discuss this in a future post.
About the author:
Isabella is a 2020 MBA from Scotland. She studied Natural Sciences and Chemistry for her undergraduate and masters degrees at Cambridge, before owning womenswear, menswear, events and import-export businesses in London and the Middle East. She will be taking up a post-MBA offer at a top 3 global management consulting firm.