Tough economic times have encouraged more and more people to try entrepreneurship as an alternative to traditional employment. There are positive aspects to this trend, but entrepreneurship must be approached with caution because this path is fraught with challenges.
One element necessary for success that is emphasized by experts is having a process by which to judge your own situation and your own temperament and then make a rational decision about whether this is a suitable option for you. An important resource for making this determination is described in a new book by Bill Murphy, Jr., titled “The Intelligent Entrepreneur,” which outlines the ten rules of successful entrepreneurship as follows:
- Make the commitment. Entrepreneurship can be learned but you have to be committed to the process of building something of your own, rather than just coming up with an idea. It will likely take several ideas, some of which will fail, before you can call yourself a successful entrepreneur.
- Find a problem, then solve it. Rather than finding a new idea first, begin by finding a problem. Problem solvers make successful entrepreneurs. Idea people are often dreamers who often do not enjoy the hard work of a solution in a specific time frame to make money.
- Think big. Think new. Think again. Make sure that your solution will scale up. Professional investors often look for business plans that can credibly project revenues of at least $20M within five years or they will not justify an investment.
- Develop a support network. Have a support team of people you know and trust. For example, an idea person and a problem solver make a great team. Successful entrepreneurs have to work well with many different kinds of people, whether they are partners, investors, employees, suppliers, or customers.
- Take personal responsibility. Entrepreneurship requires the ability to work well with others and, at the same time, the ability to make decisions on your own and to trust them. You have to be decisive, accept responsibility, and provide the vision. Often decisions have to be made quickly, and with very little hard data, so you need to have confidence in your instincts.
- Manage risk. Without risk, there can be no innovation. Not every idea can, or will, be successful. Fear of failure will kill innovation, but reckless disregard for risk will kill a business. The successful entrepreneur is able to find the balance between these two extremes.
- Learn to lead. In a startup, entrepreneurs have to do two things. First, they will drive the business creation process, and secondly, they will inspire everyone else. Thus, leaders must provide vision to rest of the team, to investors, and to customers through clear leadership and effective communication.
- Learn to sell. You cannot rely on customers to materialize once you have developed a product. Selling is a learned skill and takes effort, just like building a product. Everyone in your startup, especially the entrepreneur, needs to understand sales in order to effectively market your product.
- Persist, persevere, prevail. Experts have found that the prime cause of failure in business is quitting too soon. The successful entrepreneur does not give up too quickly and uses creativity to overcome personal, financial, and technical obstacles.
- Value time as your most important resource. Entrepreneurship is a lifestyle, not a job. Be prepared to make a long-term investment of your own time and resources. There are no quick fixes or easy solutions to making money. Learn to manage and balance your time because this is your best resource. Great entrepreneurs have a life outside of work and find time to give back.
The tips above from reporter Bill Murphy were compiled in his book based on three real-life success stories of Harvard graduates, all of whom proved the points by their failures as well as successes. He does not offer any magical solutions but these rules can shorten the learning curve and increase the success rate for every budding entrepreneur.