Risk, Reward, and Entrepreneurship

Starting Your Own Business?

By Bright Lokenge

Understanding your attitude towards risk and reward is essential for a happy life as an entrepreneur. What's your tolerance for risk versus reward? For all the talk about the high salaries of Ministers, Directors and corporate CEOs, the reality is that most millionaires are self-employed professionals or entrepreneurs. Have you ever wondered why most former ministers, directors and parastatal managers look battered, haggard, grey and miraculously seem penniless after leaving office? With the exception of fraud, corruption and outright thievery or winning a lottery, you can only make money by investing money, ceteris paribus! And to make money through successful entrepreneurship, you need to be a little crazy, and be ready to take risks.

Thinking of starting a business? You’re on the right track. There’s a lot of thinking to be done before you start your own business. Starting a business is one of those huge, life-altering events. Think of it as a marriage; running a successful business takes the same depth of commitment and desire. As in a marriage, you’re going to be living with your business 24 hours a day, 365 days a year. Like any relationship, if you want your business to be successful, you’re going to have to work at it. And it’s going to have its ups and downs and surprises. But on the positive side, if you’re the right person with a solid plan, starting your own business can be the most satisfying, exhilarating experience of your life.

Examine Your Heart

The first step is to examine whether or not starting a business is right for you….not your neighbour, friend, co-worker, or whoever else is trying to tell you that you should start your own business. The main quality that you have to have to start your own business is a burning desire to do it.

Running a business isn’t for the ambivalent or indifferent. You have to really, really want to be your own boss, transform your dream into reality, or market your product or service. Look inside yourself and ask these three basic questions before you start your own business: (i) Do you really want to operate independently and be the person making all the decisions and shouldering all the responsibility? (ii) Are you willing to work hard and make the sacrifices starting a business entails? (iii) Do you have the self-confidence and self-discipline that will enable you to persevere and build your new enterprise into a success? If you’ve answered “no” to any of these, you’re probably not ready to start your own business. Overnight success stories are just mere fairy tales. The reality is that success is won through hard work over time. And, if you answered all three of these basic questions positively, then you're ready to think seriously about starting a business. The next question is: are you enough of an entrepreneur?

Entrepreneurial Qualities

There are certain traits and attitudes that make some people more suited to running a successful business than others. In one study where entrepreneurs were given a list of attributes and asked to rate their importance for success, the seven most highly ranked qualities were perseverance, the desire and willingness to take the initiative, competitiveness, self-reliance, a strong need to achieve, self-confidence, and good physical health. None of these are particularly surprising; you’d expect a person who was a successful entrepreneur to be self-reliant and self-confident. The qualities that the same group of entrepreneurs ranked as least necessary for success may surprise you, though; a strong desire for money, patience, being well organized, and having a need for power all ranked at the bottom of the list. Being a successful businessperson, the underlying assumption is that you need to have a sufficient number of “entrepreneurial qualities.” What are the abilities you need to succeed when you start your own business?

Abilities You Need To Start Your Own Business

The ‘Six Success Factors’ for starting a business are self-motivation, business and industry knowledge, organization and management capabilities, marketing skill, customer/vendor relations, and vision. Your skills and inherent business wit will ensure winnings over risks, bureaucratic red-tapes and taxes. Business and industry knowledge should be near the top of anyone's list of requirements for business success. After all, how many lawn tennis rackets are you going to sell if you don’t know anything about the products or the sport? You can acquire this knowledge through trial and error when you start your own business, but you will probably have to declare bankruptcy before you learn all you need to know.

My theory is that lack of knowledge is one of the prime reasons so many new business fail. While entrepreneurs themselves didn’t rate being well organized highly, it’s logical that organizational and management abilities are also absolute necessities for business success. People keen to start their own businesses sometimes forget about the managerial and administrative skills necessary to run a business; if you're going to start a successful business, you need to have or develop expertise in money management, managing people, directing business operations, and directing sales and marketing operations.

What are the other abilities you’ll absolutely need if you're going to start your own business? When twenty-one Award-winning Distinguished Entrepreneurs were questioned about the principal reasons for their success, only three abilities were mentioned by all twenty-one; (i) responding positively to all challenges and learning from mistakes, (ii) taking personal initiative, and (iii) having great perseverance All three of these behaviours can be learned! Investing the time to learn the skills you need before you start your own business is especially wise because once you've decided to put so much energy into starting a business, you're going to want it to develop into a viable, thriving enterprise. Sadly, there's a large percentage of businesses started in Cameroon that survive less than two years.

Avoiding Business Failure

Most businesses fail because of weak general management, weak financial management, or weak marketing capabilities. Preparation and planning are key. If you've decided that starting a business is right for you, the next step of preparation is to decide what kind of business you want to start, and begin working on your business plan.

What do you really want to do and why do you want to do it? “Do what you love” is still sound advice; having a passion for what you do will fuel your commitment and give you the energy you need for the long haul. Thinking of starting a business? What is your “burning desire” and how can you shape it into a reality that will provide you with both satisfaction and a profit? That’s really the only question you have to answer to start your own business.

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