Written by Dawn Starks of Starks Financial Group (April 2017)
Do you have what it takes to be an entrepreneur? It’s a finesse thing, really.
So you think you want to run your own business? You are clearly an expert at your craft, so going out on your own is a no-brainer, right? This is where too many folks with a dream go awry. Clearly, being good, being great, and being the most awesome at what you do is a prerequisite for taking your act solo. But there are many other elements that need to be cultivated to assure that your self-employment dreams can be made reality.
As an entrepreneur for the past eighteen years, I can tell you with authority that perseverance is the single most important characteristic needed to succeed in running your own business. There will be many ups and downs as you launch your venture, so having an iron will is a must. Bankers will tell you “no”; customers will tell you “no”; and your loved ones will tell you “no.” You must have the fortitude to continue moving forward against the tide. Belief in yourself is part of the perseverance equation.
Some people, and I am one of them, are just hard-wired so that if you tell them, “You can’t possibly do that!” they will ignite the fire under themselves just to prove you wrong. If you are not that person, then you need to develop a deep and abiding faith in yourself. Believe that your product or service is worthy and marketable; believe that you have what it takes to make it to the end of the race; and learn to dismiss self-doubt. Those moments of doubt will creep in, and you will need to be strong to talk yourself off the ledge of quitting.
I have often said over the years that business owners who are practitioners need to be two people in one—you have to have the know-how of your profession, but you must also have the skills required to run a business.
The first year of any business is challenging, and I expected that. What I didn’t expect was to follow that with three straight down-market years. It took all I had to keep coming into the office day after day, finding the right words to assure clients that we would get through this together. I spent my days talking to clients and researching in my field, and I spent my evenings reading self-help books. Positive thinking is what pulled me through, to be blunt. I told myself it was doable, that I could make it through this with my team. I knew I was right; sticking it out through the market tumble was the best strategy. I created positive-statement mantras, which I chanted to myself every morning and every evening before bed. To this day, when the chips are down, I revert to my mantras, which have changed over time, but still get my head screwed back on straight.
You also have to have faith that all will be well—to the point of developing undying optimism. I don’t mean to say you have to become one of those, as I like to call them, “perpetually perky people.” But when things are not going all that well, optimism is going to help you get yourself out of bed in the morning to start anew to make things better. I am fond of saying to myself and to others, “Things happen for a reason.” It is not always immediately apparent why a certain thing happened, but with time, rest assured that you will know why. A key employee leaves? While this might be a shock, I bet if you put your mind to it for a bit, you will conclude that better things will come as a result.
Being a business owner is not for the faint of heart. Maintaining the discipline of optimism—and I assure you, it is a discipline—will help you through the rough patches. This is where bravery, another trait of successful entrepreneurs, comes in. My husband and I joke all the time because he really likes risky hobbies and activities. He enjoys the adrenalin rush the activity provides. I tell him that I get enough of an adrenalin high from my day-to-day work—I don’t need to pursue high-risk hobbies, too! There is inherent risk in being 100 percent responsible for making sure your employees get paid. To be a successful entrepreneur, you must be comfortable with risk. Not everyone is cut out for the job.
As those three down-market years were coming to an end, so was my cash flow. It was apparent that the best thing to do would be to lay off one of my team. Academically, I understood that to be the best course of action. However, my whole premise, my competitive advantage, if you will, was a high-service model of providing financial advice. Having a larger team to increase response time was crucial to that model. So I told myself to hang in there, give it another six months. Surely the market would recover, and therefore, so would revenues. I believed in myself; I believed in my concept; but the risk was real. Sticking it out paid off, in that the market did indeed turn around, and our high-touch service style won us a considerable amount of new business over the following year.
By now it might sound like I’m advocating for a “charge-ahead” sort of personality. “Be brave! Be persistent no matter what! Look on the sunny side of life!” But actually, discernment is also quite necessary. It is important to be brave and optimistic and to persevere. But all of those things need to be tempered appropriately. You must be able to judge whether your concept (the product or service you have to offer) is worth pursuing. If no one wants your product or no one needs your service, then all the optimism, bravery, and perseverance in the world is not going to make you successful.
It is a finesse thing, really. As negative feedback comes in, such as a bank refusing to loan you money for your project, you must consider the feedback seriously. Seek counsel with others if needed, but determine whether your continued perseverance is merited.
I lost count of the number of bankers that initially acted interested in my start-up, only to dash my hopes when they realized I had no big pot of money of my own to invest in the project. (Honestly, if I did, would I need a bank loan?) I had to meet each and every one of the rejections with a serious look at my plan. Was I crazy? Would my concept work? As it turns out, my faith in myself and my abilities, and my unbending belief that my concept was a good one, led me to press on. But I did revisit, and revisit, and revisit my plan to discern whether I was delusional or sane.
I also had to spend countless hours trying to woo bankers to help my fledgling company. It should go without saying that, ideally speaking, an entrepreneur will have money to infuse into the project to get it going. As I mentioned, though, that was not my case, so to be honest, it was both a time-consuming process and demoralizing. But if you don’t have money for your project, be prepared to do what needs to be done to procure the investment you require to get your business started.
For me, this meant spending hours I did not have talking to everyone I knew to find good bank connections. Once I had a lead, I had to call and introduce myself and set up a meeting. Every banker wanted to see the numbers, of course. So, I had to produce packets of information that included my financials, as well as my cash flow projections. I wrote and rewrote summaries of what my game plan was—exactly how was I going to generate more business? I spent a considerable amount of time trying to convince the local banks that supporting another local company made perfect sense for them. The banks saw risk—an undercapitalized project with no real collateral to fall back on. I saw my future successful firm.
What worked finally? Nothing really, no magic bullet. It was a simple matter of giving my spiel to enough bankers until one finally decided to take a chance on me. After that one success, I later had subsequent successes with a couple more banks in those early years. It helped to have a track record of never missing a payment on the first loan.
I have often said over the years that business owners who are practitioners need to be two people in one—you have to have the know-how of your profession, but you must also have the skills required to run a business. It is sometimes the case that people become expert in their craft and then make the logical conclusion that they should, naturally, be able to do it as “their own boss.” But when I learn that someone is considering entrepreneurship, I will chime in with the recommendation that they first gain some business skills. Fortunately, these skills can be easy to come by. College courses, online courses, books by the million—resources abound for gaining some proficiency with things like marketing, accounting, and management. The main point is not to assume that just because you can do your craft, you can run a business.
Ultimately, if you want to be in business for yourself, know that you can do it, but it is not easy. I sometimes think it takes a special kind of crazy gene to make people want to risk it all to see their “baby,” their pet project, come to life. You can learn what needs to be learned, so take heart—just go into your project with your eyes open, and find the places and the people that can help you develop the traits and skills you need. Then be sure to pay it forward to help others on the entrepreneurial path.
Certified Financial Planner™ practitioner and financial advisor at Starks Financial Group. Securities offered through Raymond James Financial Services, Inc. Member FINRA/SIPC.
The full article continues below. Click to open in fullscreen…