Make sure you have what it takes to start a business
ENTREPRENEURSHIP and in particular small, owner-operated businesses have always been a driving force in our economy. Manitoba for instance, thrives on thousands of small businesses, many of them family owned. Yet at the same time, entrepreneurship seems to ebb and flow with the economy. For instance, when job loss is high and job opportunities are seemingly limited, selfemployment rises. This phenomenon has borne itself out again with the recent announcement that Canada’s economy lost 55,000 jobs in March 2013, while the number of self-employed people increased by 39,000.
I recognize that many people who are suddenly laid off have been dreaming of starting their own business for quite some time. Perhaps the opportunity to invest a severance package was just what they needed. Others of course, start up their business as a last resort after a frustrating and lengthy job search and/or after experiencing general frustration in their career.
Self-employment and/or entrepreneurship certainly weren’t on my mind when I started my consulting business many years ago. I was terribly frustrated in my education career and later while consulting with large, national service firms, I felt I didn’t have control over my career. I, too, turned to self-employment in order to find job satisfaction.
Being a small business owner is very satisfying and rewarding. It’s multifaceted, fast paced and challenging. You meet hundreds of people, work on a multitude of different projects and have an opportunity to develop a very broad spectrum of friends, acquaintances and, of course, customers.
However, starting a new business in today’s global economy is indeed challenging. After all, the financial markets are still fluctuating, some industry sectors are scrambling for talented staff, money is tight and technology is becoming outdated at lightening speeds. Not only that, customers are more demanding than before and with access to the Internet, competition is no longer simply our local market. As you can expect, newly established entrepreneurs often struggle for a long period of time.
One alternative to starting a new business is to take over an established business and with current statistics suggesting 60 per cent of small business owners are over the age of 50, it seems there should be plenty of opportunity.
Locating business opportunities might be harder than you think because most entrepreneurs are not overly eager to advertise their interest in selling. One of your best bets is to start your search by approaching commercial lawyers, commercial loans officers and/or get a referral to a partner in an accounting firm. Another source is to seek out a well-known business broker.
Once you have an opportunity in hand, you need to do a series of due diligence activities. Be sure to involve your lawyers, accountants and business advisers to examine all aspects of your potential purchase. Unfortunately, many business purchasers neglect to examine the current and potential human resource issues that can arise. For instance, if the owner will be leaving, how many staff could remain that have the expertise you need to continue? What are the age demographics and skill levels? Will the skills meet your future needs? How open might the current employees be to the potential changes you will be implementing? Are the employees considered high performers? Finally, how will you manage the transition of the employees you wish to stay with your new organization?
Starting a new business and/or purchasing an established enterprise require a good deal of personal stamina, courage and persistence in order to succeed. Review this brief list and determine if you have what it takes.
Affinity for your business sector — success requires that an individual have a personal attachment to the product, the business sector and/or a process. For instance, if you don’t like golf, don’t buy a golfrelated business!
Passion and planning — many entrepreneurial oriented individuals are more dreamers than planners. If you are more of a visionary, then get yourself a business partner who can help to implement your dreams. Passion by itself is not enough.
Strong customer focus — business relies on customers for success. Are you prepared to get to know your customers inside and out, to reach out to them rather than wait for people to come to you?
Persistent problem solving — successful entrepreneurs are never rattled when confronted by unexpected problems. If you lack this important “never give up” attitude, then entrepreneurship may not be for you.
Forget about being modest — our parents taught us to be modest; however, if you want to be an entrepreneur, you need to get out there and aggressively market yourself and your business.
Self-awareness — before engaging in any entrepreneurial activity, individuals must truly understand themselves and their strength of character. Do you have the energy it will take to be successful? Do you have a positive attitude that will take you through the peaks and valleys you’ll encounter? Do you have the ability to assess change and take advantage of opportunities quickly? These personality elements are critical to success.
Source: Canada’s Small and Medium sized Business Owners: Diverse Society in Microcosm. TD Bank, October 2012 Canada loses 54,500 jobs in March Jobless rate ticks higher to 7.2% as private-sector hiring slumps, CBC online news April 5, 2013.