You see now that starting a business “ain’t easy.”
I want to complete that point by presenting some of the myths about entrepreneurship that will lead you to failure if you believe them.
Entrepreneurs are Natural Born Risk Takers
Athletes maybe. Musicians too.
But the prime motivation is usually to become your own boss. Or because of a passion, or you want to “take this job and shove it.” Those reasons are okay, but not good by themselves. Good places to start but you must know the truth about the challenges you’re taking on and learn what it really takes to be successful. Your primary role is to avoid risk, not take it. It’s an adventure, but you’re no adventurer. This is not a reality game. Failure really hurts.
All You Need is a Good Idea
There’s some truth in the need of a good idea, but that’s not all. Not even the most important factor. My socially responsible, self-managed, profit-sharing (SSP) business model is a great and disruptive idea, but to prove the potential I have to get it done. I’ve spent three years dreaming, thinking, planning and doing my homework and I’m still not ready to launch COWORKS Entrepreneurs™. In the meantime, I’ve learned and made my mistakes before I open my doors.
Entrepreneurship Will Set You Free
Wrong. Entrepreneurship is not 9 to 5. Being your own boss requires 24/7. Your dreams will even follow you to bed at night and trouble you while you sleep. What you are free to do is either succeed or make costly mistakes. You have the freedom to fail. You will be making great sacrifices through startup and more. I repeat: “Entrepreneurship Ain’t Easy.”
You Will Become Wealthy
You have the opportunity. Buy there’s no guarantee. Entrepreneurship is no fast track to wealth. The opportunity is there, but the road is long and hard. But worth the effort and if you do it right, you can take it as far as you want to go.
Some companies get rich quick but most need to pace themselves or they will grow too fast and go down like a shooting star.
Only Money Motivates People
If people today are filled with money-grubbing “ greed it is mostly because of the upside down economy we live in. Deep down most people care about their work and are frustrated because they are in the money trap. In your socially responsible company where they own their own work and earn a fair share of the profits, they will be motivated just as you are.
Pass or Fail Depends on Luck
The media loves the stories about startups that hit it big. Sometimes the story goes viral. On the other hand, they love statistics that show too many startups fail. Truth is they failed because of the unexpected. What about success? Often overlooked. Entrepreneurs need to have a good strategy, tactics and patience to succeed. A startup isn’t a lottery. It’s an investment of your six capitals.
Responsibility Lies with the Entrepreneur
That idea can kill you as well as your business. DIY is fine but no one is a know-it-all and you need to reach out to as many as you can for help. Especially those who are engaged in your enterprise. Teamwork is the byword for today’s businesses, large and small. Your company will not have employees; it will have indie entrepreneurs who own their own work and share the responsibility with you and their co-workers. They will be inspired team members.
You Need an MBA
Poppycock. A background in business education would certainly be a plus, but experience and adult learning in advance of startup will suffice. Even MBA graduates have to relearn when they graduate from academia to real life. You are learning here in NME and you need to supplement it with a few business courses at the local community college if you don’t have the experience. Pick practical courses.
Quitting Is an Option
Maybe. But it’s a final decision. If it turns out your strategies and tactics aren’t working as you planned, you need to recognize them quickly and take action to change them. Don’t just “stick it out.” Take action. Some young enterprises morph through several stages before they finally find the right formula. A plan for what you do in the face of adversity is a great strategy. Entrepreneurship “ain’t easy.” Success doesn’t come easily.
The Good News: Startups on the Rise
There has never been a shortage of small business entrepreneurs in the U.S. even during periods of economic crisis. Whether they are brick and mortar or e-commerce enterprises, more open than close every day.
Startups created annually in the decade starting before the financial crisis of 2007 and 2008 averaged 670,000 per year, reaching a high of more than 715,000 in 2006. Then dropped dramatically during the crises that followed, reaching a low in 2010 of 560,000.
While small businesses together is the largest of the job creators in America, they were left to suffer while Big Government bailed out Big Business to rescue the banks and the Wall Street economy. During the “recession” years, small business jobs declined by 60 percent due to tight money and a drop in consumer spending. Meanwhile, the banks and the Bigs profited by the crisis they created.
But that’s history.
Entrepreneurship rates in the first quarter of 2018 neared peak levels during the recession, according to research by Paychex, a provider of integrated human capital management solutions for payroll, HR, retirement, and insurance services.
Their research shows that the rate of entrepreneurship grew steadily for several years following the recession in 2009, moderated from 2014 to 2016, and then started to accelerate again last year, nearly reaching its highest level since the recession in the first quarter of 2018. Additionally, the rate of small business failures has consistently trended lower since the start of 2014.
Entrepreneurs could always use government help, but it’s clear they can weather the storms without it. Even contribute real growth to the economy.
The report shows that today’s business owners are positive about the business environment. Nearly two-thirds (64 percent) are optimistic or very optimistic about their business’ ability to make a profit; and 58 percent are optimistic or very optimistic about their business’ prospects for growth.
Here’s a compilation of small business statistics to give you an idea of the current positive trends.
- Over 99% of U.S. employers are small business owners. (Cision)
- Small businesses in the U.S. employ 57 million people. (StartBlox)
- About 543,000 new businesses are started each month. (Yahoo)
- Popular industries for startups in 2018 included healthcare, e-commerce, technology, marijuana and maintenance. (LendEDU)
- Over 50% of small businesses have a chief financial officer. (WSJ)
- The average amount of a startup’s capital is $10,000. (Digital)
- There are 9.9 million women-owned businesses in the U.S. and 14.8 million male-owned businesses. (StartBox)
- Business owners with student debt have smaller ventures. But they have them. (SBA)
- 69% of entrepreneurs in the U.S. start their business at home. (Small Business Trends)
- Having two founders increases the odds of success for a small business as opposed to having one. (INC)
- 82% of startup funds come from the entrepreneur, or family and friends. (Small Business Trends)
- 54% of small business owners worry about finding hires with great talent.
- 70-80% of people research a small business before visiting or making a purchase from them. (Salesforce)
- Social media is the leading tactic in a small business marketing strategy. (Stratista)
- 83% of small business owners with a website feel a competitive advantage to those without one.
- 89% of small business owners believe using search engine optimization is the most effective digital marketing strategy. (GoDaddy)
G2 Learning Hub, a leading provider of integrated human capital management solutions for payroll, HR, retirement, and insurance services, showed even better prospects for 2019.
“With corporate profitability at its highest in four years, favorable GDP growth, consumer spending up year over year, and the percentage of investment as part of the economy back to pre-2008 levels, the US economy in 2018 continued to go strong after a thriving 2017. Small business owner confidence has increased over the year in this lucrative environment, and interesting new challenges have cropped up.”
“Most of us love supporting a small business,” they wrote. “Especially when they’re owned by our family and friends or people we know.”
Franchising Improves the Odds
While writing the class essays for NME, I have become more and more convinced that most entrepreneurs have more in their hands than they can manage. Combined with the lack of the six capitals — especially knowledge, financial and human capital— is behind the high failure rate.
Franchisees have the support it takes to win.
In 2017, the chief executive of the National Retail Association (NRA) compared the failure rates of franchises and independent enterprises, telling Money Magazine that franchises have an 80 percent success rate.
A year later, Janine Allis, an investor in Australia, was quoting statistics that 90 percent of franchises are successful compared to 40 to 45 percent for a typical independent small business.
There is no question that a franchise is a safer and more fully prepared enterprise.
It was these and other statistics that led me to develop COWORK Entrepreneurs to prove the socially responsible, self-managed, profit-sharing (SSP) business model by launching a pilot project.
Then using franchising as a means of assembling a team of top professionals to spread my innovative management model by helping the most promising indie entrepreneurs through startup and beyond.
You will find COWORK Entrepreneurs in the Blue Zone.
You can use the strategies and tactics you find there to start your company DIY. Or you can consider becoming a COWORK Entrepreneurs franchisee. The Green Zone isn’t a sales pitch. It’s a how-to. If you can do it yourself, more power to-ya!
Please move on to the first essay in the Blue Zone
In the Blue Zone, the Sky’s the Limit