There is huge publicity for successful entrepreneurs. There are lots of people who have aspirations to be an entrepreneur. Too often, however, people have equated starting a business, as being an entrepreneur. An entrepreneur is a very particular kind of individual. They are somebody who relentlessly wants to innovate and build new organisations: businesses, charity or social organisations. It’s a relatively small proportion of the population who are strongly oriented to being entrepreneurial. Let’s test whether being an entrepreneur is right for you.
1. You are too risk-averse
The classic entrepreneur is all in. They are prepared to risk everything for the goal they set themselves, often those risks are unacceptable to other people. They may risk all their wealth. They may risk their most important relationships. They may risk their health. They may risk their reputation. If those risks feel unacceptable to you, then being an entrepreneur will probably not Make Your Future Work.
2. You’re not good at building a team
There is the image of the solo entrepreneur who creates extraordinary success through the power of his own single minded efforts. This is, in most cases, a myth. The most successful entrepreneurs build around them a complementary team: a set of people who believe in the future the entrepreneur is painting. They are not the same as the entrepreneur who is leading. They must have a set of complementary skills and personalities. They need to become the team that, too often, the entrepreneur, is too impatient to build themselves. As the entrepreneur, you must first be able to attract and sustain the core team from which the wider team is built.
3. You struggle to find that brilliant new idea
Another myth about entrepreneurs is that they come up with an extraordinary new idea, which is going to change the world as we know it. This is certainly true in some cases: there is a particular kind of entrepreneur who comes up with extraordinary, world changing ideas. If you can’t come up with such ideas, you might believe that you’re not a suitable candidate for being an entrepreneur. The truth is that most of the power of successful entrepreneurs comes from excellent execution by commitment to continuous evolution. This means you need to bring small, incremental innovative ideas that will transform over time. Again and again, you see that second or third movers in a new market are the ones that are most successful. The fast followers have a different capability to execute. When you look at Richard Branson’s early success, it was not from inventing transatlantic air travel, but leading the development of one incremental improvement in execution after another which successfully challenged British Airways dominance of the route, despite British Airways innovation with supersonic passenger travel using Concorde.
4. You need a relentless commitment to getting the right things done
Yes, entrepreneurs are often lucky, but luck is not enough. You must get the right things done. You have to get these things done quicker, faster, cheaper, better than your competition. Finding the right way to get right things done, is critical for a successful entrepreneur. Sadly, there are too many people who think that a great idea and a great opportunity is enough to make them a successful entrepreneur. They will fail in their first 6 to 24 months of trading, simply because they haven’t got the right commitment to action.
5. Not sufficiently adaptable
The most successful entrepreneurs have a strong capacity to adapt. They are happy to let go of one treasured idea to pursue a better one. They’re happy to try multiple things, one after another in order to push through to success. They’re able to bounce back from failure, and go forward, once more. They’re able to hold in tension ideas that seem paradoxical. If you are insufficiently adaptable to changing circumstances, to setbacks and to disappointments, then you will not Make Your Future Work.
6. You have no capital to seed your entrepreneurial future
Most successful entrepreneurs have some capital with which to seed their entrepreneurial future. It’s not absolutely necessary for you to have capital to get started. There are certain businesses, which have a very low barrier to entry, where you can get started with minimal capital requirements. But for most people, unless you can afford to forgo salary for an extended period of time, unless you have got assets that you can mortgage like a home, unless you have friends and family, relational assets, that you can draw on to borrow money, or who will invest in your business, it is hugely difficult to build anything that has momentum.
7. You have no compelling business model
An entrepreneurial endeavour has to have, at its heart, a business model that has built in capacity to scale. Too often, I talk to people who believe they can create an extraordinary future with a business model, which has insufficient profitability to fuel growth. Sometimes your business model relies upon competing with existing major brands, without substantially differentiating so that you can charge a premium. If so then you’re going to struggle because you’re never going to have the economies of scale that the existing brands have. If you are seeking to create a premium product but the margins are so low that you are unable to market that product, effectively, then your business model will fail.
There are all sorts of reasons that a business model can fail. Of course, in the world of digital unicorns (businesses with valuations in excess of $1bn) many people believe that unprofitable businesses can continue to garner investment and ultimately win through. Sadly, there are relatively small number of ideas, where this will work. We have seen some very significant failures of businesses, where their business model relied upon their ability to, in effect, use shareholder funds to subsidise their adventures. The most recent one was, WeWork, who believed that by rebranding a serviced office company as a technology start-up, they could attract huge volumes of capital investment and operate at a continuing loss. It didn’t end well!
8. You are better suited to a smaller business
There is no shame in deciding that you want to build a business that is going to be limited in scale. To have ambition to build a business that employs 30 to 50 people, that generates profits of half million to a million a year, is no mean ambition. You may not be an entrepreneur, but you could be a successful leader of a small business. As a successful leader of a small business, you can, to some extent, contain some of the risks and make a valuable contribution to society. You can enjoy many of the benefits of freedom and joy from controlling your own destiny, without the extraordinary pressures to scale to huge size.
9. You have better things to do with your life
Maybe you’re an experienced professional, maybe you’re a great leader in a corporate setting, maybe your workstyle is designed to suit your lifestyle. These are all good reasons to accept that being an entrepreneur, will not Make Your Future Work. The personal, financial , relational, health risks and costs that I see entrepreneurs accept are not necessary, for most of us, to build a rewarding, sustainable and enjoyable workstyle.
10. There are great alternatives to being an entrepreneur
If you’re a senior professional and you want to step out of the corporate rat race, then there are some great alternatives to being an entrepreneur. You could step out and work in a smaller business. You could become an independent consultant. You could move towards an interim workstyle. You could become a non-executive director. All of these options have their drawbacks, but they are viable alternatives for hundreds of people. I would suggest the best alternative is to establish a portfolio executive workstyle.
With programmes like Dragon’s Den and the constant lionising of individuals such as Richard Branson and Elon Musk, more and more young people aspire to be entrepreneurs. Increasingly, people over 50 are looking to redefine their working life as entrepreneurs. But to my definition of entrepreneurs, most of us are not ever going to be successful entrepreneurs. Most of us don’t want to go through the pain of failure, take on the personal costs and don’t have an attitude to risk that suits them to be an entrepreneur. But don’t give up your ambitions to have a different workstyle, there are lots of great alternatives. Check out http://2ndhalfcareer.com/ to find out more.
Charles McLachlan is the founder of FuturePerfect and on a mission to transform the future of work and business. The Portfolio Executive programme is a new initiative to help executives build a sustainable and impactful second-half-career. Creating an alternative future takes imagination, design, organisation and many other thinking skills. Charles is happy to lend them to you.