If you are thinking about starting a business, you first have to decide if you have what it takes to run a business. While there are many factors that determine whether a business succeeds or fails, your effectiveness as a business owner depends on the following skills:
Comfortable Making Decisions
As an entrepreneur, you will have to learn to make decisions – and quickly. Often, you have to do this with limited or incomplete information. If you find this terrifying, running a business is not for you. The good news is that you get better at making decisions over time, but right from the beginning, you will be confronted with daily issues that require you to make a decision. Your ability to gather as much information as you can, process the information and make a quick decision is going to be critical. If you fail at this, you will soon find yourself with layers of important issues that need your attention. That’s a recipe for disaster.
Another skill you are going to need is the ability to operate your business under a high level of uncertainty. Unknowns in business come in various forms. First, there is no guarantee your business is going to be successful. It may take years for you to gain traction or turn a profit. Second, there is no telling what your sales numbers are going to be. All you can do is forecast and work hard towards that goal. However, on any given day, whether you serve 2 or 20 customers is unknown. As an entrepreneur, you have to be able to live with that level of uncertainty and still get up each day and put in your very best.
High Risk Tolerance
Entrepreneurship by nature involves risk taking. The bigger the risk, the bigger the payoff. Conversely, taking big risks can also mean that when things go wrong, the consequences can be devastating. When I started GiftCardRescue.com, not only did I exhaust the little savings I had but also I maxed out six credit cards and cashed out my 401k. On top of that, I had to borrow money from friends and family to keep the business going. There was no guarantee the business was going to succeed but I was determined to go the distance and see what happens. While the prospect of having to pay back all that debt kept me up at night, I did not let that stop me. That is why it is often said that entrepreneurs are partly delusional. I think there is some truth to that. If you are uncomfortable putting everything on the line, you should probably keep your day job.
Ability to Wear Many Hats
When you start your business, you are going to have to play multiple key roles until you begin to hire people. During the early days of GiftCardRescue.com, I had to run the company by myself for a year, out of my basement. I had to take on the role of Business Development, Marketing, Customer Service Representative, Shipping Representative, Accountant, Blogger and Website Content Creator/Manager. Even when I finally moved out of the house and hired my first employee, I continued to play many of these roles, including being my own HR Manager and Janitor. You have to be ready and willing to step out of your comfort zone and learn new skills if you are doing to survive as an entrepreneur.
It is said that no battle plan survives contact with the enemy. Similarly, no business plan survives contact with the customer. Regardless of how careful you plan, the business you end up with is not going to be what you started with or had in mind. That is why being flexible is important. When you start your business, your first priority should be to get as much customer feedback as possible and make changes to your model accordingly. Your goal is to get to the point where you have a clearer picture of what your customers want and how much they are willing and able to pay. Refusing to change when the data is clearly telling you that is a sure way to kill your business.