Be realistic with your entrepreneurial vision | Starting a business
I hear from our coaches that a number of you are either in the process of starting a business or have a goal to start a business.
Being an entrepreneur myself, and with one of our three target markets at WE being entrepreneurs, we’re clearly all for this!
But we want to ensure it’s the right thing for you. And if it is, we want to ensure you’re set up for success.
From the outside looking in, the entrepreneurial life can appear to be pretty amazing.
It could seem as though an entrepreneur’s life is filled with travel, parties, cool events and loads of publicity.
Don’t get me wrong, many of us do a lot of these things! However, only half of the real picture is ever displayed. What’s often unseen is the constant feeling of failing.
Or the stress that we won’t meet payroll, the nights of working all hours to meet a customer’s order or the horribly difficult conversations we sometimes have to have with customers or team members. Not to mention the stress running a company can put on your personal health and relationships.
If these were the photos we saw on Instagram, I strongly doubt as many of us would want to start the entrepreneurial journey!
All this being said, I still LOVE being an entrepreneur! I really do believe that business can be one of the greatest wealth creation tools. Plus, it’s extremely gratifying and has the potential to make the world a better place.
It’s not for everyone though, and if it’s not done right, it can end up crushing you both psychologically and financially.
I’ve put together a list of things to consider if you’re thinking about starting a business:
Get clear on your vision
No matter how good you may be, it’s near impossible to run a successful business without the help of others.
It’s the quality of your vision, and how well you articulate it, that’ll determine the quality of people you attract. Business is insanely challenging and there’ll be many times on your journey when you feel like quitting. At these times it’s your belief in your vision that’ll give you the energy to persevere.
Everything will take at least twice as long and cost double what you expect.
Unfortunately, nothing in business is as easy as you imagine.
Be prepared for many setbacks along the way that will cost you both time and money. It’s important you prepare yourself for this both financially and psychologically. This has been one of my greatest challenges as an entrepreneur. I can see my vision clearly and I’m constantly impatient the results don’t come quicker.
There’s really no such thing as passive income when it comes to business.
This is one of the biggest delusions I see from people desiring to get into business.
If it was this easy, everyone would be doing it. Of course, over time you can reduce your involvement by having really great people and providing them the financial resources, systems and processes to succeed. However, in all likelihood you’ll still need to be involved.
If you truly want to be a passive business owner then invest in the sharemarket as you truly won’t need to be involved at all. Even as a property owner you tend to need to do some work in order to get your desired returns.
Could you get your fix by being a great number two or an intrapreneur?
You can get nearly the same feeling and benefits as being a founder by finding another amazing founder and helping them achieve their vision.
The big upside here is your risk is dramatically reduced and you don’t have all the stress that comes with the responsibility of being a founder. If you don’t think you can get rich from this just look at all the millionaires who’ve come out of Silicon Valley. The majority weren’t founders.
If you have the right attitude you can also find a lot of amazing opportunities working in a big corporate. Treat your team or business function as your own business and practice with all the resources, but without the risk.
Test your idea first to see if someone will buy it.
You can have a great product or solution but if no one will buy it at a price that can be sustainably profitable, then you don’t have a viable business model.
You can start ‘selling’ before you’ve even created a product – you don’t need a fancy website or business cards to sell, just get out there! Get people to handover hard-earned cash to you before you quit your job and invest lots of time and money. Once you have validity you can then start investing more time and money.
Learn from others.
You’ll notice a lot of really successful people have had repeat successes. This is because you learn more each time you do something and you become better at it. Rather than making all the mistakes yourself, why not learn from other’s experiences. The best way to do this is to find mentors or get involved in communities of like-minded people.
Sarah and I have both been members of the Entrepreneurs Organisation (EO) for many years and have learned so much. I’ve recently been elected president of my chapter and Sarah is on the board of hers, giving us access to a global network of 15,000 successful entrepreneurs.
In the WE community we have many great entrepreneurs. It’s up to you to leverage these communities.
Finally, I believe one of the greatest things you can do to set yourself up for success is to get your finances in great shape first, then set limits on how much you’ll risk before you get started.
We’re inundated with stories of entrepreneurs who put everything on the line. They maxed out their credit cards, lived on ramen and went on to build a hugely successful company, however… what they don’t usually mention is that for every one of them there’re another 100 people out there who lost everything through this same strategy.
Finances are one of the biggest stresses in business (and relationships), so the more you can prepare, the better. A number of years ago I wrote a blog in SmartCompany that discussed this.
Back to School: WE Investment Philosophy Additional Principle 8: Focus on how your investments translate to your everyday life.
This one’s a biggy.
Before money, people would barter in order to get the goods and services they needed. Money was invented so the transferability of goods and services could become efficient. Ultimately, the only reason to have money is so you can purchase goods or services in the future.
By knowing exactly what the purpose of, or attaching a goal to, each investment you own will assist you in making better decisions – especially during periods of volatility.
One of the biggest mistakes we saw people make during the GFC was panicking and selling down investments that were, in fact, still meeting their income needs.
This knee jerk behaviour resulted in them solidifying both lost capital and lost investment income.
If a goal for an investment property you own is to produce additional income so you can reduce the amount of hours you need to work in 10 years time, you won’t care if the market drops in the next few years, as your focus is on rental returns rather than capital growth.
Don’t play the game of looking at your net wealth in one giant bucket. Instead, focus on how each investment has different characteristics, timeframes and associated risks, and match these to your goals.
Finn’s fun facts: Being a good budgeter and saver makes you more attractive to a significant other!
The Love & Money Study undertaken by Ally Bank revealed that more than half of Americans find a strong budgeting and saving strategy to be the most appealing money management trait in a significant other.
What’s interesting was this preference grew in direct proportion with the respondents’ age group.
Other attractive money management traits include those who pay-as-they-go to avoid any kind of debt (21%) and those who bargain-hunt and are thrifty (18%).
So Millennials, as we’re now getting older and either looking for our loved ones to commit, or looking for a loved one, perhaps the best thing you can do is to really optimise your finances and improve your money management traits… it seems you’ll become sexier! 😉
I recently read a fascinating book, Stealing Fire: How Silicon Valley, the Navy SEALs, and Maverick Scientists Are Revolutionizing the Way We Live and Work.
The authors spent four years researching the revolution occurring around the world of harnessing rare and controversial states of consciousness to solve critical challenges and outperform the competition.
Basically, trying to engineer peak states such as flow.
I’ve been on this personal journey myself for a number of years and I’ve tested and applied a number of the strategies they discuss.
Ultimately, my desire for this work is to improve my overall state of happiness (rather than out-performing my competition) but if this is a by-product then perhaps I’ll be happier anyway!
I’ve recently made changes in certain areas of my life through the knowledge I gathered from this profile. I’m already seeing positive benefits.
I strongly recommend you take the profile. It may help you get into more states of flow and achieve better results.
What I was really reminded of through doing this exercise is how we’re all individuals. As such we need to personalise our work environments in order to get the results we need.
As always, happy investing,
Disclaimer: all information contained within this article is of a general nature. Do not rely upon it when making financial decisions. Please consult a professional financial advisor or planner (like us!) before acting.