Taking the Entrepreneurial Leap
By Mitch Wienick, President
The Corporate America that existed in the 1980s through mid-2000s exists no more. Through the processes of rightsizing, downsizing, offshoring and adjusting to relentless economic pressures or outdated business models, corporations have terminated thousands of their former employees.
As a logical reaction to this phenomenon, people who once worked for corporations are starting businesses, buying businesses, or buying franchised businesses. Additionally, a thriving entrepreneurial community has sprung up, anchored in part by local universities, state government and a sophisticated venture capital infrastructure, and is available to help new businesses, too.
Compared to, say, 30 years ago, executives interested in a new career are better prepared to be their own bosses. Social media and online resources are part of this change, but people today have also worked in flattened organizations without the old hierarchies, support systems, and top-down management. They often had accountability in their corporate jobs and were frequently measured against performance goals. At Kelleher, we help our clients catalog and assess these accomplishments to determine what they are good at and what they are interested in as they consider pursuing a new entrepreneurial career.
Here are some questions to ask as you consider becoming an entrepreneur:
1. Have you built or helped grow a division or business either in a corporate setting or another environment? Did that work energize you? If you have a successful track record, investors are more likely to consider funding your new business.
2. Are you passionate about your idea? Do you think it solves a real problem or substantially improves upon an existing product or service? Creating a better product or service than what’s already out there helps you sell your idea to others. Investing your own money in the business will help even more.
3. Are you able to clearly summarize your idea and your business model in one or two pages? You must be able to describe it in what’s known as an elevator pitch, stating in simple, persuasive terms your business strategy and why it’s necessary and different from what already exists.
4. Are you able to take the time to objectively test the product with a range of people to get an early read on it? A key to long-term success is to find a way — through market research or crowdsourcing, perhaps — to test, secure feedback and refine the product or service.
5. Are you a hands-on type of person who is able to handle multiple jobs while the business goes through growing pains its initial years? Having multi tasking skills is the price of entry to the entrepreneurial life.
6. Are you resilient? When setbacks and disappointments inevitably occur, are you able to learn and snap back from them? Entrepreneurship is not for the timid. It requires persistence and flexibility. It means adjusting to new conditions, changing course if necessary, and sometimes starting all over with a new idea.
7. Can you carefully manage cash? Specifically, you need to collect early, pay late, secure and manage a bank line of credit and loan covenants, negotiate customer and supplier payment terms as well as space and equipment leases. The terms DSO and DPO will become as familiar to you as your initials.
If you decide to take the entrepreneurial leap, talk to others who have successfully done so. Find yourself a set of advisers or business coaches. These might be people who know something about the particular marketplace or about a key challenge you will be facing. Read articles (Innovation Online is a good source) and books (The Hard Thing about Hard Things: Building a Business When There Are No Easy Answers by Ben Horowitz is a good start).
As we have frequently seen through our clients at Kelleher Associates, the most successful entrepreneurs identify mentors at all stages of startup and company growth, regularly tapping these experts for outside advice to help them get better and better at developing their new business