Business and Finance Site

There’s certainly no shortage of people wanting to start their own business, and even more so in today’s economy. There have always been a certain group of people that wanted to “go out on their own” and be their own boss. In good economic times or bad, this group should be considered the Core Entrepreneur. They have a certain passion and fire in their belly that propels them forward, and for them, owning their own business is the only possible outcome–they simply refuse to work for someone else. In fact, as the saying goes, they work 80 hours per week to avoid a 40-hour per work job.

Interestingly, as the economy worsened, and as the social “contract” with large corporations disappeared, a new class emerged of “reluctant” Entrepreneurs who have been forced to conclude that they now want to own their own business. They might have snubbed their noses at it before, from the comfort and status of their prestigious corporate jobs, but now that they are unemployed with no remaining severance package, they have become more enthusiastic about going out on their own and starting a business.

Well guess what? Starting a new business is awesome! In fact, it’s more than awesome. It could be considered one of the great adventures of a lifetime. Perhaps a part of the American Dream. But just because it’s awesome doesn’t mean it’s easy, and it doesn’t mean the business will succeed. Take it from me–someone who has “been there and done that”–just because you want to be an Entrepreneur and start your own business doesn’t mean you should, and if you do, then there are certain rules that must be obeyed.

One of my favorite sayings is that “Just because you want to be an Entrepreneur doesn’t free you from the laws of business.” You are subject to the same laws of supply and demand, of economics and pricing, etc. as the big companies. It’s funny (not in a laughing sort of way), but I’ve met so many would-be or aspiring Entrepreneurs who believe that because they are so passionate about what they want to do, they simply cannot fail. Many of them have a framed print on their wall that usually depicts some inspiring image like a bald eagle, or a ship at sea, and the caption: “Belief fuels passion, and passion rarely fails.”

Well guess what? Passion does fail. Let me be very clear–passion is a wonderful human emotion: it drives us, and fuels us, and has been the cause of many great accomplishments throughout history. But passion DOES NOT make a business successful. It can be a great catalyst or enabler of business success, but in and of itself, it does not guarantee success. I’ve met many Entrepreneurs who bring the most incredible energy, passion, and enthusiasm to their endeavors. They believe they can overcome any obstacle through the shear strength of their will. All impressive beliefs, but these same Entrepreneurs didn’t last long in business.

So what does make a business successful, and why do so many businesses fail in the first 12 months of existence? While there certainly isn’t one magical thing that you can do to guarantee that your business will succeed, there are many things you could do (or not do) to virtually ensure your business will fail.

The number one thing you can do to ensure that your business has a chance to succeed is to start with a solid strategic framework, or foundation. Many would-be Entrepreneurs believe that I’m talking about a business plan. Sadly, most Entrepreneurs do not have a written (let along well thought out) business plan. And while I believe business plans are critically important, the strategic foundation I’m talking about here should happen BEFORE the business plan. In other words, this work needs to be done FIRST.

So many Entrepreneurs get an exciting idea in their head, and they immediately start executing against this idea. They conclude that because they like their idea, that it must be a great idea, and that everyone will like it and pay for it. But they are skipping the most critical strategic steps in the process–steps that are tried and true and established as the best practices of the biggest and most successful companies in the world. And that is, to evaluate the idea within an established framework that determines:

Who is the Target Customer for this idea? What problem is being solved and what unmet need is being addressed by this idea, specifically for the Target Customer? Testing the idea as a concept with the Target Customer to determine viability of the idea.

For some, just identifying these 3 steps is enough to get them to change their thinking and get them heading in the right direction. Others may need a bit more help and guidance, and I’ll write more about each specific step later. Of course that are many other steps to do, and this short article can’t address them all, but the bottom line is that these steps form the foundation of a strategic framework from which a successful business can be developed that can minimize the risks of failure.

Tags: American Dream, Aspiring Entrepreneurs, Boss, Business Startup, Economic Times, Entrepreneur, Favorite Sayings, Great Adventures, Large Corporations, Laws Of Supply And Demand, Lifetime, New Businesses, Noses, Passion, Severance Package, Social Contract, Start Your Own Business, Starting A New Business, Supply And Demand, Work Job