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Entrepreneurship and You.

Where are you coming from and going to?

WorkSavvy helps people with businesses like yours - to create sustainability from the startup.

"No enterprise can exist for itself alone. It ministers to some great need, it performs some great service, not for itself, but for others; or failing therein, it ceases to be profitable and ceases to exist." - Calvin Coolidge

What on this page?

Any of the entrepreneurs I have known do not ask themselves if they are cut out to be in business. They just go for it. When the going gets tough, they perhaps have moments of doubt, but they carry on through the turmoil.

If you have not yet reached the point of inevitably starting a business, you may find it helpful to read the four sections below: Is there an entrepreneur or entrepreneurship profile?—two dozen characteristics of people prone to take the plunge; Where are you coming from and going to? gets a bit more specific and challenges you to figure out your own route; What's the essence of enterprise? suggests some soul searching to do before embarking on the journey; The entrepreneur has foresight! sets out behaviours of successful entrepreneurs. What does a professor of entrepreneurship have to say? quotes a top professor of entrepreneurship at the #1 Entrepreneurship School.

If you want to read what others have to say, then a good way in is via the article on entrepreneurship in Wikipedia—the free encyclopedia.

Is there an entrepreneur or entrepreneurship profile?

Of course there have been studies of the profile of an entrepreneur or entrepreneurship. I don’t think there is any one that is conclusive. The is one characteristic of entrepreneurs that stands out: most entrepreneurs are driven to achieve and the achievement motivation¹generally comes out as having greater importance than affiliation or power (my scores on a test I took gave me scores of 66 on achievement, 41 on affiliation and 37 on power).

On the other hand, I consider that there are some favourable conditions that may be propitious for starting your own business and they can include being:

   1. a person who knows the sector already;
   2. someone who’s had business ideas rejected,
   3. an executive thwarted for promotion;
   4. a former entrepreneur;
   5. self-directed, almost a loner;
   6. never bored;
   7. highly committed to their business vision;
   8. attached to money as measurement;
   9. feels prosperous and knows money will flow from the business;
10. not solely motivated by money;
11. a manager who established a business unit of the employer’s company;
12. committed to giving before getting;
13. a problem-solver & resource investigator;
14. happy to get a lucky break, but doesn’t believe in luck;
15. in need of high personal autonomy;
16. a kid who did a paper round or baby-sitting;
17. someone who germinated the business idea as a student;
18. ready to make personal sacrifices & unlikely to wait for anyone;
19. the type who starts clubs or societies;
20. a jack of all trades, who knows where to get help;
21. a person who rolls up sleeves, while thinking strategy;
22. someone who works many ideas simultaneously,
23. an activist who got the rules changed;
24. someone who specifically sets out to get trained in a marketable subject;
25. an early retiree—at 55, there’s plenty of active life ahead,
26. in a hurry with a compulsive sense of urgency, though acknowledging time is relative.

None of these are necessary conditions, but a selection of them arevery likely to indicate someone who is going to go for it!

There is a view of the changing face of entrepreneurship (in the US) in the Intuit Future of Small Business Report. The Phase One report (January 2007) looks at who the entrepreneurs are and the factors driving them. Phase Two (June 2007) examines the technologies that will propel and transform the small business sector. Phase Three (due late 2007) explores how small businesses will affect society and the economy in 2017.

1. see The Achieving Society by David McClelland.

"Man needs, for his happiness, not only the enjoyment of this or that, but hope and enterprise and change." - Bertrand Russell

Money or Control?

Many people who observe entrepreneurs or anyone starting a business imagine that they are doing it because they want to be rich. This is generally too simplistic a view. The motivations are much more complex. However there is considerable business school research on motivations and entrepreneurship. Issues of money and control do both play important roles. Will you make as much money by keeping control of the equity in your business, or will you do better to seek extra outside funding that may mean giving up control. In my experience, I would say that either way, autonomy is very important to anyone starting a small business.

Make sure you think about your own position. It may help to look at the experience of others. One good place to start is Rich or Royal: What Do Founders Want?, a Q&A session about research by Naom Wasserman at the Harvard Business School.

Where are you coming from and going to?

You have your own starting point and know where you want to go.

The first issue to think about may be to decide if you are aiming at entrepreneurship or small business ownership (and this could be to be your own boss in a profession or craft/trade). Generally an entrepreneur will be aiming at innovation—in product, process, market or organisation. My personal view is that the entrepreneur seeks to build something independent of her/himself. Have a quick read of what Quick MBA has to say about entrepreneurship and the differences compared to small business. You might also want to try the Startup Business School from Fresh Tilled Soil. It'll help you easily and painlessly get into the mould.

It is good to take stock of where you are coming from and where you want to go. You will possibly save yourself a lot of heartache if you are honest with yourself - or be clearer about your motivation if you identify where the crazy idea has come from. Maybe you fall into one of the categories below:

you are an employee and want to start your own business because you can do it better
you want to turn your hobby into a small business because you could do it full-time
you have spotted a market niche and you want to fill it because you have the skills needed
you've invented a widget, believe it'll sell and like the idea of turning it into something of value
you want to run a business from home because you enjoy working on your own
you are not satisfied with what's on offer and believe there are many others like you
you have always wanted to build a business and now you have the opportunity
...fill in your own words...

SWOT it! You could go through this process of identification by doing a SWOT analysis. What's a SWOT analysis? It's devilishly simple and reveals a lot. It is a 2x2 grid tool that works well in the determination of strategy and the acronym stands for Strengths, Weaknesses, Opportunities, Threats. Mind Tools has a good description, too. You can use the tool on your own, but it often has greater power if you can do it in a group. If you do use a group make use of brainstorming to get the most creative ideas.

Strengths

list

Weaknesses

list

Opportunities

list

Threats

list

"Innovation is the specific tool of entrepreneurs, the means by which they exploit change as an opportunity for a different business or a different service." - Peter Drucker

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What's the essence of enterprise?

In the management literature you'll read all about corporate vision. And corporate vision statements. Should your business have one?

An enterprise must hold two things constant: its sense of purpose and its commitment to creating 'mutual advantage' for stakeholders (all those affected by the firm). My personal view is that an enterprise that is not committed to making a contribution to the world, is very likely to fail.

Here is a vision statement plucked at random from the Web: "Through our passion, provide .... services that are admired in the markets we serve by creating superior performance, profitability and relationships."

Fine words.

But, my experience tells me that the individual business creator will need to start in a different place: the essence of the enterprise.

Essence of the enterprise—what does that mean? It means for me the guts, the intent, the imperatives, the spirit that drives an individual to decide to set up in business in the first place. It's the essential stuff of the enterprise that it will need to live out in all it strives to do.

"54% of people in small companies (fewer than 50 employees) like their jobs a lot, vs. 44% in big companies (1,000 or more employees)." Business Week survey in 2007.

This essence of enterprise is not about pushing water uphill, as sometimes entrepreneurship seems to be. Your business is at risk if your don't bring good stuff into it.

Good stuff?

Yes, good stuff. Like seeing the potentiality of what you're doing. Like generosity, since the universe works through dynamic exchange. Like recognising the law of cause and effect. Like letting nature take its course and trusting. Like realising that your intent has the power of fulfillment built in. Like remaining open to uncertainty and serendipity. Like allowing your purpose to serve others. But don't neglect the essence of the enterprise – it's the essence of you!

Now you may want to take a look at First Steps to Business Startup or jump straight to my article, Before Your Startup—5 "A"s to Be More Successful - the means to prepare yourself mentally and emotionally for business startup.

"Business opportunities are like buses, there's always another one coming." - Richard Branson

The entrepreneur has foresight!

The entrepreneur...

envisions the future now, like a tennis player who sees his ace on the far side of the net, rather than focusing on the position of his feet behind the service line; can take a small idea and turn it into a significant revenue stream;
tolerates ambiguity, is open to uncertainty & change and hence, not blind to future difficulty;
on the other hand, is not dissuaded by negative feedback, and is dedicated to the validity and integrity of the business idea...
... with a passion for that idea, as well as having the ability to communicate the vision simply and strongly (in 25 words?).

... is predisposed to action

recognises that the first sale defines being in business;
knows that a delayed product launch is likely to result in more lost profit than cost overruns—the sooner a product is on sale, the sooner revenue and feedback flow—once you're burning cash, time is your enemy;
strategizes as a way of life, but avoids analysis paralysis;
values time—non-productive activity is kept to a minimum, and focuses on opportunity.

... experiences learning as a way of life

accepts process failures as good teachers while persistently pursuing goals - bootstrapping is normal;
puts experience to use and is endlessly curious, continually sucking up information;
is proactive in seeking better ways of doing business, avoiding more of the same
competes, often with self, to perceive what works—in the school of hard knocks (likes to work alone and yet be recognised for winning).

... is not a risk taker (contrary to popular belief)

calculates the downside and prepares potential remedies;
judges the value of things carefully;
starts small and avoids over-reaching (except where technology demands a certain size for viability);
considers both lowering the water as well as raising the bridge, e.g. seeks funding from up-front payment by customers or lower stocks, versus external capital investment (with all its obligations). See Bootstrapping: Thrifty is Nifty for more on this.

... and is able to put vision into practice

fixes clear goals for action and measurement;
avoids 'buts', staying focused on the vision;
builds strengths and knows the idea will work;
feels prosperous.

Here's another entrepreneur behaviour: 24/7/365. Know what I mean? An entrepreneur works on the business twenty-four hours a day, seven days a week, three hundred and sixty-five days a year. That's why you better love what you're doing! However, working does not mean beating your brains out or making yourself sick. You need to look after your spirit, avoid stress and maintain your body in a healthy way. It does mean focus.

There are many who think you can define what makes an entrepreneur by character traits. I feel that this is less useful than knowing what behaviors are typically displayed by entrepreneurs. In his book, The 7 Irrefutable Rules of Small Business Growth, Steven S Little describes "The 10 I's of Effective Growth Entrepreneurs": Industrious, Interconnected, Intrepid, Irreverent, Influential, Ingenious, Innovative, Improvisational, Indefatigable, Integrity.

Have a look at a Quiz for Small Business Success developed by the US Small Business Administration - if you like quizzes. The questions are challenging (I scored 93/100 - see how you do). The psychologist David McClelland who wrote extensively about Entrepreneurship considered entrepreneurs were highly motivated by achievement - see his book The Achieving Society. You could evaluate yourself by taking a quiz designed by him (link in an article in Wall Street Journal) and see where you fall on the achievement/affiliation/power dimensions (I come out: achievement 66; affiliation 41; power 37). There is another check on yourself that you could make by taking Les Hewitt's Level of Focus Quiz. This will help discover how focused you are. You can also try the Risk Assessment Quiz for Starting Your Own Business, by Georgia State University SBDC.

What does a professor of entrepreneurship have to say?

Here's what Jeffry Timmons of Babson College suggests:

Entrepreneurship is the ability to create and build something from practically nothing.
It is initiating, doing, achieving, and building an enterprise or organization, rather than just watching, analyzing, or describing one.
It is the knack for sensing an opportunity where others see chaos, contradiction, and confusion.
It is the ability to build a ‘founding team’ to complement your own skills and talents.
It is the know-how to find, marshal and control resources (often owned by others) and to make sure you don’t run out of money when you need it most.
Finally it is the willingness to take calculated risks, both personal and financial, and then do everything possible to get the odds in your favor.

Jeffry considers that sustainable success comes from an entrepreneurial process that is:

Opportunity-driven;
Driven by a lead entrepreneur and an entrepreneurial team;
Resource-parsimonious and creative;
Depends on the fit and balance among these factors;
Integrated and holistic.

—from Business Plans that Work, by Jeffry Timmons, Andrew Zacharakis and Stephen Spinelli, McGraw Hill, 2004, which I heartily recommend. Stephen Spinelli, but the way, is co-author of another book I'd recommend to you: Never Bet the Farm.

Resources: Books

Books on the subject of entrepreneurship in general will give you an uplift. If you agree, then here are some I suggest:

The Art of The Start: The Time-Tested, Battle-Hardened Guide for Anyone Starting Anything by Guy Kawasaki (of Garage Technology Ventures). This is a no-nonsense book from someone who's been there and says there are only five things an entrepreneur must accomplish: make meaning (make the world a better place), make mantra (make a mantra out of your meaning), get going (start by creating and delivering your product), define your business model (make it a sustainable one), weave a MAT (of Milestones, Assumptions and Tasks). Take a look at Guy's blog: it's good no-nonsense stuff, too. There are also useful resources the Garage website and though Garage invests in technology businesses, the advice applies more widely.

Growing a Business by Paul Hawken (another hardened entrepreneur and champion of Natural Capitalism & see his Road Map for Natural Capitalism, written with Amory and Hunter Lovins). Why am I suggesting a book published nearly 20 years ago? Because Paul Hawken was ahead of his time. He says, "To see the reward of commerce as money and the risk of commerce as failure is to see nothing at all. The bottom line is down where it belongs—at the bottom." He then goes on to show you many practical ways to create a sustainable business.

Investors in Your Backyard: How to Raise Business Capital From the People You Know, by Asheesh Advani. This book is a wise investment. I would regard it as essential reading for any startup however large or small. Asheesh is the founder of Circle Lending sets up and manages business loans by family and friends. It's packed with useful information and guidance on loans and equity as well as being written in a lively style, has case studies and comes with a CD with many of the documents needed for formalizing a loan.

Brewing up a Business: Adventures in Entrepreneurship is by Sam Calagione who says, "As an entrepreneur—as a person—you have to ask yourself what is your defining inmost thought. And then you have to do everything you can to express this belief to the people around you... There are as many different reasons, motivations, methods, and models for starting a business as there are businesses. The one major characteristic consistent in every successful business that survives long past its inception is an adherence to core values." Sam's honest and direct exemplification of his own philosophy shines through the pages of this book about his creation and development of Dogfish Head Brewery in Delaware. This is entrepreneurialism made manifest, not pontificated.

Startup Nation: Open for Business (the book of the website & radio show) by Jeff and Rich Sloan. The brothers give down-to-earth advice and debunk lots of myths about business startup. They talk candidly abut their own entrepreneurial journey. You may like to subscribe to their newsletter via their Web site; they write good snappy articles, too.

Entrepreneur's Toolkit: Tools and Techniques to Launch and Grow Your New Business by Richard Luecke (in the Harvard Business Essentials Series). This is a more studious book, as you might expect. It has very practical stuff on incorporation, angels and venture capitalists, cashing out and other topics.

Startups That Work: the 10 Critical Factors That Will Make or Break a New Company by Joel Kurtzmann. This is a research-based book - companies and investors (nearly a third of the book describes the 'Paths to Value' study). The book is probably most appropriate for larger/tech startups, but smaller fry will have a lot to learn.

The Startup Garden: How Growing a Business Grows You, by Tom Ehrenfeld. This is an excellent book that uses the metaphor of gardening to help you undertake entrepreneuring. Many approaches to setting up a business concentrate on the mechanics; this one focuses on the process and your part in it. Tom quotes one of my favorite poets, Mary Oliver: "One day you finally knew what you had to do, and began." Entrepreneurs simply havce no choice, but to start. He goes on from there and takes you by the hand and works with you on your own development, quite as much as on the development of your enterprise. The book is hard-nosed and practical and at the same time, takes the novice through the steps necessary to start and carry on your business—without condescension. The easiest way to get a copy of the Startup Garden is simply go to Paypal and send 15 dollars to Tom@startupgarden.com. He'll take care of the rest. If you have any questions, email him at that address. Also take a look at Tom's blog; it's well worth reading.

Resources: Articles

Here are some articles that tell entrepreneur's stories:

Economy Power: an 'Economy Model' Business, by William Keyser about a startup that lived its name, was sold and led to the founding of a family of firms, on the basis of a business model that worked.

The Coolest Little Startup in America, by Bo Burlingham telling the story of TerraCycle Plant Food, made by feeding premium organic waste to worms, whose poop is then liquefied into an organic plant food and bottled in used soda bottles.

The Coolest Small Company in America by Bo Burlingham tells of the Zingerman's Community of Businesses. Faced with the choice of changing the company or letting it stagnate, the partners came up with an ingenious strategy that allowed them to retain the best aspects of small-business life while enjoying the benefits and challenges of growth.

Resources: Web

Kauffman eVenturing is geared to those who are building companies that innovate and create jobs and wealth. It is a guide for entrepreneurs and provides original articles, written by entrepreneurs for entrepreneurs, and aggregates content on the Web, related to starting and running high-impact companies. It is part of the Ewing Marion Kauffman Foundation that encourages entrepreneurship.

EnterWeb is a bi-lingual English and French listing of huge numbers of resources on the Web for entrepreneurship and related topics. It's the handiwork of Jean-Claude Lorin and could be a useful jumping off place for your inquiries.

Business Week Small Biz is just what it says. I find Business Week Magazine about the best source of information and is inspirational. I read it assiduously every week.

Startup Journal from Wall Street Journal has lots of 'how to' articles and is a lively place with many links, often commercial.

An excellent blog: Start-Up Guide - advice and thoughts on launching new ventures by Dan Marques of Babson College, Boston.

Everyday Entrepreneurs a good blog from a young Indian consultant based in Mumbai. he tells you his business as he sees it.

The Network for Teaching Entrepreneurship helps young people from low-income communities build skills and unlock their entrepreneurial creativity.

International Entrepreneurship is an eclectic site with information and links all over the globe; it's director is Jim Beach, at the J Mack Robinson College of Business of Georgia State University.

The Global Entrepreneurship Monitor (GEM) research program is an annual assessment of the national level of entrepreneurial activity. Initiated in 1999 with 10 countries, GEM 2006 will conduct research in 39 countries.

Entrepreneurship can make contributions to the combat of poverty by enabling dignity and choice through markets. Inspire yourself by reading The Fortune at the Bottom of the Pyramid by CK Prahalad. You may also like to consider Kiva—what's Kiva? It lets you loan as little as $25 to a qualified low income entrepreneur in the developing world. Click the logo and contribute to loans that change lives.

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William Keyser • WorkSavvy LLC • will @ worksavvy.ws