So, you want to be an entrepreneur!

Jeffrey Bernel

I am sure there are a number of WNLP readers who would like to run their own business and be their own boss. Over the next few weeks I will be sharing a number of articles from my entrepreneurship courses I taught.

First – The Four Goals of Every Business (Applies to both for-profit and non-profit business)
⦁ Get Competitive
⦁ Stay Competitive
⦁ Earn Above Average Returns
⦁ Do It Ethically and Legally

Entrepreneurship – Origin of the word: Entreprendre: French for “To undertake.” Enterpriser. One who initiates business. Individuals who recognize opportunity where others see chaos or confusion. Entrepreneurs seek constant growth.

Entrepreneurial characteristics
⦁ Passion
⦁ Perseverance
⦁ Credibility
⦁ Enthusiasm
⦁ Low Support Needs – “Burn Rate”
⦁ Customer Driven

Nine myths about entrepreneurs 
⦁ Entrepreneurship is a “young person’s game”? FALSE! In fact, the average age of a first-time entrepreneur starting a technology business is 39! And since this is an average, that means that just as many start-up founders are older as are younger.

⦁ Most “original” or “creative” ideas? FALSE! it depends on what you mean by “creative” and “original.” According to some studies, anywhere from 70% – 90% of the ideas for a new business come from an entrepreneur’s previous employment or existing business contacts. In other words, the more experience you get working for someone else, the more likely you are to come up with an idea for a new business.

⦁ Most entrepreneurs are motivated by money or “greed”? FALSE! And not just “false,” but way, way off. Most entrepreneurs are motivated by a desire to work for themselves and a passion for solving problems – particularly difficult, entrenched human problems. Even the most successful entrepreneurs will tell you that if you’re “in it for the money,” get out now. It’s much easier to make money working for someone else!

⦁ Entrepreneurs are “born different”? FALSE. In fact, a good number of people who become entrepreneurs never planned to be. Although there are correlations between certain types of behavior or psychological traits and entrepreneurship, it seems that as many successful entrepreneurs learn these skills and acquire these attributes as are “born” with them. And, we know that some of the most significant personality traits associated with entrepreneurship – such as “self-efficacy” – CAN be taught

⦁ Entrepreneurs are risk-takers? FALSE. Not necessarily. Entrepreneurs have a strong sense of their own knowledge, as well as a sense of the problems in their field, and what isn’t being done. As a result, entrepreneurially-minded people are not only willing try to solve a problem, but can hardly imagine operating any other way. This is often perceived as “risk-taking” behavior from the outside, because someone looking in does not understand the entrepreneurs’ perception of himself/herself. That said, there are risks. Many new businesses will fail within the first 5 years! WHY?

⦁ Leadership failure. Your business can fail if you exhibit poor management skills, which can be evident in many forms:
⦁ Lacking uniqueness and value.
⦁ Not in touch with customer needs.
⦁ Unprofitable business model.
⦁ Poor financial management. Run out of money.
⦁ Rapid growth and over-expansion.

⦁ Entrepreneurs need a business degree? FALSE. Although many self-employed people have business degrees, there is a stronger correlation between a degree in the sciences or engineering. According to a recent study, 34% of U.S. founders of high-tech companies held degrees in business, finance or accounting, 47% held degrees in STEM-related fields (Science, Technology, Engineering, or Mathematics).

⦁ Most entrepreneurs are millionaires? FALSE. The average self-employed person earns less than they would working for someone else. Entrepreneurs work more hours, on average, than those working for someone else.

So why do they do this?

⦁ Entrepreneurs seek to control their destiny.
⦁ Entrepreneurs like the excitement and passion of their journey.
⦁ Entrepreneurs create personal wealth.
⦁ Entrepreneurs do not like working for other people.

⦁ You need a lot of money? FALSE. Only 3% of new companies are financed by venture capital. The average amount to start a business is $15,000 – $25,000. The most common source of this money is the entrepreneur’s savings; not banks, or even loans from friends and family. Sixty-five percent of entrepreneurs finance their companies use some form of personal debt. Less than 1 in 12 start-ups gets investment money (equity financing) from family and friends.

⦁ Entrepreneurs are happier than people working for someone else? TRUE. But it depends upon what measure you are looking at. Entrepreneurs work more hours than those working for someone else. They tend to make less money. Most new businesses fail. Self-employed people report HIGHER job satisfaction, dramatically higher – 62.5% versus 45.9%.

Could YOU be an entrepreneur? The two most common misconceptions people have about their ability to be entrepreneurial:

1. “I don’t have any ideas to start a business.”
2. “I want to solve social problems, not start a business, so I am not really an entrepreneur.”

Wrong and Wrong!

⦁ You have LOTS of ideas; you just don’t realize it.
⦁ How do all entrepreneurs start? By identifying opportunities.
⦁ “Opportunities” is just another word for “needs,” recognized and addressed.
⦁ Individuals committed to solving social problems can be just as entrepreneurial as those starting businesses (the most effective ones are).
⦁ In fact, most successful businesses ARE successful precisely because they meet profound and widespread human needs.

“See a need, fill a need” is nothing more than “opportunity recognition.”

Jeffrey A. Bernel, MBA, was a member of the faculty of the University of Notre Dame’s Mendoza College of Business for twenty years as a teaching professor and the director of the Gigot Center for Entrepreneurship. He continues to serve Notre Dame as an Adjunct Teaching Professor. He was owner, chairman, CEO and president of American Rubber Products from 1979-1996 and chairman and owner of UniTek Sealing Solutions from 2006 to 2010. Jeff currently is the founding and current chair of the Healthcare Foundation of La Porte.

No comments.

Leave a Reply