So you are ready to kick the boredom and security of your 9 to 5 job and start your own business. But you will need more than mere guts and a winning idea to make the transition from an employee to an entrepreneur. It is not an easy task and many run out of steam or money before they can taste success.
Over half of new businesses fail within five years of their existence! The reasons mainly include lack of experience, funds or management skills. There are 10 key qualities that are absolutely necessary for entrepreneurs to succeed. Some of these you may already have as a part of your personality while some will need to be developed consciously.
1. Specialized Knowledge
You need specialized knowledge of the trade, in which you are going to operate your business. Without knowing the nitty-gritty of your products or having prior experience of the dynamics of that particular market, you are setting yourself up for failure. Lack of such knowledge would lead to bad decisions and learning from costly mistakes is a luxury no new entrepreneur can afford. Once you set your business, there is only a small window of opportunity – a year or two at the most – in which you have to succeed before you run out of resources or energy. Apart from specialized knowledge, you also have to be a Jack of all trades and quickly acquire a basic understanding of the various areas of your business, from accounts and administration to marketing and production.
>> RELATED: How Entrepreneurs Think
2. Self Confidence
Launching a new business is a struggle and without confidence in yourself and your abilities to see things through, it would be easy to become demoralized. Employees reflect the morale of the entrepreneur and if they sense you are disheartened or insecure, they too would become frustrated and de-motivated. You have to learn to keep your fears and anxieties to yourself and reflect upon them in private. In public, you should be a figure of calm confidence.
>> RELATED: 5 Simple Yet Powerful Things Entrepreneurs can Do to Boost Confidence and Motivation
The determination to see things through is a quality that all successful entrepreneurs share. Such persons survive business downturns and rough patches through sheer persistence and tenacity. A strong will is even more necessary in the initial phases of a new business when even minor setbacks can rock the boat. Truly, when the going gets tough, the tough entrepreneurs get going. They learn to pick themselves up after every fall and stay on course.
4. Right Motivation
Why do you want to start your own business? Is it merely to earn lots of money so that you can buy a condominium and a luxury yacht? Or does something higher drive you? Entrepreneurs who are motivated by higher values than just becoming rich tend to build businesses that leave behind a lasting legacy. They are driven by a desire to create something worthwhile. They benefit the entire society by coming up with unique products and services or a better way to do things and thus create wealth for everyone. Sure they become significantly rich too, but that has rarely been their primary motivation.
>> RELATED: 12 Common Reasons Why People Don’t Start Their Own Businesses
5. Creativity and Innovation
Creativity is the ability to come up with unique solutions to problems. A successful entrepreneur adopts creative problem-solving techniques for challenges that come up in the course of operations. Such creativity and innovative thinking is needed in all areas, from spotting unfulfilled needs in the market and visualizing new products to coming up with more efficient or cost-effective procedures and systems. Sometimes, it needs only one good idea to change business fortunes and launch a winning product.
>> RELATED: How to Develop Your Creative Thinking Skills
6. Strategic Insight
No entrepreneur can succeed without a strategic insight into how things are going to move. What direction to take in the future? What new products to launch? Should operations be consolidated or expanded? To invest money or to build cash reserves? What will be the competitor’s next move? Is a downturn coming in the economy? Is the stock market overheated and will it undergo a correction? The answers to questions like these depend on the strategic insight of the entrepreneur. Businessmen who have gained this faculty by experience or by gut feel have a very good chance of succeeding as they can sense which way the wind is going to blow and will hence steer the ship accordingly.
An entrepreneur has to be a leader of men. Leadership is a quality that provides guidance and inspiration to those who look up to you for direction. The employees depend on the entrepreneur to chart the course for the new business, lay down objectives and help them overcome challenges that crop up along the way. Many people are fortunate to be born with leadership qualities. For others, it is a skill acquired by a lot of hard work and experience. Either way, no entrepreneur can succeed without leadership qualities to motivate the people working with him, inspire them to give their best and identify the direction in which people must move.
8. Absence of Ego
Entrepreneurs with a huge ego are unable to honor a point of view except their own. They are easily offended and talented people find it difficult to work with them. It is a recipe for disaster. Employees with a degree of self-respect and intelligence either leave the organization or learn to keep a low profile at work. Those who are ambitious tell the boss only what they think he wants to hear. Egoist entrepreneurs are unable to judge employees on the basis of their contribution to the company. Instead, they judge them through the prism of their personal likes and dislikes. Such entrepreneurs are their competitor’s delight because of a steady supply of disgruntled talent that they can welcome and hire.
9. Ability to Take U-turns
Flexibility in thinking is a key quality for entrepreneurs. They should be able to change their views and strategy based on emerging new situations. For this, an absence of ego is necessary. If you have one, you will not admit to mistakes you may have made and refuse to take responsibility for your decisions. Egoist entrepreneurs keep pouring money into projects that have no hope of being redeemed. One of the most famous examples – still taught in business schools – of this ability to make a U-turn is that of Microsoft. The company discounted the Internet phenomenon when it started getting popular worldwide. After two years of studiously ignoring it, it reassessed its position and “turned the company around on a dime.” In a stunning U-turn, it embraced the new technology with vigor, made acquisitions, launched new products and today is at the forefront of the Internet revolution. This would never have been possible if the top managers lacked flexibility in their approach and the humility to say “We guess we were wrong on this one.”
>> RELATED: Is it Time to Change Your Business Strategies?
The absence of ethics is the biggest factor that begins to tell on the prospects of a company in the long term. People – suppliers, customers, employees, bankers, other stakeholders – dislike dealing with dishonest or shrewd entrepreneurs. They feel ill at ease and have to be on their guard all the time. Honesty and ethics breed trust and once people begin to trust you, many doors will open. Ethical behavior will carry a new company a long way over clever marketing gimmicks or shrewdness in business deals that leave others simmering or feeling outwitted.
>> RELATED: How the Best Leaders Build Trust
Recommended Books for New Entrepreneurs
- EntreLeadership: 20 Years of Practical Business Wisdom from the Trenches
- The New Business Road Test: What entrepreneurs and executives should do before writing a business plan (3rd Edition)
- The Intelligent Entrepreneur: How Three Harvard Business School Graduates Learned the 10 Rules of Successful Entrepreneurship
- The One Minute Entrepreneur: The Secret to Creating and Sustaining a Successful Business
- World Changers: 25 Entrepreneurs Who Changed Business as We Knew
- Knowledge Management 101
- What Works on the Web? 12 Lessons From Successful Home-based Online Entrepreneurs
- The Enthusiastic Employee: 16 Myths on Employee and Performance Management
- How to Achieve Success Through Franchising
- Dangers of Hiring Part-Time Employees