Q: I’m trying to decide whether to start my own retail business. I have the experience to successfully operate the business, but what else does it take to succeed?
A: The fact that you are looking for success criteria indicates a realistic approach to entrepreneurship. Many folks jump in with both feet and ask questions later.
Entrepreneurs are generally inspired by at least one of two factors – independence and financial gain. Independence is sought to take risks and escape from other people’s direction. Many seek a haven from corporate bureaucracy. They want to be their own master, have a strong need for achievement and the freedom to make decisions. In short, they want the freedom that they did not have as employees.
The motivation for financial gain is generally considered to be unlimited. Importantly, the gains that are possible in new businesses must be great enough to offset the high degree of risk. Many entrepreneurs are so focused on escape that they ignore the unbalanced relationship between risk and reward and forge ahead in a high risk enterprise without taking the prudent steps to minimize risk, e.g., preparing a good business plan.
A Small Business Administration study identified five important predictors of an entrepreneur’s success. Drive is the most important attribute. New small business owners can expect long hours, high stress and endless problems, as they launch a business. The ability to maintain the necessary stamina should not be confused with the desire to succeed, although they are often interrelated.
Thinking ability encompasses creativity, critical thinking, analytical abilities, and originality. Often questions in this area include: Can I make a reasonable decision? Can I plan my strategy and take responsibility for carrying it out? Do I know when I need help and where to get it? No genius required here, just the ability to think clearly and analyze options.
People skill recognizes the importance of the ability to motivate employees, sell customers, negotiate with suppliers, and convince lenders. Personality plays a big part in success in this area.
Communication skill is the ability to make yourself understood. Part of this skill is the acknowledgement that muddled or abusive communications go unheeded.
Technical ability speaks to the need for entrepreneurs to know their product or service and their market. They must be experts in their field to operate their business with ease.
Finally, speak with a veteran SCORE counselor to get an objective assessment of your probability of success.
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