Rebirth of an Entrepreneurial Nation: Entrepreneurial Elements of Success

by Sherri Mahoney-Battles

Most people contemplating starting their own business know that the failure rate for business start-ups is incredibly high. Indeed, more than fifty percent of start-up business will fail within the first five years. Why do some businesses succeed while others fail? What are some of the trademarks of a successful business?

Typically, most people that start a business have developed a product or skill-set that they feel they could market. For example, a person, Sue, makes beautiful cakes for events and parties. Sue is told repeatedly by well-meaning friends and family that she needs to start a business selling her beautiful cakes. The cakes that she makes are unsurpassed in their beauty and taste wonderful.

Buoyed by the enthusiasm and encouragement of her friends and family, Sue takes out a loan, leases a storefront, purchases equipment, and quits her full-time job. Three years later Sue's business is closed. She has a pile of bills, a mountain of debt, no job and the smell of cakes makes her feel ill. Where did Sue go wrong?

There are multiple components that make up the elements of a successful business. Most people mistakenly assume that a stellar product or skill-set will ensure their businesses success. A successful entrepreneur needs to possess multiple attributes:

1. Self-Discipline – Put simply; some people make better employees than they do bosses. In teaching business development classes we found many people who wanted to start their businesses so that they could set their own hours and come and go as they pleased without the scrutiny of a boss.
   
   Self-employment requires a monumental amount of self-discipline. Left to their own devices many people will never make it to work or make deadlines. A business owner needs to have the ability to meet deadlines and work without someone monitoring her hours or production.

2. Management Skills – People that are self-employed work in a bubble. They have no human resources department, no marketing department and no accounts receivables department. A small business owner needs to know how to sell the product, make the product and get paid for the product.
   
   A successful business owner may identify the fact that she doesn't possess all of those skills, but she needs to identify the skill sets she does have and then have the ability to assemble and manage a team to fill in the areas where she has weaknesses. As her business grows, she will need to know how to manage this team.
3. Systems – Smart business owners develop systems that run their businesses. A system that works means that a business will not have to reinvent the wheel every time they need to do something. Companies like McDonalds and Wendy's have systems that can be easily learned by low-paid employees and used to deliver a product quickly. A customer that uses a service or buys a product comes back expecting more of the same. Systems ensure consistency.
4. Business Plan – Frankly, I am tired of business owners that tell me they don't need to have a business plan and that "it's all up here," while pointing to their heads. A business plan is a map of your business's future, and a business without a map has no sense of direction.
   
   Most business owners without a business plan are afraid to see their plan in ink because they are afraid to fail. If you want your business to succeed, give it a map. Writing a business plan is a commitment to succeed. Our subconscious mind works on goals continually, often without our conscious thought. Write it, type it, print it; there is an accountability that exists when we put things in ink.
5. Revise Your Business Plan – A key to a business's success is its owner's ability to adapt. Revisit your business plan from time to time and review the elements that are working and those that are not. The product that you initially thought would represent eighty percent of your sales might be a flop while another product takes off. Do not let your business plan confine your business so that it cannot adapt.
   
   
6. Separation – Most small business owners see their business as an extension of themselves. They identify with their business, and it becomes their baby. They spend all of their time nurturing it, growing it, and funding it. Some business owners fail to hold their businesses accountable.
   
   Most people would never go to work for an employer without getting a paycheck, but I have seen many business owners work for years with little financial reward from their businesses. Identify your business as a separate entity. If you put your time into your business, it needs to compensate you for your time so that you can continue investing. A business that cannot support its owner is not a viable one.

7. Foundation – In order for any business to succeed it needs a strong foundation to build upon. A business needs capital. It needs technology. It needs the right location. A successful business needs a marketing strategy, and it needs an owner with the right personality that can lead it to success. The foundation that you build under your business will play a large factor in its success.

Entrepreneurship may be the wave of the future, but not all people can be successful business owners. Some necessary components can be purchased; others learned, but there are also personality traits that define successful entrepreneurs.

Before you start your journey down the road to self-employment, identify your strengths and your weaknesses. Be realistic with yourself and take an accurate assessment about your ability to be an effective business owner. Self-employment can be rewarding, but it is also a difficult journey.

Publisher's Note: This article was previously published and is reprinted here courtesy of The South Coast Insider (or Prime Times)

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