Have you dreamed about starting a venture on the side, keeping your full-time job, and making the leap to self-employed when your new business has legs? Or starting a venture, and still working part-time to pay the bills rather than use your savings?
If that is you, think hard about launching a venture. You might be a Reluctant Entrepreneur: an aspiring business owner who wants the rewards without the risk, or who hesitantly starts a business. Or who hesitantly starts a venture that never reaches its potential. Real entrepreneurs start the venture because they see an incredible opportunity and must pursue it.
As real entrepreneurs take bigger bets, risk their savings, and work without decent income for months or years, your risk aversion holds back the business.
That is not a criticism. It takes incredible belief in oneself to quit a well-paid job and risk some or all of your life savings, knowing you could be left with nothing if the venture fails. I admire entrepreneurs who are willing to put everything into an idea, such is their belief in it.
What’s your view?
- Have you thought about staring a venture?
- What stops you from following your dream?
- For those who have, what convinced you to take the leap from full-time work to self-employment?
Starting a venture is not something you can do in a half-hearted manner. These seven traits of reluctant entrepreneurs will help you tell the difference and hopefully save a lot of time, money and heartbreak:
1. I’ll start a venture when …
Reluctant entrepreneurs say they will start a venture when they have saved enough, paid off the mortgage, or have more time in their full-time job. Real entrepreneurs start the venture because they see an incredible opportunity and must pursue it. Waiting until the mortgage is paid down is akin to wasting the opportunity. The best entrepreneurs see green traffic lights, never orange.
My pet hate. Reluctant entrepreneurs are keen to start a venture, or work with you on one, provided they keep their full-time job. They want to start the business on the quiet, hoping their employer will not notice or take offence, and transition from the full-time job when the venture has legs and can pay them an income. It never works like that. By lacking your complete attention, the venture goes nowhere and the full-time career eventually suffers.
3. Part-time work
The safety blanket of the reluctant entrepreneur. I understand start-up entrepreneurs having part-time jobs or consulting, particularly when their venture is months or years from cashflow. But part-time jobs chew up the reluctant entrepreneur’s time, energy and passion. Inevitably, the entrepreneur focuses on cashflow from low-grade jobs rather than building a great venture. Real entrepreneurs are prepared to live on little for a longer period, and find a way to put 100 per cent of themselves into the venture, for as long as they can afford to.
4. Other people’s money
Reluctant entrepreneurs often want others to invest in the idea, yet hesitate at putting their own money into it. They see their personal savings as a “plan B”. Real entrepreneurs, meanwhile, wait as long as possible to sell equity, knowing their idea will be worth much more in coming years. They see an investment in the venture as fast-tracking their wealth.
5. Show me the money
As strange it sounds, the reluctant entrepreneur, in my experience, is usually the first person among a group of business partners to talk about equity splits, and who earns what and when. Why? Because he or she is trying to limit the downside before the venture barely gets going. Controlling risk is important, but real entrepreneurs are willing to let ideas take shape before getting bogged down in splitting the spoils. That is the benefit of having real commitment to an idea.
Also, as the venture gains traction, reluctant entrepreneurs take out the biggest possible dividend, for a quick payback on their investment. Real entrepreneurs are willing to reinvest and risk more profit to quicken the venture’s growth. They are willing to go without now, in search of a much bigger pay-off in coming years, because they truly believe in the idea’s potential.
As a part-time university lecturer in entrepreneurship, I am all for education. Trouble is, too many reluctant entrepreneurs take an undergraduate or postgraduate course in venture creation, hoping to gain confidence and find that spark. It happens for some students. But in my experience, the real entrepreneurs are too busy building a venture to spend their weekends on university assignments. They learn on the go, study part-time or take full-time courses in between ventures to develop their ideas and skills. And read plenty of books by leading entrepreneurs along the way.
7. A quick exit
Real entrepreneurs know when to cut their loss and redeploy capital elsewhere. Reluctant entrepreneurs kill the venture at the first obstacle. In truth, they are speculating on a series of ideas rather than making a genuine time, money and reputational commitment to the best idea. By not giving ideas enough time to breathe, they strangle the life out of opportunities.
*Original Article by Tony Featherstone: http://www.theage.com.au/small-business/managing/blogs/the-venture/are-you-cut-out-to-be-an-entrepreneur-20140430-37hbr.html