Becoming self-employed by starting a business, be it a convenience store or service-oriented work, is not an undertaking that many of us can relate to. Many of us are used to working for someone else and having the security of a steady cheque at the end of every pay period. Benefits such as RRSP matching, flexible spending accounts, health and dental insurance, etc. that come with a corporate position are nothing to complain about either. However, being an entrepreneur may provide the freedom to express one’s creativity to the maximum extent, whereas a corporate employee may be limited by the company’s directional objectives.
Knowing oneself is critical to either. I have had the chance to watch two friends transition to entrepreneurs, while leaving behind their degree and job. This post is my observations about what makes such successful entrepreneurs tick. Needless to say, many of the attributes below would benefit any person, entrepreneur or not.
Entrepreneurs are willing to work long hours, especially immediately before and after the launch of the business. They are able to modify their lifestyle to accommodate the single-minded pursuit of establishing their business.
Planning and Organization
A good entrepreneur has a profitable plan for the business and also maintains a backup plan (such as emergency funds). They set the short-term agenda to match their long-term plan and stay organized enough to overcome any mishaps that might occur.
Unsurprisingly, they have a lot of confidence in their idea and have the ability to push it to a potential lender or business partner.
A continuation of the above really! A great idea is no good without the skills to express it. Most entrepreneurs are very good communicators. One does not have to be a great public speaker but certain attributes such as being a good listener, patience, politeness, taking a stand for the right things, and willingness to learn from all comers are noteworthy.
This trait is essential for any human being but gains significance for an entrepreneur due to the lack of a corporate brand name as support. A good reputation goes a long way and the word of mouth can do wonders in positive and negative ways.
An entrepreneur, just like any other person, should be willing to take blame when a mistake occurs and apologize, be it to a customer or employee. Being presumptuous will not take most people very far.
There will be times when the business is going through a lean patch and the urge to pack it in will surge. There may be the naysayers who will add fuel to the fire at such times. As long as one had done their due diligence, they should maintain their motivation to stay committed and make the business work. The support of a spouse, friends, relatives, mentors, and/or business contacts is critical. However, staying committed does not mean that an entrepreneur should not reevaluate at any cost or fall prey to the sunk cost fallacy.
Frugality is an oft-repeated word in the personal finance world and it is vital for an entrepreneur. Spending cuts may become essential during bad times, not just on the business front but also on the personal side. Firing an employee to cut back on costs, while taking a Hawaiian vacation with the family will not be good for the team (if one exists) morale. Even if the vacation is funded with money that had been in savings, it may be prudent to postpone the grand “stress-relief” vacation or opt for a less exotic local getaway.
Work/Personal Life Balance
Although successful entrepreneurs may seem to work long hours, they do not do so at the cost of ruining their relationships. They take care to spend time with family and not let them feel ignored. They never forget that the efforts they make to build a profitable business are for the relationships/family and not to supplant them.
A good entrepreneur is usually a good accountant or knows one. Maintaining proper documentation is important for determining business performance and to be prepared at tax time.
Are you an entrepreneur or have you watched a close one succeed? What are the other attributes that are necessary for being a successful entrepreneur? What are the pitfalls to avoid?
About the Author: Clark works in Saskatchewan and has been working to build his (DIY) investment portfolio, structured for an early retirement. He loves reading (and using the lessons learned) about personal finance, technology and minimalism. You can read his other articles here.