Over the past 20 years, people from all walks of life ask me how do they know if they should look at starting their own company. Entrepreneurs come in all shapes and sizes. Different race, gender, economic background, age and educational background. Regardless of where you come from, there are three things you need to tip the odds in your favor: Passion, Motivation and realistic expectations.
In my opinion, Passion is THE most important thing. Not only passion for your business idea but for life in general. I could talk on for days about Passion outside of work and its importance but I want to stay focused on Passion as it relates to ones professional career. We spend the lion share of our waking hours and adult life on work. It is essential one is doing something that they have a passion for. The importance of passion applies if you are starting your own company or working for a company.
How do you know if you have a passion for something? If you are asking the question, it is safe to say you do not. Passion as it relates to work and I have had the great fortune to find it on several occasions is a general overall feeling of excitement, happiness and growth that borderlines as being almost unidentifiable. It is just a feeling in your gut that permeates throughout your entire body. The best way to describe it is you do not feel that work is work. You enjoy going to work, you think about it all of the time, you have immersed yourself in everything and think/act like an owner.
Passion comes in different functions. It could be a passion for ‘the cause’ of the organization you are with. It could be for the team that you are on and it is more of a family atmosphere. It could be your own personal growth where you are learning so much everyday you think to yourself, I am learning more now than all of my time in school. There are several other examples and hopefully you get the point.
When I am speaking with entrepreneurs, the next thing I lock in on is what is their motivation for doing a start up. The biggest red flag I find is when people view their start up as a J-O-B. Either because they couldn’t find another job or because they have some fancy education/previous work experience and they feel they are entitled to run their own company. J-O-Bs are better suited for working for someone else. It all has to do with alignment of the business objectives vs the pay check and ego of the individual. It isn’t often that folks admit they view this as a J-O-B but it comes across pretty quickly in their actions.
The greatest motivation for starting a company is the entrepreneur just has a burning passion for their business idea. They think about it all of the time. Most of the time, it is an idea they have been thinking about for a long time. The other motivation is the entrepreneur feels they can capitalize on the marketplace and make more money over 5 years plus based on owning a piece of a company vs. adding up their sum of pay checks over the same time horizon.
The final piece of the puzzle is insuring there is alignment around a realistic expectation of what they are getting themselves into. FACT: Most start up businesses DO NOT work out. It becomes critically important that you get your personal finances squared away prior to beginning a company. I would recommend 1 to 2 years of living expenses in the bank prior to starting a business. The more prepared you are financially the better decisions you will be able to make for the business in the very important early years. I have come across too many companies that ‘needed’ the paycheck from the business in order to pay their living expenses and they end up giving up too much of the company by way of equity too early in the journey.
You know you are in a great position to start a company when you can give yourself a great answer to the following question, “What will I do professionally if this doesn’t work out?” If you are experienced in a particular field or industry and can confidently say, “I will just get a job at my old company or a competitor.” That is a great situation. If you are young enough where it just delays your saving or going back to school, etc. You are in great shape as well. I would advise against starting a company if you don’t have a confident landing spot or it could put your family in serious financial jeopardy.
Once you have the right mind frame around being an entrepreneur and you bring the right motivation and passion, you are ready for the best times of your life. I promise it will not be easy but it will certainly bring you happiness, excitement and determination and THAT is living!