Category Archives: Entrepreneurship

When Is It Time to Call it Quits?

Cat at Window

 

 

 

 

 

 

Have you ever had days like this when your life just wasn’t going quite to plan? Problems with customers, cash flow, employees, vendors, investors, and on and on… it sometimes feels like the whole world is hosing you down.

I’m sure everyone in business has occasionally felt like the poor fellow above… but what if it starts happening on a regular basis?

Obsession and passion are prerequisites for becoming a successful entrepreneur, and so is perseverance—up to a point!

But, if your business is just not performing according to your planning, and you have tried everything you can think of, maybe it’s time to change your plans.

Continue reading When Is It Time to Call it Quits?

Entrepreneur–Either You Are, or You’re Not!

I’ve just about finished updating my annual Business Survival Reality report for 2015, and like prior years it doesn’t paint a very pretty picture for a lot of hopeful entrepreneurs.

Business Survival Cover - 2015The failure rate is higher than what anyone ever admits, and no one seems particularly concerned.

I know there are many specific reasons businesses fail, but I’m wondering if there is not some root cause to so many businesses turning out badly.

I wonder if there are too many people starting businesses who really shouldn’t try being an entrepreneur.

These thoughts were going through my head when I ran across an article by Mark Suster, a former successful entrepreneur turned Venture Capitalist.  It’s interesting to hear Mark’s views from both sides of the entrepreneurial issue—entrepreneur and investor.

You can read Mark’s entire post here, but I thought I would share some of his thoughts below on what being an entrepreneur is all about:

“Being an entrepreneur is about finding your inner self confidence:

  • To be constantly told “it won’t work” but to keep plugging away anyways.
  • To be kicked a lot and still keep standing.
  • To hide your demons so that you don’t scare the bejesus out of your employees.
  • To inspire others to join your cause when by all rational accounts they should not.
  • And having the cojones to have them join you anyways. Pottery Barn rule. You hire them, you own them now. As in you’re responsible for these lines on their future resume. Don’t fuck them up.
  • To swallow your stresses and insecurities and keep your optimistic game face on in the office. And on your home front. Maybe even try to believe it in your own head.
  • It’s about wanting the right speaking slot at an important conference and hounding the organizer until he lets you do it.
  • It’s telling your creditors that you need 60 extra days to pay. Please. Yes, most entrepreneurs will be nodding their heads right now. Not fun, hey? But that’s what it takes.
  • Firing? Hell, get used to it. It’s a necessity. You better be good at it. Develop a thick skin for it. Not put off the difficult fires. You don’t have the spare budget to suffer fools. Hire fast, fire faster.
  • Friday night in the office while others are at the bar. Sundays in the back of a plane. Center seat. Smelly dude next to you.
  • Investor emails. They are forwarding you yet another mother fucking link to an article about your competitors. And wondering why the hell are we not doing THIS like they are. Enough already!?!

Entrepreneurshit. It never ends. It’s not all glamour. It’s mostly not glamorous at all. It’s just something you have to do. Often because you’re unemployable.

Your impertinence would get you fired in 2 days for telling your boss he’s a fuck wit. And it’s why you probably will quit on day 366 after the acquisition.

You’re unemployable. You’re an entrepreneur.

It’s not for everybody and you shouldn’t feel bad if you aren’t one of those that chooses this life. You’ll probably be healthier and wealthier.”


Having been an entrepreneur and crisis manager over the last few decades, I can relate to everything Mark said—it’s a tough business and not everyone is suited for it.

So, I wonder … of the 6+ Million businesses that “disappeared” last year, how many of those business owners would have even started up a business if they had known exactly what it took to be a successful entrepreneur?

We’ll probably never know, but I strongly encourage anyone wanting to become an entrepreneur to do a personal self-analysis and think it over carefully. Very carefully.

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My updated Business Survival Reality report will be online in the near future… keep watch at this blog for the announcement.

Better yet, visit the subscription box above and sign up to get an occasional post including the announcement about this release.

Entrepreneurship Reverses Downward Trend

The Kauffman Foundation has been publishing the Kauffman Index of Entrepreneurship for the past 18 years and this year they have expanded their effort with additional data and more in-depth analysis.

The first installment of this new Index is titled “Kauffman Index: Startup Activity” and was released last week. This installment covers national startup data. City, state, and regional information will be released on June 6th.

The most important finding in this 2015 Index is that the decline in entrepreneurship has been reversed after a number of years of steady downturn.

These new numbers represent the greatest year-over-year increase in entrepreneurship over the last two decades.

Does this mean the U.S. is experiencing a revival in entrepreneurship?  Not necessarily, because we are still in a long-term decline of new business creation.

Take a look at the chart below, which depicts the rate of new business creation per thousand population:

New Businesses - 2914

 

The biggest disappointment in Kauffman’s new numbers is the declining number of female entrepreneurs. Since the Kauffman Index started in 1997 the share of new entrepreneurs who were female fell from 43.7 percent to 36.8 percent in the 2015 Index.

Summary

Here are more highlights from the 2015 edition of the “Kauffman Index: Startup Activity.”

  • Approximately 6,360,000 new businesses were created during 2014.
  • 63.2 percent of new business owners were male.
  • The share of new entrepreneurs with a college education jumped from 23.7 percent in the 1997 Index to 33.0 percent in the 2015 Index.
  • Those with a high school, or less, education still make up the majority of new business owners with 44.6 percent in the 2015 Index.
  • Younger entrepreneurs, ages 20 to 34, continue to decline—from 34.3 percent in the 1997 Index to 24.7 percent in the 2015 Index. (Those under age 20 are not counted.)
  • Older entrepreneurs, ages 55 to 64, continue to increase—from 14.8 percent in the 1997 Index to 25.8 percent in the 2015 Index. (Those over age 64 are not counted.)
  • Immigrant entrepreneurs increased from 13.3 percent in the 1997 Index to 28.5 percent in the 2015 Index. (See my article on immigrant entrepreneurs here.)
  • Immigrants continue to be twice as likely to become entrepreneurs as U.S. native-born.
  • Entrepreneurs are becoming more diverse, with over 40 percent of new entrepreneurs in the 2015 Index being non-white.

You can download a complete copy of the new Kauffman Index here.

Another important finding in the 2015 Index is that more new entrepreneurs are people who had jobs, but wanted to strike out on their own to explore the world of entrepreneurship. This is called “Opportunity” entrepreneurship.

Those starting a business because they have few alternatives are “Necessity” entrepreneurs, and their numbers are rapidly declining.

 The Future

It’s great to see the turnaround in new business ownership… but what is the long-term prognosis for success of the 6+ Million new businesses that were started during 2014?

The sad truth is that few of them will survive very long. I recommend that you download a copy of my free report titled “Business Survival Reality” from the sidebar. An updated version of this report will be available around mid-June, and if you enter your email in the subscription box I will notify you when the new report is ready.

So, there you have some highlights from the 2015 “Kauffman Index: Startup Activity.” Please leave your comments and thoughts below—we’re talking here about America’s future.

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The Fear of Starting a Business

Woman in Woods

 

Are there millions of people who would like to start a business—but are afraid of getting lost in the forest of obstacles we read about everyday?

Are the gurus and pundits of the business world creating a “Fear of Starting?”

I’m not talking about the issues of fear of rejection, or fear of failure—mountains of stuff have been written about those topics.

I’m talking about scaring people out of even taking the first few steps toward starting a business… people who look at the myriad of business topics that are written and talked about everyday, and then saying to themselves “There is no way in hell I can learn all that stuff.”

Here are just a few of the business topics an aspiring entrepreneur gets hit with everyday:

  • Market Research and Analysis
  • Business Plans
  • Government Regulations and Fees
  • Websites
  • Seed Money
  • Business Licenses
  • Balance Sheets
  • New Technologies
  • P&L Statements
  • Venture Capital
  • Pro forma Financials
  • Angel Investors
  • Incubators
  • Runways
  • Advisory Boards
  • Trajectories
  • Cash Flow
  • Employees and Hiring problems
  • On and On and On……

These are typical of the things that aspiring entrepreneurs see and hear about from some kind of business guru or media pundit everyday—and it scares the hell out of them!

Is it any wonder that a person considering starting a business is completely overwhelmed by all the information rushing at them? Most business neophytes don’t even know where to begin.

But, Is This Really a Problem?

Let’s take a look.

According to the Bureau of Labor Statistics (BLS), the number of eligible (16 and over) Americans participating in the labor force this year dropped to a 37-year low of around 157 million. (The 16 and over designation was established by the BLS many years ago.)

That leaves over 93 million of America’s eligible population not in the work force.

If we add the 8.5 million people who are currently unemployed to this number, we realize there are over 100 million Americans who might be candidates to become entrepreneurs.

Then, at the same time, 72% of those working tell us that they want to be independent and not be a part of the cubicle nation.

So, it would seem that the vast majority of the U.S. population 16 and over might be considered potential entrepreneurs.

I wonder then, how many of these many millions of people would actually start a small business if it didn’t seem like such a daunting task?

And this is where the problem begins.

Decline of Entrepreneurship

I wrote an article some time ago about the decline of entrepreneurship in the U.S. and pointed out that the long-term unemployed were simply “giving up.” I wonder how many people are not in the work force because they have just given up?

Well, why do so many people just “give up” instead of starting a business, and why don’t more of the 72% that want out of the 9 to 5 cubicle life go ahead and start that business they have been thinking about?

I suppose there are a number of psychological as well as material reasons a person does not start a business, but I can’t help but wonder if we folks in the business industry have developed an atmosphere of complexity in the starting and running of a business that actually creates a “Fear of Starting.”

Is this how we present the path to starting a successful small business?

Long Dark Tunnel

(Image courtesy of Pakorn)

What do you think—are there people out there who would love to start a business, but are too intimidated by all they read and hear to get started?

I would really like to know what you think.

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Are You Cut Out to Ride The Entrepreneurial Lion?

lion-roar

 

Toby Thomas, CEO of EnSite Solutions, has a favorite analogy where he compares being an entrepreneur to a guy riding a lion:

“People look at him and think, ‘This guy’s really got it together! He’s brave!’ And the man riding the lion is thinking, ‘How the hell did I get on a lion, and how do I keep from getting eaten?”‘   —Toby Thomas

When you really think about it, you can see the truth in Thomas’s analogy… it’s hard enough to start a business (getting on the lion), but then, when you can’t make the business work (controlling the lion), it is often impossible to get out of the business without losing everything you worked hard for (getting eaten by the lion).

Unfortunately, there seems to be way too many people who, with little knowledge, or forethought, take a running leap onto the lion’s back and then wonder: “What the hell do I do now?”

Well, it seems that most of the time they get eaten.

I believe that just jumping on the lion—while unprepared to ride it—is the main reason that over 5 Million businesses “disappear” every year in the U.S. Most of them simply “get eaten.”

If you are going to “get on the lion,” you had better know whether you belong up there—that you have the “right stuff” to be an entrepreneur… otherwise, you will be one of those who get eaten.

The truth is: not everyone can be a lion-tamer—just like not everyone can be an entrepreneur. In other words, not everyone who starts a business should be starting one.

Can You Ride the Entrepreneurial Lion?

So, how do you know if you should even be considering starting a business… that you are entrepreneurial material?

That is not as simple a question as it might seem. That’s why I’m in the process of researching and preparing a small book on entrepreneurship.

This upcoming book is not about how to start a business—this book is about whether, or not, you should start a business.

The book will cover: the real definition of an entrepreneur; what the characteristics of an entrepreneur are; and what it takes personally to become a successful entrepreneur… to control the lion. It will also include a self-administered test that can give you a good idea about your chances of starting a successful business.

If you are a current entrepreneur, or still aspiring to become a small business owner, and you want to know whether or not you should be riding the entrepreneurial lion, leave your email address in the subscription box at the upper right and I’ll let you know when the book becomes available.

Or, if you think you can ride the entrepreneurial lion without knowing how to tame it—go ahead, give it a try…  jump on……..   Here’s what you will be facing:

Roaring-Lion-785x1024

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Why Immigrants Are Necessary To New Business Startups

In a prior post I raised the issue of the declining number of new entrepreneurs in the U.S. It seems we are producing fewer new businesses each year.

But now, let’s dig a little deeper and look at who in the entrepreneurial community is responsible for this continuing decline.

To do this we need to go back to the Kauffman Index of Entrepreneurial Activity and look at the data analysis of Robert Fairlie at the University of California, Santa Cruz.

Although entrepreneurship overall has been declining in recent years, here is an interesting finding presented by Dr. Fairlie:

“Immigrants were nearly twice as likely to start businesses each month as were the native-born in 2013.”

Here is a chart depicting the rate of new businesses created by each of these two groups of entrepreneurs:

 

Immigrant entrepreneurs

 

We’ve known for a long time that Immigrants play an important role in America’s economy, especially in the scientific and tech areas, primarily because the U.S. is not producing enough properly educated engineers and scientists.

Immigrants are successfully filling that gap.

Now, attention is being called to the disparity in the rate of business creation between native-born entrepreneurs and immigrant entrepreneurs.

Although this disparity has been in effect for some time, it has become much more pronounced over the past decade.

What is more disturbing is what I pointed out in my last post—that 25% of America’s long-term unemployed were leaving the workforce—simply “giving up.”

That is a lot of people who apparently no longer want to look for work… or start a business.

When considering that many American workers are “giving up,” and at the same time are starting fewer new businesses… it would appear that we will have to rely more and more on immigrants to start the businesses that will grow our economy.

So, who are these “immigrants?” I don’t claim to know, other than that they come from all nations around the world.

I think it is more important to know what they do—something like this:
 
(email subscribers watch video on my blog)

 

So, here is my take-away from this information:

  • Small businesses really are the backbone of the American economy… and I expect that is true of economies all over the world.
  • Native-born Americans are starting businesses at a lower rate than they were in 1996 (see above chart).
  • Immigrants are starting businesses at a rate far greater than native-born Americans (see above chart and the “Did You Know” column on the right).
  • It seems obvious to me that an influx of entrepreneurial immigrants is extremely important to the continued growth of new business startups—and the economy of the U.S.

What’s your take on this bit of comparative information—do you believe that immigrants have a key role in new business startups… and essentially in the American economy?

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