Small Business And Entrepreneur Basics
What is an "entrepreneur"?
An entrepreneur is someone who takes responsibility for a business, manages it and builds it. Sometimes an entrepreneur purchase the business and sometimes they start it. It doesn't make any difference. They're responsible for that business. I like to add one thing to the common definition and that is that they have some vision about where that business is going to go. You can be a small business person and start a restaurant and that can be entrepreneurship. If you have a vision for building that restaurant or expanding it in some fashion, you're an entrepreneur. I add vision to the basic definition of entrepreneur.
What are the advantages and disadvantages of being an entrepreneur?
Disadvantages? Well, I have to tell you that there are some, but I'll go with the advantages first. You're your own boss. You're running the show. You say you don't like how much they're paying you? They're not paying you enough? It's okay: from now on you set the salary. So you're running the whole thing, and that's a good feeling. It's your control and your baby. You can watch it grow. Those are a lot of the advantages. Now, the disadvantages: Well, you may have to meet a payroll. Being responsible means you are responsible, and as I said earlier anything that can go wrong will go wrong. That's not just a saying, that happens. And so you're responsible for everything, and you have to figure out ways to do things that maybe you've never done before. And if things go wrong, you get hit for it. If you make a mistake, if you lose a good person because you lost your temper with them, make a mistake, a financial... man, you feel it. And by the way, I forgot to mention the long hours, that's a disadvantage. Now on the other side, I have to tell you too that the advantage is, well, you can become a Donald Trump, or better.
What are the skills I need to be a successful entrepreneur?
With small business and entrepreneurial basics, the more skills you have the better you have at becoming a successful entrepreneur. I mean that's why I say when you're talking about a particular business, it helps if you like it and know something about it. That's good, that's a skill, but everything that you can bring to the table is an advantage. Persistence is very important and you have to be a self starter. The alarm goes off in the morning, you know you have to get up and go. People say well I'm not a good sales person, you can learn to be a good sales person. With all these things, I don't think there is anything that you cannot learn. There's very little that you can't do which you can't at least improve on, so even though you enter things and may say “I don't know how to do this” or know how to, you can learn. You can do it and you can develop.
Do I need a Master's in Business Administration to be an entrepreneur?
No of course not - in fact I have to tell you this; I had a guest speaker one time who was a sucessful entrepreneur who did not have a Bachelors Degree, and during the break hes says confidently "I don't want my kids going to college." I said "why not?" He said because it teaches them in a certain fixed way. I don't believe that. I think that the more you learn the better, but you dont need a Bachelor's Degree; you dont need any degree, and I can give you a number of examples of really successful entrepreneurs that just never did go to school. One comes to mind Joe Cosby, who's a good friend of mine; in fact we even did a book together. He's a guy that, he sold like two million ant farms. It's a product that was sold in the early 60s. Still people know, "an ant farm? oh yeah, I've heard about the ant farm." These are ants in a toy container. Joe had no college at all; he made millions of dollars and then went back to school and got a masters degree. Mary Kay Ashe, another woman who did a wonderful job. Started out Mary Kay Cosmetics, she's the one who gave away the pink cadillacs and all these things. No education whatsoever, she did these things none whatsoever, except self taught. so long anwer to short question "Do you need a master's. No if you need specialized knowledge you can get it from somebody. You can buy it' you can buy consulting or whatever you need; you dont need it yourself. you have it? Wonderful, good, like I said it doesn't hurt you or anything. You don't need it though.
How do I know if I have the skills to be an entrepreneur?
Well, first thing, there are somethings you just consider yourself. Are you a self-starter? I mean if you know that "Gee, I have a terrible time getting up in the morning" and "I just can't make myself do some of these things" then maybe this is not for you. You can be very successful in your way and make a lot of contributions to society, which I think is very important without becoming an entrepreneur. However, becoming an entrepreneur, you've got to be a self-starter. You have to be the kind of person that keeps at it, because you're going to take a lot of things that go wrong, and you've got to be able to keep doing these things. So, one thing is, if nothing else: think through this and say, "Well am I like that? Am I that kind of a person? Can I deal with risk and uncertainty? Can I deal with stress?" (There's definitely going to be a lot of stress involved.) "Can I deal with all those things?" There are a number of tests out, in fact, there's one in my book called "The Right Stuff Test", and you take it yourself. If you can't get my book or can't even find it in the library, then in that case you can go to the internet and search for "ofnor test". I did this just to find out how many there actually were, and I came up with 1.8 million different hits, I think. Now, not all these will be the real thing, but a lot of these are tests and a lot them don't cost anything to take. So, take a little test and see how you sound on these things. I would do that first to see whether this is really for you.
What are the key steps to being a successful entrepreneur?
The key steps to being a successful entrepreneur. Well first, as I said, do some kind of self-analysis. Then, find a kind of product, service, or business that you like and hopefully know something about. You've got to be very careful because there are a lot of folks that are selling off opportunities. It's not that they're dishonest and not that they can't be useful, but they make any opportunity sound very, very exciting. So you can get, "Oh, this really sounds great. You can make a million dollars in a day or whatever," "Oh, you know, this sounds good." You'll be jumping all over the place. I knew a guy like that and it just drove me crazy. Every day he had another new idea and he would go charging out in this direction, charging out in that. So, it's important to find something that you really believe in and are really committed to; I'd say that's the second step. Then, you really want to investigate this before you get into it, because you're going to give not only money, but also your time, your energy, and everything else. You really want to make sure that, that this is something that really has potential for you. Once you do that you can start your planning. It's great if you've got a really great plan, but you've got to take action. That's the final step; take some action. Start working toward that and recognise, as my friend Joe Cossman, who had all different kinds of products that he sold, used to say, "You know, when I started out with all these different things, I never knew all the time when I started out in this direction, things would change slightly and I'd have to vary them as I went along. But my objective was always the same." I think that's very important. In other words, your objective, your final objective remains constant even as your strategy or tactics differ.
What is a "small business"?
With small business and entrepreneurial basics, a small business is any business that doesn't dominate its particular market, institute or segment. If you had a launderette for example, that's a small business. Now, if you start building that launderette and it becomes the number one laundry in your city, then it's a different light. It's very difficult to define what small business is in lot ways, I can't define it, but I know one when I see one. The US Small Business Administration, for example, they have certain criteria and they say if you have so many people and so much money, this is a small business. So, you can have all kinds of artificial definitions put on it. But basically, if it's not dominating any particular segment, then it's a small business.
How do I turn a good idea into a business?
Well, first I have to tell you that good ideas are a dime a dozen. When I first started thinking about different things and about thinking about entrepreneurship myself, boy it must be difficult to find an idea. Nah, there are 1 billion different ideas. The difference is taking the idea and making it real, making it happen. And I think that's why a lot of times you'll hear people say, "Oh, this guy's got this thing. It's international and it's selling. I thought of that first!" Yeah, that's good--you and several thousand other people. It's the person that carries that to fruition that really makes the difference. So the first thing you've got to think about is taking action. So your question was, "How do I take that and turn it into one?" Again, back to planning. In other words, it seems to me the three basic steps are identify the idea (you have all kinds of possibilities), decide you want to do that plan, and then take action.
