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Entrepreneurship 101

In The Beginning

There are many reasons why someone desires to be an entrepreneur. There is, however, a commonality most often found among entrepreneurs… the entrepreneurial spirit. This trait is the driving force behind why people start their own business. It is a strong desire to create, coupled with a vision to succeed.

Various life experiences combined with someone’s own personal drive and vision can set the wheels in motion when considering livelihood as an entrepreneur. Undeniably, some of the biggest and best companies started in garages and basements by people with a vision to create. So what happens once the vision becomes a reality and you have a bona fide business? Hopefully, you have done all the preparation needed to get to this point and have a plan of action to keep your business heading in the right direction.

All too often, people with great ideas begin their entrepreneurial journey without having performed the due diligence needed on the front end. The business plan needs to be rock solid, your finances stable to sustain you, and your determination and endurance to keep moving the needle forward, fully charged. Understanding that a flexible mindset will help you make adjustments, as needed, is important and they shouldn’t be looked upon as setbacks.

In regards to finances, it’s important to consider options for your business throughout its lifespan. What does your business plan outline for the present, near and far future in regards to growth and what are the finances you’ll need to keep your business buoyant? When will you need to hire people, if at all? What type of capital purchases will be needed and is it better to buy versus lease? How will you anticipate and off-set your operating costs? There are many more questions you need to consider, but inevitably it will always come back to finances. For business owners seeking financial options, there are outside sources that may be beneficial, but understand these sources come with other types of “hidden costs” that may not be appealing, and I’ll address that later in this article.

Playing The Money Game

You need to be aware that obtaining investor money is not an easy task and one that many entrepreneurs will be denied due to the number of available investment opportunities. Generally, early start-ups are considered the least desirable by capital investors but can be attractive to an angel investor, who generally invests smaller amounts of money knowing there is a greater risk. Capital investors prefer to invest in businesses that have a track record of success and longevity thus increasing the odds of a big payout on their investment.

Is it wrong to seek out venture capital investments? Some people might say, it’s just the good ole’ American way of doing business. In reality, it provides opportunities for investors seeking great ideas, products and services that have come from the sweat equity of entrepreneurs. On the other-hand there are individuals who enter into entrepreneurship and start businesses with the intention of being invested in or purchased outright.

Serial entrepreneurs like Reid Hoffman make starting, quickly growing and acquiring large infusions of capital investments, their actual business model. I liken them to people who buy and flip houses. The emotional attachment to the property is in knowing there is no attachment beyond how attractive it appears to outside investors or buyers. This doesn’t mean the serial entrepreneur doesn’t care about his business; it simply means the end-goal is not for longevity.

For some entrepreneurs, an infusion of money from an outside source comes with a side of other, more significant changes. With venture capital comes the attractive infusion of money that not only helps relieve entrepreneurs of the financial burden of managing a business, but also helps divest them from the emotional attachment and control of the business they started.

These business owners have in essence agreed to take on partners with a lot of power and influence over how the business will be managed. The investors will assume the position of stakeholder and to whom the business owner will report. Since the goal of capital investors is to purchase at a price that leaves a great margin for profitability and opportunity to sell at a higher price down the road, the actions and decisions may not align between the investors and the business owner. This is a mindset business owners need to understand and adjust to quickly if they want the money. If relinquishing control of one’s business is something a person can mentally manage, then the transaction shouldn’t present any problems with the repositioning of authority. However, it will, likely, change many things about the company’s business model. Rest assured, venture capitalism is always this: self-serving to the investors.

At The End Of The Day

I don’t profess to tell other companies how to conduct business, however for my company inviting in outside investors has never been an option. I choose to work with people who believe in the mission, vision, values and culture we’ve set forth as a company. Capital investors are more concerned with how their exit plan will manifest and not focused on the efficacy of the organization as a customer engagement machine.

I like to believe that “good guys” can finish first in business. Good business people are those who are not self-serving, but are people who understand who it is that they serve, and they serve them well. This understanding is important for any business owner to know, because it puts motivation into context and gets priorities straight. Everybody wins in this situation. Companies make money. Consumers get what they want, and hopefully return to buy more. Companies that conduct business with their customers in mind, will in turn, be top-of-mind to their customers.

Knowing yourself and what motivates you, understanding what it will take to build your business and who you want to help make your organization successful are considerations never to be taken lightly.

Image credit: StockSnap.io

Want To Be Your Own Boss? Try This First

By Hans Balmaekers, Founder and Director, sa.am

Plan B: Entrepreneurship?

Many young professionals quickly discover that corporate life falls short of expectations. Do you relate? You probably feel you have more to offer than your job requires. You may even think you could outperform your manager. If so, you’re not alone.

It’s no secret that Millennials tend to score lowest in employee engagement. Many of us feel that, if only the economy weren’t so bad, we could have started our own companies by now and could proudly call ourselves entrepreneurs.

The great stories of leading self-made innovators like Elon Musk make it easy to see ourselves standing in their shoes, building companies and disrupting industries just as they did. And because corporate life can be so frustrating and unfulfilling, it seems attractive to completely jump ship and do our own thing.

Perhaps if you burned your bridges, you could soon be the next Steve Jobs, on stage, presenting the next big thing, with the world at your feet…

News Flash: Entrepreneurship Is No Ticket to Success

Ready for a wake-up call? The truth is that your dream isn’t likely to become a reality.

Most young-professionals-turned-entrepreneurs don’t even come close. They aren’t even entrepreneuring. They often do the same kind of work as before — but as consultants. (What else can they do with only a few years of experience?) These free agents chase clients, network like crazy, stick their toes in social media and market themselves, but they find themselves still unsatisfied and earning less than before. Has being brave ever felt less appealing?

Another Path

Maybe you shouldn’t leave and become an entrepreneur. Maybe there’s another way to use your talents and ideas and channel your frustrations about how your organization needs to change. Leaving is not your only option. Why not take a deep breath, stand up, rise above your desk and shout out, “Enough! I’m making changes around here!”

Sure, that might seem a bit theatrical. But be honest. Doesn’t that statement actually describe how you feel?

Start A Secret Intrapreneur Mission Now

If so, try a more subtle way to go about disrupting the status quo — start a secret mission to become an intrapreneur. That means you can use your entrepreneurial mindset and skills to create the job you love and generate better results for your company.

Read that again — a job you love that generates results for your company. Is that possible? Sure it is. Many have done it. Not all openly call themselves intrapreneurs, but the population of these inspiring and talented people is growing. They are changing their companies’ cultures from within, and launching hugely successful products. Think of companies like 3M, Sony, Vodafone, Dell and Google, just to name a few. Intrapreneurs are absolutely essential to these organizations. Most of them started their careers at the same point as you. They experienced the same frustrations as you. And just like you, they knew change was needed.

They had similar ideas and the same urgency to challenge the status quo and figure out how to get things moving. But instead of walking away from those challenges and leaving their employers, they decided to drive the change they envisioned.

Being a change-maker takes passion, persistence, patience and resilience. It’s not the easy road. And it’s not how our generation was raised. We’ve been told that the choice is always ours, that we can have whatever we want, and that participation is optional.

GenY operates with the mantra, “If we don’t like it, we don’t do it.” If you don’t like your job, it might seem easier to quit, but that will not necessarily help. You may still end up feeling unfulfilled, with no stage and no audience (plus a lower salary, or none at all).

Isn’t it more exciting and rewarding to show colleagues, managers and senior executives that we Millennials can fulfill our promise of being innovators, connectors, change-makers and leaders?

The next time you envision yourself as Steve Jobs, picture yourself on the same stage announcing the same breakthrough innovation — but wearing a shirt with your current company’s logo. A successful and happy intrapreneur. Doesn’t that feel more fulfilling than endlessly chasing gigs? You still get your monthly salary, and if you do it right, you’ll grow your income faster than you would as an entrepreneur.

Still Not Into Intrapreneuring? Consider This

Like many GenY workers, you may feel inspired to play your part in changing the world for the better. Multinational corporations and other big organizations play a major role in change-making, believe it or not.

You can take a shorter shower to save water, but compared to the consumption of big industrial corporations, it’s a droplet. You can talk for hours about the financial crisis, but as long as big banks and institutions don’t change the way they operate, will it ever be solved? Transforming education is a must, but if there’s no work for hundreds of millions of young people, why care?

Multinational corporations and big organizations are crucial in changing the world for the better. And the only way to make them frontrunners in that process, rather than followers, is for next-generation employees to drive change from within.

What’s Stopping You?

Ready to apply yourself to the ideas that will help you become an intrapreneur, rather than an entrepreneur? The best way to start is by learning how to perform better at your current job and in less time. Your time can be better spent investing in interesting side projects, engaging in more strategic relationships, and building your reputation.

Are you in?

Hans-Balmaekers-founder-sa.am_-001(Author Profile: Hans Balmaekers is the Founder and Director of sa.am, a resource for young professionals who care about their future, want to make a difference, and want to develop the mindset and skills to become change-makers. This month, sa.am is launching an online intrapreneurship course to prepare aspiring and new intrapreneurs for success. Connect with Hans on Twitter, or on LinkedIn.)

(Editor’s Note: This post was originally published by Brazen Life, a lifestyle and career blog for ambitious young professionals. Hosted by Brazen Careerist, the blog offers edgy and fun ideas for navigating the changing world of work. Be Brazen!)

Image Credit: Stock.xchng