Posts tagged ‘entrepreneur’

Reasons not to start a small business

In an earlier post about starting a small business I mentioned that one reason should not be about money. Another reason frequently mentioned by would-be entrepreneurs is that “I want to be my own boss.” When someone mentions one of these reasons, it makes me cringe. Below, I discuss why these are not good reasons to seek to start a business and why they could hurt the chances of the entrepreneur.

“I want to make money”

There is no doubt that anyone who starts a small business is driven in part by the potential to increase their compensation beyond what they could ever earn as an employee. But this should not be the primary reason. The simple reason being that for most businesses you don’t start by making money early on. For those dog days, where the founder(s) of the business have to work harder and take less money home, it is useful (if not necessary) to have a motivator beyond the belief that “I would be making a lot more money once the business takes off.”

This is certainly true for me with SciMetrika. Knowing that I was out to make a difference and that I was bringing something of value has certainly helped me during those periods where I’ve been wondering why I’m working so hard. What continues to motivate me day in and day out is knowing that the project we are working on have the potential of improving the health of many people, that we are creating jobs and advancing the career of many individuals who will become leaders and have a positive impact on others.

“I’m going to be my own boss”

I would hope that anyone would have been their own boss before they start their own business. That is, even if they were working for someone else, they realized that they were a business unit by themselves. I have a hunch that someone who has at least managed their own work, has been in a situation where they have taken initiatives, developed career goals and achieved them has a better chance of being successful in business compared to someone who just saw themselves as being a worker with no control over their career.

So, the first point is that even if you’re working for someone else, you can be your own boss. You are or can be as an individual, a business unit for your employer. That is if you work for Acme Corporation, you are “John Doe Acme,” a wholly-owned subsidiary of Acme Corporation. If you have had little or no success in developing your business unit within Acme Corporation, it will be hard to convince someone how you will be successful when you go on your own.

The second point (“I’m going to be my own boss”) is a bad reason is that you will always have bosses. If you have money from angel investors or venture capitalists (VCs) start your business and they let you stay as the CEO (more often than not, you will be replaced), your bosses are the representatives of the VCs or angels who gave you the money or the board of directors that they’ve put in place. If you were fortunate enough to bootstrap to start the company as I did with SciMetrika, your bosses are your clients and your employees. Why? Simply because no small business owner can operate without keeping in mind how the results of certain actions would be perceived or would impact these key stakeholders.  In a real way, they are your boss…

June 27, 2009 at 9:16 pm Leave a comment

Why start a small business?

There are many reasons to start a small business. But one reason shouldn’t be just to make more money. At least, it shouldn’t be the main one. I believe that the two important elements  to start a successful business is to a) offer services or goods that people want and b) being able to identify people who can buy these services or goods (i.e., there is a market for the services or products you want to offer).

For example in technology, an entrepreneur may have in mind a very nifty idea that could turn into a revolutionizing technology but technology in itself is not a product or a service. The question is what products will be derived from that technology. Part of the problem is that in general, entrepreneurs don’t want to limit their markets at least in the beginning.  The end result is that they may be overreaching which leads to too many products or services or ones that are not well defined. My advice would be to keep it simple at least in the beginning. Focus on the service or product that is likely to be most successful. You can always offer more products or services later after you have made your mark with the first one.

Another element that is equally important is to be able to find buyers. Often, there is no list of buyers available. For example, if you come up with a better X-Ray equipment, while you may know that hospitals will find the services useful, this in no way tells you who in the hospital can make the decision about buying your equipment.  It may be a hospital administrator, the chief radiologist, a third party to which the hospital has outsourced its radiology services. (Note that I know nothing about selling to hospitals; this is simply an example). The bottom line is that a lot of research could be needed to find out more about your market. My one sentence advice is to focus on the portion of the market that need your service or product the most.

Finally, I believe that another key ingredient that helps to start a small business is to have the passion for what you want to do. Running a small business takes a lot of energy. If you don’t have the passion that will help you put in the long hours that are required, stay out or at least wait until you have such time.

September 8, 2008 at 3:04 am 1 comment

Newer Posts


Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 1,209 other followers

Blog Stats

  • 52,356 hits

My tweets

June 2022
M T W T F S S
 12345
6789101112
13141516171819
20212223242526
27282930