Reluctant entrepreneurship is based on the idea that you can start out slowly and proceed cautiously. You do your research and develop your business plan. And you keep your day job while you work on your side business at night and on weekends.
A reluctant entrepreneur is somebody who keeps his day job while he gets his ideal job going in the evenings and on weekends. He is willing to take the initiative to start his own business. But he’s not willing to quit his current job and lose the income. The compromise he accepts is that he will have to work 60 to 90 hours a week for several years before he can either abandon his great idea or fire his boss.
Here are my favourite take-aways from reading, The Reluctant Entrepreneur: Turning Dreams Into Profits by Michael Masterson
“Despite what some experts would have you believe, successful entrepreneurs are not the offspring of the privileged elite. Only 6 percent of Inc. 500 business owners were affluent when they began their careers. Fifty-eight percent were middle-class, and a very impressive 35 percent were either poor or working-class.”
The reluctant entrepreneur wants to build his own business and become wealthy one day, but he wants to do it cautiously. He knows that however good and exciting his business idea seems to be, its profit potential is unknown until it has been tested in the marketplace.
He is ambitious and hopeful but not foolish. He realizes that he has only a limited understanding of the market he is entering, and he does what he has to do to compensate for it.
Start a business you know something about—a business that is based on some interest you have. And take the time to learn about that business from the inside out. That might mean getting yourself some part-time work in the industry.
To succeed in any business, you must understand what kinds of products the marketplace desires and what price points are “sweet.” You must know how those first sales are made—what specific marketing techniques are employed to generate a sale without spending too much money acquiring the customer. You must understand the back end of the business (how to upgrade a new customer into buying higher-margin products). And you must become competent at the basic business skills: marketing, salesmanship, and negotiation.
“Entrepreneurs are risk takers, willing to roll the dice with their money or reputation on the line in support of an idea or enterprise.”
Take Bill Gates. Legend has it that when the entrepreneurial bug bit, he dropped out of Harvard to start Microsoft. A serious gamble. But, as Rick Smith tells us in The Leap, Gates didn’t drop out at all. He took an approved leave of absence. Then he relied on his parents’ financial support while he developed his programming skills and made contacts. If it hadn’t worked out, Smith argues, Gates would have gone back to Harvard, finished his degree, and made a good living as a corporate executive. Gates had his family behind him. He also had a Plan B. He was not then, nor is he now, a person who takes extreme risks.
“In the modern world of business, it is useless to be a creative, original thinker unless you can also sell what you create.” —David Ogilvy
EDUCATING YOURSELF ABOUT BUSINESS
The difference between successful entrepreneurs and those who fail is usually a question of which ones figure out the way the business works before the money runs out. You can minimize the problems if you begin with the maximum amount of knowledge. The best way to do that is to start a side business that is a knock-off of one you’ve worked in.
Pick an Industry You Know
There’s no better foundation than building on what you know. You might be drawn to the rush of something new and exciting, but your chances of success decrease with every step you take away from what you’re familiar with.
The first business has a good chance of succeeding. The only unknown: Will there be a big enough local market for fish? The second business has a poor chance of succeeding. There are simply too many things you don’t know about it … too many inside secrets that are blocked from your view.
Starting from scratch, learning a new skill, and gaining experience takes time. The danger is that you’ll become overwhelmed and quit. The learning curve is just too steep. But if you choose something you already have experience in, you’ve already got one foot in the door.
Pick the Right Product to Sell
There is absolutely no need to try to invent something new. In fact, that is a very bad idea. Entrepreneurship is not a case of “build it and they will come.” If nobody else is selling what you want to sell, there is almost certainly no market for it.
Forget trying to become the next Facebook or YouTube. They get all the glory when the media shines a light on entrepreneurs. But that kind of instant success is akin to buying a lottery ticket. Most likely, you’ll be working nights and weekends to get your startup business off the ground. That’s the hallmark of a reluctant entrepreneur … to stay within the safety net of a regular job. To have benefits and a steady paycheck until you know your idea is feasible and will make you some money.
YOUR FIRST THREE ACTION STEPS
From the very beginning—as soon as the entrepreneurial itch strikes—there are three action steps you can take to start turning your dream into reality.
1. Find the time to do it.
2. Find the money to do it.
3. Get yourself up to speed.
- The primary goal of most of your customers is to get the most from you and pay the least amount for it.
- The primary goal of the average employee is to get the highest salary and do the least amount of work.
- The primary goal of your competitors is to give your customers the impression that they can get more and pay less by buying from them instead of you.
CREATE A CULTURE THAT RESPECTS MONEY
Profits are the residue of extraordinary effort. If you don’t constantly push to make more sales and reduce spending, your profits naturally and inevitably shrink to nothing. By keeping the pressure on—both to increase the top line and decrease expenses—you create something that is the product of all that hard work.
Respect the money your business makes. Spend it cautiously. Reinvest it wisely. Understand what it represents. Communicate that understanding to all the members of your workforce. They are all involved, in one way or another, in the production of profit. It’s your job to get a respectful cash mindset in place.
EFFECTIVE LEADERS DON’T BECOME BUDDIES WITH THEIR EMPLOYEES
Good leaders never forget that their relationship with their employees is based on business. That means you don’t dump your personal problems on your employees. No matter how stressed out you are—or how open and understanding they may be. And you don’t allow them to dump their personal problems on you … even if it makes you feel like a hero to provide a solution.
EFFECTIVE LEADERS SOMETIMES ZIG WHEN OTHERS ZAG
As your company’s leader, you must stay true to your own vision and not jump on the bandwagon of me-too thinking. It might mean zigging when everyone else in your industry is zagging. It’s not safe territory. It’s not the middle of the road. But as syndicated columnist Jim Hightower says, “There’s nothing in the middle of the road but yellow stripes and dead armadillos.
The Ten Commandments of Doing Business
1. The customer is always right. Even when he is wrong.
2. Don’t promise what you know you can’t deliver.
3. Honor your verbal contracts with the same seriousness as you honor written agreements.
4. When negotiating, always aim for a deal that is as good for your partner as it is for you.
5. If a deal turns out badly for your partner but stays good for you, change it to be fair to him.
6. Always pay your employees as much as or more than they are worth—or, if that is impossible, as much as you can afford to pay them, with the promise of making it up to them later.
7. Share your business wisdom with everyone, including your competitors.
8. Never engage in gossip. Speak as if the person you are speaking about will find out what you are saying. (Because he will.)
9. Never take advantage of your vendors simply because you can. Your goal should be to compensate them fairly, even if it means paying them more than the market demands.
10. Never engage in recriminations and try to avoid litigation. In the long run, it is better to be the screwee rather than the screwer.
All the best in your quest to get Better. Don’t Settle: Live with Passion.