Entrepreneurship - Rhonda Abrams

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it’s a given that you will be confronted regularly with unanticipated challenges. Your ability to learn the ropes and pick up on things quickly will be one of the prime determinants of your success.

      REAL-WORLD RECAP

       Challenges of entrepreneurship

      ■ You’ll face risk

      ■ You’ll deal with financial instability

      ■ You’ll work hard and drive yourself

      ■ You must cope with constant change

      ■ The buck stops with you

       THE BUCK STOPS WITH YOU

      As an entrepreneur, you’ll face a constant barrage of decisions you need to make—how much to charge a customer? how much to pay an employee? what kind of equipment to purchase? where to locate your office? what new products to develop? which ones to phase out? And on and on.

      Good entrepreneurs learn how to delegate many decisions to others, yet at the end of the day the final decisions always rest with you. You establish and maintain the company culture. You are the final voice on all major or critical decisions. Your choices are the ones that matter most. Being in charge is a huge burden.

      Now that you have a general understanding of entrepreneurs and entrepreneurship, it’s time to take a closer look at your own motivations and vision. Why do you want to be an entrepreneur, and what kind of entrepreneur do you want to be? When you think of creating your own company, what do you envision that company to be?

      When you start out, it’s important to understand your personal goals. Some entrepreneurial ventures fail and others flounder precisely because their founders or executives are uncertain of what they really want to achieve. They don’t structure the company and their responsibilities in ways that satisfy their personal needs and ambitions.

      Most entrepreneurs’ personal goals can be summed up by the Four Cs: creativity, control, challenge, and cash. Of course, everyone wants all four of these, to some degree, but knowing which ones you most want or need can help you structure your company to best achieve your goals.

      REAL-WORLD RECAP

       The Four Cs

      ■ Creativity

      ■ Control

      ■ Challenge

      ■ Cash

      Which of the Four Cs motivates you most?

      ■ Creativity. Entrepreneurs want to leave their mark. Their companies provide not only a means of making a living but also a way for them to create something that bears their stamp. Creativity comes in many forms, from designing a new “thing” to devising a new business process or even coming up with an innovative way to make sales, handle customers, or reward employees.

      If you have a high need for creativity, make certain you remain involved in the creative process as your company develops. You’ll want to shape your business so it’s not simply an instrument for earning an income, but beyond that a way for maintaining your creative stimulation and making a larger contribution to society. But don’t overpersonalize your company, especially if it’s large. Allow room for others, particularly partners and key personnel, to share in the creative process.

      ■ Control. Many people start businesses because they want more control over their lives. Perhaps you’d like more control over the way your good ideas are implemented. Maybe you want, or need, greater control over your work hours or conditions so that you can be more involved in family, community, or hobbies. Control is a major motivation for most entrepreneurs—usually more important than money. But how much control you need—especially day to day—directly influences how large your company can be.

      If you need or want a great deal of control over your time, you’ll most likely need to keep your company smaller. In a large company, you have less immediate control over many decisions. If you’re a person who needs control, you can still grow your business larger. You’ll simply need to structure communication and reporting systems to ensure that you have sufficient information about and direction over developments. If you seek outside funding in the form of investors, understand the nature of control your funders will exert and be certain you’re comfortable with these arrangements.

      ■ Challenge. If you’re starting or expanding a business, it’s clear you like challenge—at least to some degree. You’re likely a problem-solver and risk-taker, enjoying the tasks of figuring out solutions to problems or devising new undertakings. Challenge-hungry entrepreneurs can be some of the most successful businesspeople, but they can also be their own worst enemies—flitting from one thing to another, never focusing on one long enough to succeed.

      If you have a high need for challenge in your business life, it’s important to develop positive means to meet this need, especially once your company is established and you’ve met the initial challenge of starting a company. Otherwise, you may find yourself continually starting new projects that divert attention from your company’s main goals. As you plan your company, establish goals that not only provide you with sufficient stimulation but also advance—rather than distract from—the growth of your business.

      ENTREPRENEUR’S WORKSHEET

       The Four Cs

       Use this worksheet to help determine which of the Four Cs are the most important to you.

      ■ Cash. Every entrepreneur wants to make money. Perhaps it’s just enough money to provide a decent income; perhaps it’s so much money that you can buy a jet. How much you want, or need, affects how you’ll develop your business. Will you require investors and, if so, when? Will you sacrifice control to grow the business quickly?

      Keep in mind there are trade-offs between personal goals. For example, wanting more cash often means having less control, while staying at the center of the creative process can necessitate having a partner or growing slowly—once again trading off control or cash.

       See page 17

      Once you’ve considered the Four Cs, you must continue to define other aspects of your vision. A good way to proceed is to identify how large a business you hope to launch—and how big you intend it to become. You have several options.

       SELF-EMPLOYMENT

      The greatest number of all businesses fit into this classification. These one-person ventures provide critical income for the entrepreneur—and often the only source of income for the entrepreneur’s family.

      Solo sustainer businesses represent the classic self-employment business model—frequently called “sole proprietorships.” These businesses are owned by one person and are typically nonincorporated. Self-employed accountants, physicians, and others who provide professional services fall into this category.

      Businesses in the self-employment group share these characteristics:

      ■ Income from the business maintains the lifestyle of the entrepreneurs and their families.

      ■ The entrepreneur generally works alone (or sometimes with

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