One of the challenges entrepreneurs face is the gut check question, "Do I have what it takes to be a success?" There have been thousands of research projects studying successful and unsuccessful entrepreneurs and the differences between them and the general population.
It’s Tolerance for Risk, Right?
Actually, no. It is a common misconception that entrepreneurs have a higher tolerance for risk than the general population. Studies have shown that on average, entrepreneurs have the same tolerance for risk as everyone else. There are some entrepreneurs who have a greater tolerance and some who don’t, but it is not a deciding factor for success as an entrepreneur.
A Supreme Confidence
One of the two attributes that are common in serial entrepreneurs is a supreme confidence in themselves and their business idea. Entrepreneurs have a tendency to be much more confident that their product or service idea will succeed than people in the general population. In the context of starting a business, this is a great attribute to have. If you didn’t think your business was going to be successful, you wouldn’t have the guts it takes to launch a new business.
Draw Conclusions from a Small Sample
The second attribute that is common among serial entrepreneurs is the willingness to draw conclusions from a very small sample. Often the sample has an N of 1, or in other words, the sample is the entrepreneur. Whatever the entrepreneur believes will happen must be what everyone else thinks as well, so it must be a success!
If you combine confidence with the willingness to believe the way the entrepreneur thinks is the way everyone should think, you produce a confident entrepreneur who has complete faith in their fledgling business. Studies have shown that successful entrepreneurs have had an average of seven failures before their success, unsuccessful entrepreneurs often have many more failures.
There are three things you need to be a successful entrepreneur:
1. Guts
First, you must have the guts to start a company and grow it into a success. You will find times throughout your startup where you don’t think you will be able to make payroll. Times when suppliers are knocking down your door for payment and you just don’t have the cash. Times when you have worked 100 hours in a week and not sure where you will find the energy for the next day. All of these things require you to have the guts to stick it out.
2. Brains
Successful entrepreneurs are often incredibly smart. It takes a talented person to balance all of the demands a startup company has and to come through the other side (hopefully) unscathed. The most successful entrepreneurs have enough intelligence to hire people smarter than themselves and give them the latitude to succeed.
3. Capital
Finally, your startup company must be well funded. The biggest obstacle most startups face is a lack of capital and funding at crucial junctures for company success. Make sure you have enough startup capital to make it through the tough times and grow your business (at least a year of funding). This may mean friends and family funding, angel investors, and even venture capital.
Do You Have What it Takes?
You must be prepared to do what it takes to make your startup company a success. Are you willing to commit 80 to 100 hours working? Can you take away time from family or pleasurable activities and invest it in your business? Are you able to handle the stress of business ownership?
Owning a business can be one of the most enjoyable things, but at times very stressful. If you have a family, you need them to buy in on how much time and energy it will take from you to make the business a success.
So now comes the time to make a decision, do you have what it takes to make it a success in your business?