The ultimate goal of every entrepreneur is to succeed – and to be happy doing it. But not every entrepreneur gets to achieve it. Indeed, hundreds of new businesses are launched every year but success eludes most of them.
One reason is that entrepreneurs are faced with some of the most difficult questions on a daily basis – and how they answer them could depend on if the startup sinks or swims.
To ensure success, here are the three most important questions entrepreneurs must answer.
1. What are my goals as an entrepreneur? Most entrepreneurs find it difficult to separate their personal goals from their business goals. And that makes sense. Think about it, entrepreneurs are often trying to turn their personal passion into a business – and just need to find others to help achieve their goals. While I get that sometimes they are linked, the ability to separate your goals can help you focus your personal growth and the success of your business at the same time. So set goals.
Entrepreneurs from early stage startups have to pitch to investors to raise financing, and many entrepreneurs are inexperienced or terrible at making the presentation. As a venture capital and angel investor who has heard many pitches, I’ve compiled a list of mistakes and things to avoid if you are an entrepreneur seeking angel or venture financing.
Mistake #1: Sending me your executive summary or business plan unsolicited.
Investors routinely discard or don’t read unsolicited emails. They get hundreds if not thousands of such emails, and they can’t spend the time sifting through them all to find that diamond in the rough. But what they will pay attention to is a referral from someone in their network — a lawyer, an entrepreneur from one of their portfolio companies, or a fellow venture capitalist.
So, you’re never first to raise your hand during meetings and you’re uncomfortable schmoozing with strangers at networking events. Does that mean you’re doomed to fail in the business world?
Not even close, shy one.
Those on the quiet side tend to be good listeners, giving them a serious edge over their more talkative, sometimes oversharing counterparts, says etiquette coach Jacqueline Whitmore, founder of The Protocol School of Palm Beach.
Compared to other workers, entrepreneurs tend to enjoy an advantage in financial literacy. The know-how required to invest, organize, and save funds for a business often applies well to personal finance management, so these individuals run a “tighter ship” at home.
But this isn’t always the case. Business owners can lose their way financially by going to one of two extremes: Tying their personal finances too closely to their business resources, or running their personal finances quite differently from how they manage company money.
An unbalanced approach in either direction can lead to financial difficulties in the form of squeezed budgets and damaged credit. On the other hand, entrepreneurs who can strike a middle ground between these extremes enjoy greater financial security and success in their business and personal lives.
Statistics for women in business are mostly bleak. For example, women still earn 77 cents to every dollar men make and just 7% of female-backed teams get venture funding. A recently released study however, offers a glimmer of positivity. When women have established businesses, they are actually happier than their entrepreneurial male counterparts, as well as rating their well-being more than twice as high as non-entrepreneurs and non-business owners, according to the 2013 Global Entrepreneurship Monitor GEM U.S. Report.
There was one caveat – female entrepreneurs who are just starting out are less happy than male entrepreneurs in the start-up phase, says Edward Rogoff, one of the reports authors. One out of 10 women in the U.S. is starting or running a new business, the report also found. This rate is higher than any of the other 24 developed economies measured.
Given the slight chances of success, it’s a marvel anyone ever starts a business at all. One-third of new ventures close within two years, half within five years, and so on: only one in four is still around 15 years after opening day. But all that failure may offer its own reward, according to new research from a pair of economists from Stanford and the University of Michigan. They found that failed entrepreneurs are far more likely to be successful in their second go-around, provided they try again.The entrepreneurship studies that grab headlines tend to focus on investor-backed, technology start-ups. Those types of firms aren’t the norm. Most new businesses are still small, local retailers. To understand how these enterprises fare, Francine Lafontaine and Kathryn Shaw studied the successes and failures of retail entrepreneurs in Texas from 1990 to 2011. Over the 21-year-period, 2.4 million retail businesses opened and 2.2 million closed. Three out of every four were founded by first-time business owners.
Forget about the politicians in Washington and don’t count on Corporate America to get our struggling economy going — it’s America’s entrepreneurs that will prove to be the saviors. American entrepreneurs, through their creativity, innovation, and willingness to embrace risk, are the real engines that power our economy.
So often we look to the huge, multinational corporations as the drivers and guardians of our economy when the truth is the millions of small businesses across America deserve the credit. A strong, vibrant economy is the result of America’s entrepreneurs embracing the risk of self-reliance and venturing out to create their own opportunities. New small business startups create over three million new jobs each year. The solution to getting this country back on its feet and moving in a positive direction won’t happen because of the government. It requires the fruitful minds and determined drive of everyday citizens who enthusiastically embrace risk and begin the entrepreneurial journey.
Want to be part of the solution? Here are four ways that entrepreneurs can help revitalize our sagging economy: