I have come to the conclusion that to be a successful entrepreneur you have to be a little different. These 12 questions are key to knowing if you are on the right track.
Entrepreneurship is not for everyone.
There’s no shame in that; I’ve seen the most stellar ideas fail because entrepreneurs couldn’t handle the burdens, difficulties, and disappointments when business didn’t go as planned.
I started my company in 2009. I know what it costs. Plus, 100 percent of my clients are entrepreneurs in what I would say is still the Wild West: large-scale commercial real estate development. I have seen fortunes made and lost.
The twelve questions I pose in this article apply not only to the real estate sector, but also to technology, venture capital or any other sector.
Answer these questions honestly because your success or failure can come down to one thing: your ability to digest RISK.
In 2009, I started an investment banking and commercial real estate investment business; it is the culmination of years of experience working with and in entrepreneurial and institutional companies. I have worked for large and small companies, private and public, and have survived the boom and bust of economic ups and downs.
I have come to the conclusion that to be a successful entrepreneur you have to be a little different, and I mean that in a good way. The most successful entrepreneurs I have worked with have a “quirk.” They are not easy to get along with, they are not easy to talk to, and they are impossible to manage because they are not willing to let ANYTHING get in the way of their dream.
Entrepreneurs are visionaries, they see a future for themselves that others cannot see, and risk is simply the price they must pay to make their vision a reality.
So it’s time to do some soul searching.How much risk are you willing to take to make your entrepreneurial dream a reality?
Risk is relative. One person’s excitement is another person’s heart attack.
Shortly after starting my business, I advised a developer on the closing of a large loan for the construction of a new hotel. I came home from the closing dinner with the Senior Vice President of the lender, who turned to me and said:
– Greg, I could never do what you do. You take so many risks. Your income depends entirely on your success.
I was flabbergasted and almost laughed out loud. Risk, I thought, but you’re the one who bears all the risk. You work for the man. Your boss can get up on the wrong side of the bed and fire you. Your job depends on a pre-made product that you don’t control. You have no say in your time because the bosses above you tell you how high to jump. And besides, your bank is a takeover target!
Where he saw risk and uncertainty, I saw my business in a completely different light, because I could:
- Diversify my risk by using multiple clients.
- Navigate market fluctuations by quickly adjusting our products and services.
- Choose the assignments and clients that will make my efforts most profitable.
- Use time efficiently without the burden of useless meetings and politics.
- Working with partners and colleagues that I enjoy working with.
- Provide the highest level of service without the pressures of short-term profitability.
- Enjoy unlimited earning potential that isn’t governed by the man behind the curtain.
- Generate income and wealth through both a real estate advisory and investment business.
Me, taking more risks? I don’t think so.
How do you know if you are ready to take the risk of being an entrepreneur?
You must understand the time, effort, stress, and investment you will need to make to succeed. You will need to wake up every morning with a complete and utter fear of failure. You will need an unquenchable fire in your belly to fight the unexpected battles that threaten to blow your dream apart.
Entrepreneurs are entrepreneurs because they can withstand all kinds of risks. Here are some of the most important ones:
- Financial: Risk of losing your investment, and possibly the investor’s money, if the business fails. I have seen numerous clients go through business and personal bankruptcy.
- Personal: Starting and running a business is stressful. It affects your mental, physical and spiritual health.
- Relational: Entrepreneurship is time-consuming; it is not a 9-to-5 job. The time and stress of the business can negatively affect your marriage, family, and social relationships.
- Emotional: Entrepreneurship can be both highly rewarding and self-defeating, as we tend to tie our success to our identity. Failure can lead to depression and worse.
- Reputational: Failure or lack of success can damage your image within an industry and your status within personal and social circles.
- Market: Competition and business cycles can quickly impact the demand and profitability of your product or service.
- Operational: Risks related to human resources, supply chain, regulatory, marketing and equipment can be difficult to predict and costly to address.
- Legal: You can expect clients, employees, and competitors to sue you for unexpected reasons.
If you are used to playing in a sandbox where things are done with little risk to you and you are not willing to take those risks, do not become an entrepreneur.
When you dream of your big business dreams, don’t just think about the rewards, think about the risks too. Entrepreneurship isn’t something you do by default; it’s a path you choose because you’re meant to do it. It’s what you’ve always wanted. It’s what will give energy and excitement to your life.
Remember that you can have the best business plan and the most favorable market environment, but you will probably fail if you are not able to take the risks of starting and running a new company. Look at your navel and ask yourself the following 12 questions:
- Am I 100% committed to the success of my new business?
- Am I willing to sacrifice aspects of my personal life, such as my marriage, family time, and social relationships?
- How long am I willing to live without making money?
- Can I invest in my business when there is no money coming in?
- How much of my savings and assets am I willing to lose before pulling the rope?
- Does my family understand the risks I take and will they support me when the unexpected happens?
- How will I react if the economy or the market unexpectedly turns against me?
- Do I know the potential market, financial, operational and legal risks I will face and do I have a plan to mitigate them?
- Am I willing to risk my ego by asking potential clients and investors for their support, business and money?
- Do I have a support system to turn to when results don’t go as planned?
- Am I mentally, physically and spiritually prepared to withstand the pressure of putting it all on the line?
- Am I willing to face the professional and industry consequences if my business is not successful?
Being successful in starting your own business is one of the most enjoyable and rewarding things you can do. But striking out on your own and taking risks is not for the faint of heart. You have to hope for the best and prepare for the worst, because nothing ever goes as planned.
There will be many sleepless nights. There will be many mornings when you wake up with a pounding heart. There will be many days when you’ll be tempted to throw in the towel.
Your ability to take and bear risk will bring you business success. It is the superpower that will propel you forward and help you stay on course.
So think about and plan for the risks you are going to take. And make sure you have the financial, emotional and physical strength to weather the uncertainties and setbacks.
Finally, let the Roman poet Virgil give you encouragement,
«Fortuna is known to us».
Fortune favors the bold.
