When I was a kid I started to see these commercials on TV with Pepe and Toño from the Communications Council. For me that was the beginning, because even though in my family almost everyone is or has been an entrepreneur, I didn't see entrepreneurship as an act of heroism, but as a necessary evil. You started a business when you had no other choice. At least that's how it was in my immediate family circle.
Little by little the idea of entrepreneurship as a way of living, a personality and even a worldview began to grow in society. A romantic lifestyle of adventures, only for the brave.
Today I'm going to share a very unpopular point of view, and I don't expect most people to agree with me but I would like someone here to find in these words that insight that allows them to free themselves and finally make that decision they've been postponing, whatever it may be. My intention is solely to show a different perspective, because I firmly believe that if so many entrepreneurs — who despite their efforts, don't succeed — had this perspective, it would save a lot of suffering in the world.
There are 7 moments in the lives of many of us when it's not a good idea to start a business.
It's well known that 9 out of 10 businesses fail before reaching the 5-year mark. I believe the reason is very simple: 5 years is the average time it takes for an entrepreneur to run out of money (or credit) without finding a profitable business model.
The question here is why in 5 long years, 60 months, 260 weeks or 1,825 days don't they succeed? Is it really that difficult to have a successful business?
I don't think it's difficult, simply most entrepreneurs start at a terrible time in their lives and for the wrong reasons.
These are the reasons:
- They start a business because they don't have a job.
- They start a business because they don't like their boss or don't want to have a boss.
- They start a business because they want to make a lot of money working little time.
- They start a business because they need money and stability soon.
- They start a business because they want to "live their passion".
- They start a business because they want to work from home.
- They start a business because (without knowing it) they are broken inside, and believe that starting a business will help them solve their personal problems.
Let's develop each one.
Starting a business because you can't find a job
It's very simple. To start a business the key skill is sales, and a person who despite trying hasn't been able to find a job, is because they haven't understood the essence of what selling is.
Selling is being effective at communicating a new way to solve an old problem. Selling when looking for employment is showing a potential employer that you are capable of solving a problem they haven't been able to solve.
The issue is that many still have the idea that you are hired to do a job. When the reality is that a company hires you if and only if you are capable of adding value in the engineering terms of the word productivity. Productivity means achieving more with less.
A person who is capable of achieving more with less, and communicating it effectively, will never have problems finding a job, and it's that same productivity that you will need to start a business and for that business to do well.
I'm not saying that finding a job is easy, much less a job that pays you what you want to earn doing what you want to do. It's not easy, but it's much harder to do this when you have your own business, because having a business means doing this every day. It means inventing and developing systems that allow you to sell your new solution to an old problem, every day.
That's why I believe no one should start a business because they can't find a job.
If what you want is to work in a company and you can't get hired, instead of starting a business to compete with them, better look inside yourself and answer the question:
Why am I not able to communicate to my potential employers that I'm capable of generating more with less?
Okay. Number 2.
They start a business because they don't want to have a boss or because they don't like their boss
I think many people know this, but ignore it. Here it goes with all clarity. When you have a business you don't have one boss. You have one boss per customer, partner or investor.
Leaving a job as an employee because you don't want to have a boss is like asking for diet coke. It doesn't solve the problem.
If you don't like your current boss or can't make peace with the idea of having a boss, something very similar will happen to you when you start a business.
If you want to start a business because you don't like your boss or don't want to have a boss... my recommendation is that you learn to work as a team.
No one is perfect, we all have cascades of flaws, and you can't base your life plan on avoiding working in a team with someone above you.
They start a business because they want to make a lot of money working little time
In most cases, starting a business requires a lot of work at the beginning. And by beginning I mean the first 5, 10 or more years. Of course there will be exceptions, but the norm in a new business is not to earn a lot working little, but quite the opposite.
As an entrepreneur you will face what investors call "the valley of death", which is that period when you have zero income, consuming your personal resources.
"The valley of death" is where many end up overdrawing credit cards, on credit blacklists, selling cars and houses. Of course many don't, but if you're going to start a business you have to prepare yourself for extreme austerity at some point.
They start a business because they need money and stability soon
The joke tells itself. Stability is something that in business is achieved far in the future. While it's true that many new businesses reach that false positive where very quickly they get very good results, this doesn't mean that from that point on everything will go downhill. In fact, it's often the opposite.
They start a business because they want to "live their passion"
This is the paradox of the entrepreneur. Because if what you're passionate about is writing... and you start a publishing company, you'll end up writing little or nothing. If what you're passionate about is cooking and you open a restaurant, you'll end up cooking little or nothing. If what you're passionate about is programming and you start a programming company, if you keep growing, sooner or later you'll end up programming little or nothing.
The entrepreneur's path necessarily leads to one activity: business administration. An entrepreneur whose business is doing well, sooner or later ends up managing their business.
The paradox is this: If you want to live your passion, don't start a business. The best you can do is get a job where they pay you to do that thing that is your passion. Creative work is always operational work.
They are broken inside
Unfortunately I have met many people who start a business because emotionally, intellectually, physically, socially or spiritually they are broken inside.
A business won't fix you. On the contrary, a business needs the best version of yourself to work.
Are you broken inside? First accept it. Then go to therapy, and when you're well inside and out, then you'll be ready to start that business.
If you ask me there is only one moment when anyone should consider starting a business, and no, not everyone goes through this moment.
For me, the only moment you should start a business is when two things are met:
- You have the ability to develop a new and different solution to an existing and real problem.
- You have competitive advantage. I mean something that sets you apart from the competition (Contacts, Patents, Licenses, Contracts, Exclusivities). If your competitive advantage is "I'm better", you're in serious trouble.
What's the point? Stick to your knitting.
If instead you find yourself in one of the 7 scenarios I've laid out, and you're still trying to start a business, my recommendation is that you first work on yourself, solve what needs to be solved and come back only and exclusively when you're ready to truly give your best. If you really meet these two requirements, have no doubt that your business will do well.
Do you have doubts?
In the coming weeks at Leaderlix we are going to present an online Masterclass focused on students in the last semesters of their degree who are asking themselves what route their path should follow. If you are one of them or know someone who could benefit you can see all the information here.