Am I okay with taking risks?
Because starting your own business involves various forms of risky investments, one of the first questions you should ask yourself is whether or not you’re risk tolerant. How comfortable are you with taking risks? How often can you picture yourself taking those risks? Are you okay with the unknown or do you thrive on consistency? To be frank, you’re not going to get anywhere in business without taking risks, so if the idea alone makes you sweat, you might want to reconsider now – and that is totally OK! The truth is that no matter what kind of situation you’re in when you start a business, there will always be various components at stake and it’s crucial that you understand how to deal with that.
First, every business needs operating capital to begin. For example, let’s say you need to take out a loan, dip into your life savings, or apply for a costly consumer credit card in order to get your business off the ground. Since it’s challenging to know exactly how successful your company will be, all of these practices are seen as risky and stressful, yet they’re very normal day-to-day aspects of entrepreneurship. For these reasons alone, it’s important to think about whether or not you’re comfortable with a lifestyle that’s somewhat unknown.
Can I deal with the stress alone?
You may be thinking, “Of course I’m not going to run my business completely alone!” but the reality is that there are certain aspects of entrepreneurship that business owners have to keep to themselves, especially when it comes to financial worries. Based on personal experience, I’ll be the first to admit that owning a company can get quite lonely—even if you have ten people working with you. I say this because as a business owner, you can’t openly talk to your employees about the financial stress of your company, because the minute you reveal your stress is the minute your team will question their commitment to your idea, and may question whether they believe in you. Individuals work best when they feel like they have the tools they need to succeed, so if they’re even slightly concerned about their paycheck coming in on time, it’s going to create a distraction and could ultimately be the reason they leave – and they would have every right to do so.
On top of that, the people in your personal life can also have a big impact on your decision making, so it’s smart to be selective about who you share information with. If you talk about how much your business is struggling, your family might think you’re crazy for not giving up or your partner might encourage you to call it quits. Although you might believe in your idea, it’s likely that the people in your life will just see your goal as a big risk and question whether or not it’s worth it. There will always be people around every aspiring entrepreneur who are very risk averse, and on the flip side, others will love the idea of somebody else taking risk so they can watch. In the era of “founder worship” that’s a growing contingent, and while they may have the best intentions, you are not here for other people’s entertainment – you’re here to chart your own personal course toward becoming what success looks like to you! I think it’s good to try and strike a balance of having people around you with those conflicting views, and important to remember that you can (and should!) keep your financial worries to yourself – share them with your CPA and your bookkeeper because they are in an objective position to provide advice, while having complete clarity into the reality of your business. Write in a journal or talk to your dog instead—and remember—most businesses have cash flow problems, so don’t be too hard on yourself if things aren’t running smoothly from the get-go. If cash flow is your biggest challenge, rest assured that it is a challenge for every business.
These personality traits help…
I think it’s important to ask yourself those two questions before you delve too far into starting a business, but aside from that, there are some general personality traits that have been thought to be helpful when it comes to entrepreneurship. Ask yourself if these are qualities you already have, and if they aren’t, work on creating a game plan that can draw you closer to making them a more prevalent part of your life.
- You take action.
- You have confidence.
- You adapt well to change.
- You’re willing to sacrifice.
- You’re open minded.
- You have a strong ability to focus.
- And finally – you desire a sense of control over the path your life will change. Entrepreneurship will always be full of unknowns, but the one thing you do know is that you’ll always be in the driver’s seat. That’s why I’m here, and it’s what motivates every entrepreneur I know.