What Makes a Successful Entrepreneur?

Have you ever considered whether you have what it takes to be an entrepreneur?

You might think that there aren't many objective ways by which you can assess your entrepreneurial ability.

Actually, there are.

What Is Your Personality Type?

One of the quickest ways by which you can get some idea of your innate talents for entrepreneurship is to do a Google search with the key words "personality types." Actually, such a search will reveal almost 3 million results. So, you have quite a bit of information that can guide you in determining whether your personality traits would serve you well as a self-employed person.

One commonly used questionnaire for this effort is the Myers-Briggs Type Indicator (MBTI). This "test" was extrapolated from work done by the famous psychiatrist Carl Jung in his groundbreaking book Psychological Types, published in the English edition in 1923. It is probably the world's most widely used and widely trusted personality assessment tool.

Attributes of a Budding Entrepreneur

My feeling, based upon my own experience as a serial entrepreneur, is that the desire to be self-employed will begin to "burn" in you until it can't be denied. About 10 years ago, I wrote a book, You Can Buy a Business, which addresses attributes of the budding entrepreneur. Still, there are many common-sense questions that you can ask yourself to determine whether you have the psychological makeup to be successful as an entrepreneur.

Some of the questions that you can ask yourself are as follows:

1. Do you thrive on change?
2. Do you love a challenge?
3. Do you feel comfortable, even exhilarated, if you are out of your comfort zone?
4. Do you have a curious and restless mind?
5. Are you open-minded?
6. Can you accept the possibility of failure and actually be able to comfortably survive a business failure? This brings to mind Rudyard Kipling's famous line in his poem "If": "If you can meet with triumph and disaster and treat those two impostors just the same."

Causes of Business Failure

Years ago, many business professors would cite the lack of working capital as the chief cause of business failures. Today, we take a more subtle approach. Certainly, the lack of working capital can doom a business, but if we were to look beyond that to the primary cause of business failure, we would very likely see that it was a poorly prepared, poorly tested and poorly executed business model.

In a recent article for the E-Commerce Times entitled "Crafting a Business Model for Success," I discuss the key elements that go into a well-prepared business model. The main point that I make in that article is that a business model should clearly articulate what differentiates you from your competition. Put another way, it asks the question "Why would customers favor my company over the competition?"

A recent Google search for "business models" yielded me over 86 million results! Obviously, there is a plethora of information on the Web concerning business models. They can be ignored only at your peril.

Aides to a Budding Entrepreneur

An invaluable commodity that a budding entrepreneur needs is simply good advice. My recommendation as to sources of good advice would be professional people like accountants and lawyers.

Additionally, the Small Business Administration (SBA) provides free advice through its affiliate, Service Core of Retired Executives (SCORE). SCORE was founded in 1964 and has been providing invaluable advise to businesspeople since then.

Where to Find Capital

Finding startup capital can be your biggest challenge. Today's weak economy makes that challenge even harder, though not impossible. If you are looking for a relatively small amount of capital, say under US$500,000, I would consider the SBA. The SBA is a government-run program that provides guarantees to banks willing to lend you money.

But don't let the fact that the SBA is a government-run program convince you that borrowing through the SBA will be extremely easy and risk-free. In actuality, the SBA lending process is not that onerous. However, you should be cautious about the collateral that is required in order for you to get a business loan from the SBA. That collateral could very well take the form of a second mortgage on your residence.

As a young entrepreneur, I bought my first business thanks to the SBA. My wife and I had to sign second mortgage documents on our residence in order to obtain the financing. I must say that we were both somewhat concerned about the possibility that my business would fail and we would lose our home. Fortunately, our business did not fail but actually prospered. Within four years, we were able to pay off our debt in full and have the second mortgage canceled. The SBA lending process, used with caution, can therefore give you the start you need.

There are other sources of working capital available. Angel investors are probably a good bet, assuming that you have a well-prepared business plan that includes a unique business model in it. Angel investors are usually less intrusive than venture capitalists (VCs). A venture capitalist wants an exit strategy so that it can pay off its investors and give them a handsome profit. Angel investors, on the other hand, usually don't have the urgency that a venture capitalist has and tend to be more patient.

Even in today's environment, there are ways by which you can obtain the needed capital to start your company and become self-employed. The more time, effort and thought that you put into the planning of a new venture and creating a business plan can pay dividends in the end.

For additional tips as to where to find working capital, take a look at another article that I wrote for the E-Commerce Times: "Financing Your Startup: Some Essential Tips." This article provides more detailed advice that can guide you to success.

So, if you were to ask yourself "Can I be a successful entrepreneur?" the answer likely lies in the upfront work that you put into planning and executing your business plan and business model. Success can likely be waiting on the horizon for you, but it will take preparation to reach that horizon and achieve the success that you desire.

Good luck!