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‘The man who wins is the man who works, Who neither labor nor trouble shirks;
Who uses his head, his hands, his eyes –The man who wins is the man who tries.’
Conrad Hilton

It’s nine-thirty on a Friday night and I’m staring at 700 brochures I spent the last six weeks
designing and writing. Realistically I need 2,000 more, but I don’t want to think about that right now.
The envelopes they will be stuffed into are strewn over a nearby couch. The names and addresses of
the brochure destinations were obtained from countless hours of Internet and library searches
conducted over the course of four months. As I write this, two thoughts come to mind: I cannot
remember the last time I had a day off and I have no idea if this direct-mail marketing campaign will
pay off. Although the research I did suggests that the potential customers I’m targeting do respond to
this approach (see Chapters 5 and 6), everything I send out may very well be thrown into the garbage
by the recipient. Equally as distressing is that after going over the numbers dozens of times I don’t
want to consider, yet again, how much this is costing me. So instead I plow on. Welcome to the world
of entrepreneurship, where there is no guarantee that the starter pistol will ever go off, where there is
never a finish line – and where just starting the process is a full-time job.
Here’s the bit that’s most difficult to articulate: and therein lies the beauty in all of this. As
President John F. Kennedy once said, we don’t choose to go to the moon because it’s easy - we go
because it’s hard. So it is with entrepreneurship. Starting (and running) a commercial enterprise
requires developing new skills, seizing the initiative, rising while others sleep, working evenings and
weekends and holidays, and taking educated risks. In addition, unique and sometimes conflicting
qualities and character traits - often considered inappropriate in refined social settings - are also
required, such as a rabid hatred of losing and a bit of obsessive behavior. Simply put, being goaloriented and having a bit of business talent aren’t enough on their own because, as the saying goes,
talent without discipline is a like an octopus on roller-skates. Knowing how to apply your strengths,
weaknesses, and differences in an appropriate context is also crucial – as is having the guts to do
things never before attempted even though you’re a bit reticent or afraid. The bottom line is that most
business success is not dependent on luck - unless luck is defined as preparation meeting opportunity
(according to some surveys, succeeding as an entrepreneur often means toiling 65 to 85 hours a week
or more [also, see the chart on page 119, How Small Business Owners/Managers Spend Their Time]).
But first things first. Whether you want to start an enterprise from scratch or try something new in
an existing organization, before the hard work and risk-taking commence you must first be ready and
willing to face the unknown with the best that humanity has to offer – the human spirit. If you don’t
fire yourself up and use your enthusiasm to make thorough preparations there’s a good chance that
your proposed business project will be sunk before it begins. The following page reveals many of the
qualities and attributes that successful entrepreneurs often possess, but paradoxically do not always
need to have.
Chapter 1
Do You Have What It Takes?
‘The man who wins is the man who works,
Who neither labor nor trouble shirks;
Who uses his head, his hands, his eyes –
The man who wins is the man who tries.’
Conrad Hilton
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Do You Have What It Takes? — The Entrepreneur’s Guide to Building a Successful Business
Stage I: The Right Attitude
Every endeavor, large or small, benefits from a proper mind-set. As Henry Ford once said, whether
you believe you can, or whether you believe you can’t, you’re absolutely right. In the business world,
this means having or developing above-average levels of the following before beginning a business
endeavor:
− Drive and determination. Including initiative, high energy levels, and a hearty appetite for
achievement.
− Ambition. Harboring a fierce desire to succeed as well as forming a substantial, realistic, and
personal definition of exactly what success is.
− Intelligence. The desire and aptitude to gather, interpret, and prioritize information.
− Commercial intellect. The motivation and know-how to scan business environments for
weaknesses, threats, and opportunities.
− Confidence. The courage to be decisive and assured (not arrogant), with your abilities.
− Curiosity. An innate interest in the world and how it works.
− The will to win. The determination to come out on top rather than just participate. (For example,
consider the thousands of entrants that enter big city marathons. Only a dozen or so can expect
to win. Most are happy to just finish the course. In business, you must enter to win.)
Stage II: Implementation (Putting Plans into Action)
Winning as an entrepreneur is based on being a doer, not a dreamer. This means having the guts to
leave the comfort of familiar surroundings and march off into the unknown with a well-honed idea
and a keen sense of adventure. Prerequisites for these attributes include:
− Communication skills. The aptitude to state what is needed clearly and concisely.
− Motivation. A willingness to work long hours whether you feel like it or not.
− Self-discipline. The ability to rein-in temptation or excess.
− Persuasiveness. The ability to convince others and inspire them to do your bidding.
− Speed and Agility. The ability to respond intelligently to situations both rapidly and effectively.
Stage III: Diligence (Going the Distance)
Developing the fortitude and determination to stay on track is probably the most difficult of all
entrepreneurial abilities. Launching and running a business is time-consuming, life-consuming, and
full of distractions and setbacks. Surviving the process with grace requires:
− Resilience. The capacity to learn from mistakes, brush off adversity and pull yourself together
after suffering through the inevitable losses that running a business involves.
− Perseverance. Steadfastness and consistency (not stubbornness) with goals.
− Humility. Maintaining a genuine conviction to serve others.
− Reliability. Being responsible, accountable, and available.
− Temperament. Keeping a sense of calm, balance, and proportion no matter what happens.
− Endurance. The ability to bear the ups and downs of a working day with patience and fortitude
– and come back for more.
− Flexibility. Greeting the forces of change and being willing to adapt.
− Understanding. Accepting that people are different and being able to empathize with them.
The Four Main Fears of Entrepreneurship
Obviously, the number of qualities and attributes needed to succeed in business is quite extensive.
So does that mean that an entrepreneur needs to be a superhero to triumph in the business world?
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Do You Have What It Takes? — The Entrepreneur’s Guide to Building a Successful Business
Absolutely not. Few people are born with all the marvelous abilities that are needed to succeed in life.
Yet successful business owners appear to get around their shortcomings by learning as they go,
admitting their frailties, and shoring up their weaknesses – a process that helps overcome their fears.
Fear is a common emotion that often manifests itself into excuses, procrastination, or inaction.
Indeed, many psychologists say that fear is the root cause of most human problems. Listed below are
four of the most common fears associated with starting a business.
1. Age. Exactly what age is too old or too young to run a business? Years ago, the owner of a
sporting goods store in the USA celebrated his 100th birthday (he opened his enterprise in
1933). He was only working four hours a day, but he was still working, and introducing new
products, and beating his competitors. Colonel Sanders, the man who invented Kentucky Fried
Chicken, began selling his secret formula to franchisees at the age of 64. Ray Kroc, a malt-shake
machine salesman from Illinois, bought four California hamburger restaurants when he was 52
years old and re-tooled them into the McDonald’s empire. And so it goes as the number of
entrepreneurs over the age of 50 is expected to rise dramatically according to industry experts.
At the other end of the scale, Michael Dell, the founder of Dell Computer, began his first
business at the age of 13. By the time he turned 19, the computer parts business he ran out
of his college dorm room was grossing $80,000 per month. Not to be outdone, Bill Gates
started Microsoft at the tender age of 19. And today, millennials are starting businesses at
almost twice the rate of their older peers (Petrilla 2016). The overall message is that age is not
a determinant factor when it comes to starting and running a business. Attitude, courage,
and action are far more important.
2. Lack of Money. There’s no doubt that having lots of capital makes starting a business somewhat
easier. Yet a sizeable number of successful practitioners steadfastly believe that having a
better-than-average amount of start-up capital has little to do with overall success. Indeed, quite
a few hard-nosed entrepreneurs claim that it’s actually beneficial to create a business with as
little money as possible. Their belief is that too many individuals, when starting with a pile of
cash, waste it on things they don’t need – an office, a secretary, expensive computer equipment,
and so on. On the other hand, having a small amount of startup cash teaches frugality and
efficiency. If you’re not convinced by this argument consider the hundreds of thousands of folks
around the world who began their businesses with little more than chump change and a burning
desire to see their idea bear fruit. For example, Disney, Apple, Hewlett Packard, and the Mattel toy
company, all began life in garages. Seattle based teenager Jim Casey founded UPS with $100,
two bicycles, one telephone and six employees. The Nike Corporation began in 1964 when Phil
Knight and Bill Bowerman each invested $300 in a shipment of athletic shoes and sold them out
of a car at track meets. Eighteen-year-old Joyce C. Hall started the Hallmark greeting card
company with an armful of postcards he kept in two shoeboxes. Thomas Monaghan, who spent
his early life in and out of orphanages and foster homes (and was kicked out of everything
afterward from a Catholic seminary to the Marine Corps) started Dominos Pizza by turning a
bankrupt pizza parlor - half of which he traded for his Volkswagen Beetle - into the USA’s
number one pizza delivery service. And the Marriott Hotel chain began its life as a humble root
beer stand in 1927. Simply put (as the old saying goes), success in business is usually based on
10% capital and 90% guts. Stated another way, people that can’t make money without money
usually won’t make money with money. According to successful business practitioners, mind
power, diligence, and passion are far more influential.
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Do You Have What It Takes? — The Entrepreneur’s Guide to Building a Successful Business
3. Fear of Rejection. Most successful business owners readily admit that the path to prosperity is
paved with rejection. Indeed, many hard-core entrepreneurs state quite openly that they often
fail twice as much as others. So why do they end up succeeding? Because they try more. Instead
of giving up, successful business owners learn to deal with failure and adversity and then move
on. Take for example Bernard Marcus and Arthur Blank who, in 1978, joined forces with
co-worker Ronald Brill and founded Home Depot – after all three men had lost their jobs in a
corporate buyout. Or consider King C. Gillette, the inventor of the safety razor, who suffered six
years of humiliating rejection from companies, investors, and toolmakers while they laughed out
loud at his innovative new product. When King eventually decided to produce his invention
himself, sales rose at a rate of 1,000% annually! The story of Ewing Kauffman provides another
good example of how successful entrepreneurs rebound from rejection. Shortly after WWII,
Kauffman was fired from his job as a salesman because his commissions exceeded the
president’s salary at the company where he worked. Undaunted, he descended into his
basement and began making calcium pills from oyster shells. Years later, after capturing forty
percent of the $100-million calcium supplement market, he sold his company to Dow Chemical
for a fortune.
Such bounce-back stories are not the stuff of old fashioned motivational stories. Indeed,
millennials seem to be more prone than their elders to learn from failure, brush it off, and
then parlay it into victory (Petrilla, 2016). The lesson here is that winning often lies in the
mind. Success to those with the perseverance to stay in the game is usually nothing more
than failure turned inside out.
4. Lack of Education or Experience. There is evidence that suggests a college education does not
guarantee business success. Indeed, it sometimes appears otherwise. Steven Jobs and Stephen
Wozniak, for example, founded Apple Computer after dropping out of college. Neither one of
them had any entrepreneurial experience. Michael Dell, the multi-millionaire founder of Dell
Computer, is also a college dropout. The same goes for Ted Waitt, who, after quitting school,
underwent nine months of on-the-job training at a computer company only to leave and start
Gateway 2000. Ten years later, his salary exceeded $500,000 per annum. John Bond, former
chairman of HSBC (one of the world’s largest banks), also never went to university.
Still not convinced? Then consider the story of Ian Leopold, whose college professor failed
him because of the unrealistic business plan he submitted in class. By sticking to his instincts,
Leopold turned a $48 investment into $4-million in ten years with the very same plan
(writing university guidebooks).
And in the last years of her life, multimillionaire Anita Roddick, founder of The Body Shop,
advised entrepreneurs to ‘stay away from business schools’. Her belief was that business
schools focus too much on the financial side of business and ignore the all-important human
element.
Of course this does not mean that education and experience are not needed to start and run a
business. The following statement was relayed to me several years ago by a successful
entrepreneur in France: ‘I didn’t learn any ground-breaking secrets in business school,’ he said.
‘Most of what I’ve learned I experienced on the job. Yet one thing I’ve noticed over the years
is that no matter where business studies are taught, the folks who need this information the
most are usually nowhere to be found.’ His point is that there’s no shame in not knowing
everything there is to know about running a business. There is only shame in not admitting it
and ignoring the need to improve.
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Do You Have What It Takes? — The Entrepreneur’s Guide to Building a Successful Business
The Top 10 Myths of Entrepreneurship
Of course fear isn’t the only obstacle that stands in the way of entrepreneurs. Countless myths also
block the first crucial steps. Following is what Scott Shane, professor of entrepreneurship at Case
Western University, says are the ten greatest misconceptions of entrepreneurship.
1. A lot of money is needed to finance a start-up. Contrary to what most people believe, 10-years ago a
typical start-up in the USA required about $25,000 to begin. How is it possible to start a
business with such a small amount of money? Successful entrepreneurs do whatever they can to
keep costs low. They borrow equipment instead of paying for it. They rent instead of buying.
And they turn fixed costs into variable costs by doing things such as paying their employees
commission instead of salaries.
2. Venture Capitalists are a good source for start-up money. Not unless the business is in the computer
or biotech industries. In the USA, venture capitalists only fund around 3,000 companies every
year (one-third of which are in the start-up stage) with around 81% of all venture capital dollars
going toward businesses that deal in computer hardware (and software), semiconductors,
communication, and biotechnology. In fact, the odds that a start-up will receive money from a
venture capitalist are about one in 4,000 (which is worse than the odds of dying from a fall while
taking a shower).
3. Most business angels (i.e.: a person who enjoys giving money to someone else so that he or she
can start a business) are rich. If rich means being a person with more than $1-million, or an
annual income of $200,000 to $300,000, then the answer is no. Almost three-quarters of the
people that provide capital to fund someone else’s start-up don’t meet SEC accreditation
requirements. On the contrary, 32% have an income of $40,000 a year or less and 17% have
negative net worth.
4. Start-ups can’t be financed with debt. Actually, debt is more common than equity. According to
the Federal Reserve Survey of Small Business Finances, 53% of finances for new businesses that are
two years old or younger come from borrowed money; 47% comes from equity.
5. Banks don’t lend money to start-ups. According to Federal Reserve data, banks account for 16% of
all the financing provided to companies that are two years old or younger. This is 3% higher than
the next highest source – trade creditors – and a bit higher than the most common capital
sources everyone talks about: friends, family, business angels, venture capitalists, strategic
investors, and government agencies.
6. Most entrepreneurs start their businesses in attractive industries. Unfortunately, the opposite is
true. Most entrepreneurs head straight for the worst industries when contemplating a start-up.
For example, in the United States the correlation between the number of entrepreneurs starting
businesses in an industry and the number of companies failing in the same industry is 0.77. Put
another way, this means that most entrepreneurs choose industries in which they’re most likely
to fail.
7. The growth of a start-up requires more entrepreneurial talent than the type of business chosen. Perhaps
not surprisingly, the industry in which an entrepreneur chooses to start his or her company has
an enormous influence on its growth. Between the years 1996-2006, around 4.2% of all
start-ups in the computer and office equipment industry made the Inc 500 list of the fastest
growing private companies in the USA. The percentage of growing companies in the hotel and
motel industry averaged around 0.005. Eating and drinking establishments averaged 0.007%.
This means that the odds of making the Inc 500 list were 840 times greater for a computer
company rather than a hotel.
8. Most entrepreneurs are financially successful. That depends on your definition of success. While
it’s true that small businesses are responsible for the majority of wealth in most countries, the
wealth these businesses create is unevenly distributed and it spreads rather thinly. For example,
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Do You Have What It Takes? — The Entrepreneur’s Guide to Building a Successful Business
the typical profit for an owner-managed business is $39,000 per year and only the top 10% of
entrepreneurs earn more money than their employees. Put another way, the typical
entrepreneur almost always earns less money than he or she would earn working for someone
else.
9. A large number of start-ups achieve the sales growth projections that equity investors are looking for.
Absolutely not. Of the 590,000 or so new businesses founded in the USA every year less than
200 reach the $100-million in sales in six years that most venture capitalists require. Around
500 businesses reach the $50-million in sales that top-end business angels are seeking, and only
about 9,500 companies reach a target of $5-million in the same six year period.
10. Starting a business is easy. It’s unclear why anyone would believe this to be true – particularly
when one takes into account that the majority of people who start a business end up failing. In
the USA, for example, seven years after beginning the start-up process, only one-third of
successful entrepreneurs can boast about having a positive cash flow greater than their salary
and expenses for more than three consecutive months. (Shane, 2010)
Overcoming Negativity
Perhaps now it’s easy to understand why so many people forgo the notion of starting their own
business and choose to work for someone else instead. Simply put, building a business is hard work
and the odds of succeeding are harsh. That being said, if starting a business seems beyond your reach
because the people surrounding you - not the facts - are filling your head with negative thoughts, the
following advice from experienced business practitioners may be worth considering:
− as a rule most people in life will tell you what you cannot do rather than what you can do.
− just because someone doesn’t believe in you doesn’t mean you can’t succeed.
− no one can make you feel inferior without your consent.
− your past does not have to contaminate your future.
− where you come from isn’t important, it’s where you’re going that counts.
− if you focus on what you want, instead of what others deny you, you’ll have a much greater
chance of succeeding.
− fear of the unknown (and the known) can be controlled once it’s admitted.
Developing a Healthy Definition of Success
Still afraid of taking a risk and stepping out into the unknown? You’re not alone. It’s not
uncommon for even experienced entrepreneurs to measure themselves against unreasonable
standards and see themselves falling short. For example, a successful entrepreneur in the UK once
admitted to me that he thought his business was a failure. This was unusual because there was no
doubt in my mind (or anyone else’s) that he was doing quite well.
‘How long have you been in business?’ I asked.
‘Sixteen years,’ he replied.
‘And how many similar businesses around here have come and gone during that time?’
‘Seven,’ he answered.
‘What about your salary? Do you make a good living?’
‘Oh yes,’ he replied. ‘I’ve got a nice car, I live in one of the better parts of town, and I usually
take two vacations a year.’
‘Tell me about your employees. Do they leave every few months or do they stay with you?’
‘All of them have been with me for years.’
‘I’m sorry,’ I said, ‘maybe I’m missing something. Where do you think you’re going wrong?’
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Do You Have What It Takes? — The Entrepreneur’s Guide to Building a Successful Business
He got the point. He was confusing his desire to do better with failure. Like so many people he saw
other entrepreneurs who had more of something than he did and he immediately assumed that he
was losing. The message? Be reasonable with your expectations and learn to view your business goals
as a staircase rather than a one-chance shot to the moon. This doesn’t mean settling for less, it means
being realistic and progressive when it comes to your aspirations. As one entrepreneur I interviewed
put it, ‘Tell your readers that the fear and insecurity of running a business never ends. Indeed, the
very concept of entrepreneurship involves overcoming the daily nagging dread that even after serving
a satisfied customer we are, in effect, unemployed until the next customer can be secured. It’s just
something we entrepreneurs have to learn to live with.’
The Other End of the Scale: Overconfidence
Wilbur Wright, the co-inventor of the airplane, once wrote to his father, when flying, I have learned
that carelessness and overconfidence are far more dangerous than deliberately accepted risks. Put another
way, the inventor of one of the world’s most useful devices firmly believed that a little fear is a good
thing. His contention is that fear keeps one in check. ‘Overconfidence can lead to misjudgment,
disregard, or the ignoring of good ideas and advice,’ says psychologist Amanda Druckerman. She goes
on to say that people who believe that they’re superior to everyone else (which is partly what defines
overconfidence) are often incompetent and self-deceptive, which opens the door to missing out on
opportunities.
Think about Druckerman’s words - and those of Wilbur Wright - when contemplating the oftreported line that the majority of the world’s business ventures involve little more than: (1)
manufacturing a product, (2) providing a service, or, (3) distributing or selling a service or product.
Advice from the Pros
By now it should be apparent that starting a business is an eclectic, all-or-nothing endeavor filled
with misconception, contradictions, joy, defeats, and advice (both wanted and unwanted). With that
in mind, this chapter has been concluded (as has every chapter) with the wisdom of entrepreneurs,
many of whom assisted in the writing of this book with their hard-won advice.
− In business, as in life, know that you cannot change what you tolerate.
− Be honest as to what you want and need.
− Accept the fact that some things in life cannot be taught, they can only be learned.
− Remember that fear is a gift. It is nature’s way of keeping you alert.
− Think of fear as an acronym: False Evidence Appearing Real.
− Make a list of what you are afraid of (it’s not so frightening now, is it?).
− Find out if others have experienced similar fears and what they did to overcome them.
− Tear up the list you wrote above.
− Know that there is no trust or safety where there are unanswered questions.
− Map out the direction you wish to take by writing down what needs to be done.
− Start moving toward your goal by gathering as much related information as you can and
adapting it to fit your prospective customers, your region, and the business-structure you would
like to begin. You have nothing to lose by educating yourself.
− To an entrepreneur, every day is a crisis (Philip Knight, founder of Nike)