July 7th, 2009 in Business, Education, Feature
As a graduate student, I learned many things. Some of the most important things I learned were not t...More
While psychology is a great degree by itself and can lead to you a great career, it is also one of t...More
Background & Overview
Entrepreneurs are the backbone of today’s society – even more so now than ever. Whenever the economy gets rough or things begin to tighten up, it is always the entrepreneurs that are the first to rebound and lead the way to recovery. In fact, during tough times, is when the smartest business people become the most profitable and go through the most rapid growth and expansion. This cycle has repeated itself many times over and is evident all the way back to the Great Depression. Yes, many lost a lot, but a record number of people skyrocketed their success during those very same times.
So, what’s the secret? Well, it’s never a simple answer, but in analyzing and studying today’s entrepreneurs there are many trends that can be recognized. And, the old saying was never truer than it is today – “If you want to get what a millionaire has, you have to do what a millionaire does.” The thing that most people miss, however, is that in order to do what a millionaire does, you have to understand what it is that he or she is doing and why.
Looking at the various statistics for entrepreneurs there are a couple that really stand out above the rest. The first is kind of shocking in some ways, but makes sense in others. Currently, the largest age group of entrepreneurs is in the 45 to 60 year old segment of the population. In a recent Vanderbilt University study, entrepreneurs ages 45 to 64 were expected to grow by 15 million by 2006. That compares to a four million decline in entrepreneurs aged 25 to 44.
Now that data is a couple of years old at this point, but still very statistically relevant. So why all of the growth in the elder generation? A lot of it can be attributed to having more assets disposable to them to help fund and jump start a new business endeavor. It is also very likely that in the their 40’s many realize that their current path is not going to get them to their goal and they are willing to take the risks necessary to become an entrepreneur that perhaps they were not willing to take at a younger age.
A second rather startling statistic is that 33% of all new businesses fail within the first two years. That number is much higher when you look at the first five years. The problem is that many young entrepreneurs are ignoring both of these statistics – and we know, statistics don’t lie.
So if the largest entrepreneurial age segment is over 45 years old and if one-third of all entrepreneurs fail in the first two years, why aren’t younger people reading between the lines and following the blueprint for success? The simple fact is that many of them simply do not know what all is involved and just how complex it can be (leading to the very high failure rates).
Key Character Traits
Before we dive into the skills and classes that you should be pursuing to increase your entrepreneurial aptitude, we first must talk about core principles that most all great entrepreneurs share. You could call them character traits or personality traits – whatever you like. But if you truly intend to be able to replicate what some of the new generation of entrepreneurs are doing, you need to understand a bit about who they are first of all.
Independent/Non-conformist - Successful entrepreneurs are very independent and don’t easily take no for an answer. They tend to have very strong ideas – frequently bucking traditional beliefs and so-called wisdom. Probably the strongest trait that they have is the recognition that they don’t know what they don’t know and they don’t try to do what they don’t know (they hire someone else to do it).
Many wannabe entrepreneurs miss the boat on that point; instead, trying to be the “Jack of all Trades” and doing (or trying to do) everything themselves! The near certain end result of such a tactic is either becoming completely burned out and flopping, or a small degree of success but the creation of a system that simply cannot grow or expand because of its inherent structural limitations.
Today’s entrepreneurs also recognize that time can be “bent”. They don’t limit themselves by traditional expectations of time and money – rather, they break the mold and find new creative ways to shatter old concepts of what is achievable within a certain time frame.
Have Passion/Drive - One factor that can’t be overstressed is the fact that most successful entrepreneurs absolutely love what they do. It’s not a J.O.B. to them – it is a passion! That passion is what drives them to the incredible desire to swim against the current and come up with fresh new ideas and perspectives that can catapult their business into rapid success.
Today, more than any other time in history, it is possible to go from nothing to mega-millionaire in record time. The Internet has created this massive ability to rapidly transform your income, exposure and career – virtually overnight (given the right set of circumstances). While this has always been true to a large extent, the Internet has hyper-accelerated this rapid wealth expansion phenomenon and there doesn’t seem to be any let up in sight.
Consider this list of the Top 40 Young Entrepreneurs under 30 years old. At the top of the list is Mark Zuckerberg, founder of Facebook. Mark is a mere 23 years old and yet has an estimated net worth of $700 million.
Look through that list and you will find many such twenty-something people all making millions or hundreds of millions of dollars. One key concept that every single one of these entrepreneurs shares is the ability to leverage their time. Leveraging means that you don’t trade your time for a wage. Instead, you create a product or service that can achieve huge levels of income and not be directly related to how many hours you work.
At #34 on the list is Rob Benwell, a 23 year old that makes $3.3 million a year – he fully understands the concept of leverage. He has several digital information products that, once created, make him money time and time again – regardless of whether he is physically working or not – that is leverage.
Core Entrepreneurial Skills
Having the right mindset and attitude is a big part of becoming a successful entrepreneur – but without the core skills necessary to be successful in business you will likely not get very far down your path and will likely become one of those 33% quick failures.
Learn Quickly from Mistakes - Consider the story about the ignorant businessman, the intelligent businessman and the wise businessman. The ignorant businessman makes the same mistakes over and over again with the same, and unfortunate, outcomes. Maybe those mistakes are not researching the competition or taking on bad business partners – whatever they are, the ignorant businessman repeats his or her mistakes, without learning the lessons from experience.
The intelligent businessman sees the errors of his or her past mistakes, learns from them and makes adjustments for the future. That is as far as most people go, but the key to becoming a true entrepreneur is to enter the last plateau – that of the wise businessman. The wise businessman not only learns from his or her own mistakes, but also learns from the mistakes of others – saving vital resources, time and money by not having to make the same mistakes others have made.
In order to foster the growth of your “wise” business approach, you need to study and develop certain skill sets that are absolutely imperative for a successful entrepreneurial journey. Most of these skill sets are easily expanded upon by taking some courses at your local community college or university.
Strong Command of Business Language
If you expect to be highly successful in business, you need to understand the language of business and have a firm understanding of how to effectively and intelligently communicate with your peers.
Remember the study above that found that largest sector of successful entrepreneurs was over 45 years old – well, there is some reasoning behind that truth. One of those reasons is that at 45 years and older, they are much more experienced with various business endeavors and already know how to talk the talk, but walk the walk as well.
Learn Quickly, Effectively and Efficiently - As an aspiring entrepreneur, it should be your first and utmost goal to become a sponge ready to absorb any and all business strategy and information you can. Many courses at your local college will help you in this endeavor, but don’t be too narrow minded in your search.
The communication and command of business language can be expanded in many forms – from English and speech classes to pure business and even debate classes. All of these subjects will help you expand your business knowledge, prowess and confidence.
Writing classes and technical writing classes can also be extremely beneficial. Effective communication is very important and much of today’s communication is technical in nature. The more successful you become as an entrepreneur, the more you will likely delegate and outsource your work. Doing so will require very detailed and poignant technical requirements documents. Taking the time to take a course to develop these kinds of skills will serve you very well later on in your journey to become the next Donald Trump.
An expansion of writing would be sales and copy writing. This may seem like a mere natural and simple expansion of basic writing or technical writing – no way. Becoming a quality sales writer is almost as much of an art form as a science. You will need to become skilled in the creative usage of wording and suggestive selling techniques as well as understanding psychology and NLP (nuero-linguistic programming) if you truly want to become an effective sales copy writer. Copy writing and fact checking are other vital, yet totally different, skill sets that you will master through the college experience.
You simply cannot be expected to be taken seriously if you cannot effectively and intelligently communicate on core business ideas and concepts. This doesn’t mean that you have to be a business major, but it does mean that you need to be very well rounded in your business and communication backgrounds. Great leaders are born from great communicators.
Finances and Accounting
Can you imagine a topic more important than finance and accounting for a fledgling entrepreneur? How could you possibly expect to amass wealth as an entrepreneur, if you truly don’t understand the mechanics of accounting and the general principles of sound finances? Financial management can be a bit more than it is initially thought to be.
Really understanding some of the limitations (many of them self-imposed) behind finance can open a lot of creative doors to your future. There are a lot of psychological money barriers that we impose upon ourselves – understanding those from a psychology perspective might have huge ramifications on your future earnings.
Psychology in general has many very applicable uses for business and is a great course to look into at your local college. Understanding some of the human behaviors and the “whys” behind core business issues can help you tremendously in your quest to become a great entrepreneur.
All great entrepreneurs are great salesmen (at some level, whether they recognize it or not). And all truly great salesmen understand very intimately the human psyche and behavioral patterns that psychology can help you to become aware of.
Accounting is a much more black and white subject, but is just as vital. As an aspiring entrepreneur, you will need to be in complete command of your finances and without an Accounting background you will have a tough time doing it. Again, this doesn’t mean that you have to major in Accounting, but you should have some general and basic understanding of the core account principals necessary to run a business.
To grow your business you will have to interact with many accountants and tax and business strategists and even if this is a weak point for you that you truly have no desire to do yourself, you still must be able to speak intelligently enough on the subject to be able to evaluate the proposals and suggestions you are given. Proper accounting is not rocket science, but it is fundamental to your business and you should give it the proper respect needed if you expect your business to respect you (with profit).
Corporate & Business Law
Leverage can be applied in many different forms. Leveraging your time has already been discussed, but leveraging your business from a corporate perspective is yet another approach. There are many different corporate entities – corporations, limited partnerships, general partnerships, limited liability companies – and many others. Each of these different business entities has unique benefits and drawbacks from a business law perspective as well as tax and distributions perspectives.
It is imperative that you learn enough about these different structures and entities so that you can best structure your own business as per your own particular goals and objectives.
This is further magnified when you begin to look into the tax consequences of conducting your business under the wrong type of business entity. We live in a very competitive world today and 5% here and there can be the difference between making it and becoming one of the 33% that don’t – you don’t want to be on the wrong side of that number. Holding onto your money can be equally challenging.
Many people, from good old “Uncle Sam” and the IRS to lawsuit happy money chasers are eager for you to bypass this step and just jump in without any research because they know most all of the loopholes – shouldn’t you as well?
Contractual law is yet another sub-division of business law that is vital to an entrepreneur. Today more and more businesses are moving away from employees and instead focusing on outsourcing and contractual workers. This can really lead to some incredible savings by avoiding the costly demands of employees – however, it is not without its share of risk and potential pitfalls. You need to be thoroughly versed in the key ingredients of contractual law so that you don’t make any of those big mistakes that can’t be undone. There are a lot of very specific tax code laws, for example, on how to properly classify and treat independent contractors – ignore them and you will find yourself paying a lot of back taxes and fines.
Are you going to become a lawyer yourself? Probably not as it is not necessary, but a general knowledge of contractual law will serve you very well in helping you to avoid some of the major land mines.
Lastly, when it comes to business law, you have to think about asset protection. Here in the United States we live in a very litigious society. Rest assured that as you start your climb up the entrepreneurial ladder, there will be many looking for opportunities to knock you off a wrung or two. By combining an understanding of business law with corporate entity structure and asset protection you can formulate a business entity structure that will help you to be successful as well as protect yourself from frivolous and malicious lawsuits.
There are several different courses at your local college that can help you will all of these ventures. From the standard business courses to business law and even business tax courses – the more that you can educate yourself in these areas before you launch your own business, the better. Many of these decisions, once made, can be very costly and difficult to undo, so do yourself the favor of investing your time upfront to avoid these potential land mines.
Remember to follow the path of the wise businessman and avoid the mistakes of others. Many have lost everything – millions and millions – to a single lawsuit that they could have easily protected themselves from with some basic asset protection strategies and business entity understanding.
Time Management and Organization
Learning to properly manage your time is an essential trait necessary for being successful in any business endeavor, but it is even more essential to the budding entrepreneur. As an entrepreneur, you won’t have a boss looking over your shoulder telling you what to do and when to do it – that’s great, or is it? You see, many people simply do not do well without a strong sense of direction and leadership to push them along the course. The life of an entrepreneur is vastly different because you will have to become your own motivational force – this can be a great challenge for many.
There are many classes in college that will help you with your organizational and time management skills but even more importantly, just the process of going to college will help out tremendously in these areas. The whole process of college is all about being independent, on your own and making the right choices (late night party? or more studying for the final?)! This experience will help you a great deal in learning to budget and control your own time and reaping the rewards or suffering the consequences of your decisions.
As discussed earlier, leverage ,especially time leverage, is a tremendous key to the success of today’s entrepreneurs and there is no better way to learn this than through proper time management and organization. It is a lesson quickly learned in college – and to do well in college you must master time management and organization – just like in the entrepreneurial business world.
There probably isn’t a bigger subject to tackle for a wannabe entrepreneur than marketing. You see, there are a lot of great ideas out there. In fact it is said that there are no original ideas – meaning that probably hundreds of others had the same idea as the founders of Google – but, did they implement their ideas? You see having a great idea is not enough, you must be able to effectively implement it – and generally that means selling something. To sell anything, you must be able to effectively market it and that is where several college level marketing courses could really come in handy to jump starting your career.
Marketing is often misunderstood and today, especially on the Internet, it has taken several new forms – web 2.0 marketing, attraction marketing and several others. Marketing really comes down to targeted exposure – exposing your product or service to a very select group of individuals who are highly likely to become customers. Learning how to effectively find and/or create those “targeted customers” is what marketing is all about. But more than that, it is a mindset and a philosophy of how to approach customer acquisition all together.
There are many good books on marketing as well and it is a subject with a lot of strong and diverging opinions, so you definitely want to do some of your own research in this field as well. Marketing can be very trend oriented – what works today may not work tomorrow – so make sure that you approach the concept of marketing as a continual learning process. This isn’t basic algebra where you learn it once and move on. Marketing is a constantly moving target and to continue to hit that target you need to adapt to the newest trends and market research.
Marketing is also about getting to know your customer. You can’t begin to address the needs of your customer until have a full and through understanding of what it is that your customer is looking for and what their situation (economic especially) is towards acquiring your product or service.
Leveling the Playing Field with Technology
Today you need to have every edge you possibly can in order to get ahead of the next guy – especially true for high aspiring entrepreneurs. You will need a strong technical background and familiarity to exploit technology to your best advantage. College provides a very solid core background of technology – from basic office packages, to high tech drawing and cad work, to content management software, to programming and office automation software – it’s all there waiting to be explored.
Technologically Savvy - So jump in with both feet and immerse yourself with technology. The savvier you become, the more you will begin to think out of the box to resolve problems. For example, it is common practice for a software developer to try and improve the performance of a given chuck of code (or algorithm). But, it is also commonly known, that improvements of less than 50% are rarely even noticed by the average user. So, if you have a task that takes four seconds, you need to cut it down by half in order to be any perceived difference to the user. This level of improvement does not come from simple “refinement” – no, not at all. It requires the programmer to completely step out of the box and rethink the entire problem and solution. This type of thinking is what is encouraged in the college technology environment and is key to your development as an entrepreneur.
By learning what technology is available to you, you will begin to broaden your horizons of thought around problem solving. The next level of understanding then becomes how to combine technologies to generate even more rapid changes. But being able to go to that next level, means first having a basic and functional understanding of the first level of basic technology awareness. Start out by crawling, then walking and then we will begin to go running with technology at your side.
Math – It’s All in the Numbers
Math clearly has its place in any business endeavor, but even more so in today’s high tech world. This is not accounting math, but just general ability to rationalize and reduce complex concepts into mathematical equations that can be addressed and solved.
As an entrepreneur, you will have to do a lot of “what if” analysis about whether a particular venture makes sense to embark on or not, for example. Of course you don’t have to be a math major in college, but you should have some good basic backgrounds in business math, algebra, statistics and other pertinent math related courses.
Problem solving skills with math are often overlooked but they can dramatically reduce the time you spend chasing after invalid assumptions. Learning to reduce a set of variables into an equation that you can solve or estimate can really knock some of your wasted time away – and that leads to more enhanced productivity and better results.
Be realistic about the world we live in today – it is very high tech. Math plays a very high roll in today’s entrepreneurial business venture and being strong at least with the basic college level math will give you that added boost you will need. Again, sometimes it is not about being able to do it yourself, but you want to be at least able to articulate to others what you problems or concerns may be. Furthermore, statistics is something that will help you throughout your business career and it other aspects of the business as well such as marketing.
One way that successful entrepreneurs are able to leapfrog over many competitors is their willingness to involve and participate in mastermind sessions. A mastermind session is a group of individuals that the combine forces to brainstorm on a particular subject or idea. This can be very helpful in dramatically reducing the time involved in bringing a product to market, for example. These brainstorming session allow various feedback all simultaneously, rather than serially, and this can be much more productive. However, a mastermind group is only as effective as the members of the group. That’s where interviewing skills come into play.
Many colleges have courses teaching you how to improve your abilities during the interview process, but what if you turn the tables and instead focus on learning how to become a better interviewer? Your ability to cut to the chase and sort out those that are worth your time and those that are a complete waste of time will be a huge benefit in your entrepreneurial quest. It all comes down to time and being productive with your time. Learning how to interview others is a key skill for an entrepreneur because they will likely surround themselves with people that can do much of the basic work so that the entrepreneur can be freed up to create new projects and visions.
But in order to be able to effectively delegate this work out, there has to be a solid structure of trusted employees or contractors in the middle that can be relied upon. Learning how to evaluate character and talent can be a vital asset. The quicker and easier you can grow your trusted team of advisers, the quicker you will be off of the wannabe chair and into the real realm of the entrepreneur.
Negotiating Your Way to Success
Much of what a great entrepreneur does is some form of negotiation. By their very definition, entrepreneurs play outside the rolls of traditional businessmen and therefore their ability to connect with other people and negotiate and structure mutually beneficial deals is vital. College can help in several ways here from speech, writing and communication courses to debate classes. Debate and political science courses can be extremely effective at transforming an average negotiator into a skilled negotiator because you will be forced to see a problem from various angles.
Understanding not only your customers, but also your suppliers and your employees, etc… will give you an leg up on your competition who might have become to obsessed with running the business to actually observe the business and learn from those interactions. Successful negotiation comes from being able to see both sides of the table and then being able to stitch together an offer that appeals as a “win-win” solution to both sides. Much more so that for a normal businessman, the entrepreneur will depend heavily on this ability to negotiate – it’s part of the lifestyle!
Leadership and Inspiration
Being able to inspire and lead others is a cornerstone of entrepreneurship. Simply put, if you’re not working for a boss than you are the boss which means you need to be an effective and inspiring leader. Most people do not want to be leaders. Most are comfortable following a leader that they know and trust. It is your job as an aspiring entrepreneur to appeal to that desire to be led and guide those employees towards a successful path. Your success, to a large extent, will not necessarily be measured in what you personally achieve, but in what you help others to achieve. Think about that for a minute and let it settle in.
As an entrepreneur, you must learn to outsource as much as possible so that you (one person) do not hinder progress and you leverage your efforts as much as possible. So, the more effectively that you can lead people to help you achieve your goals, the more successful you will be. There are many leadership courses taught at most colleges and there are also many extracurricular activities that you can involve yourself in that will enhance your leadership abilities.
As the saying goes, “either lead, follow or get out of the way”. Well, as an entrepreneur, you need to be on the “leading” side of that equation if you expect to have success. Leadership, contrary to what most people believe, is not something you are born with so much as it is something you learn to do but it does take effort.
Becoming an entrepreneur can be one of the most rewarding decisions of your life. Understanding how to separate yourself from the rest of the rat race and put yourself in control of your own life is incredibly empowering. By choosing this path, you are giving yourself the ability to control your own destiny rather than simply choosing to work for someone else. The downside of it is, however, that you will have no one but yourself to blame for your failures. Therefore, you need to mitigate the risks of failure, by educating yourself in the key fields necessary to become successful.
You will not and cannot be a “Jack of All Trades” as an entrepreneur – you will need to focus on what you do best and hire, contract and outsource others to do those things that are not your forte. However, that does not dismiss your responsibility to have a well-rounded education and familiarity with various core business topics. You need to be able to effectively and intelligently communicate on those topics if for no other purpose than to properly evaluate those that you hire. If you don’t have the most basic understanding of accounting, how can you possibly search for the proper qualifications for a crucial and strategic business account for your new endeavor?
The point of this article is to illustrate that an entrepreneur, while a specialist, must still be very well rounded in his or her education in order be able to see all sides of the issues in front of them. Successful entrepreneurs are able to effectively wear multiple hats and shift from role to role as necessary. They surely won’t be an expert in everything, but they know enough to surround themselves with great talent and know how to evaluate that talent. By leveraging the efforts of others, they can boost their own performance as well as free themselves up to pursue other endeavors as well.
While not all may be cut out for the entrepreneurial lifestyle, for those that are, it can be extremely rewarding and provide freedom and flexibility far beyond the cubicle walls of any corporate job. It will, however, take discipline and a great deal of self-control in order to keep yourself on the right track and focused on the target. You will have to shuffle between a lot of different skill sets and responsibilities and using your college education to create a strong foundation is clearly your best bet for long term success.