You've always dreamed of running your own business. Yet the task seems daunting. Not to worry: If your fundamental motives for becoming an entrepreneur are solid, your business will be stronger as well. Before you dive in, check out the following 12 best reasons for starting a business.
1. You'll be doing what you enjoy. "Getting a business off the ground is hard work, yet most successful entrepreneurs enjoy the fun and challenge of doing what they love," says Chuck Matthews, an associate professor of management at the University of Cincinnati and director of its Small Business Institute.
2. You've identified a market niche. Matthews calls this "opportunity recognition"--the ability to recognize a distinct, previously undiscovered need in the marketplace. Farsighted entrepreneurs see what no else sees. How many times have you heard someone scoff when a new product is introduced, saying "I could have done that"? The point is that they didn't, because they weren't motivated enough to move forward and actually produce it.
This doesn't mean you have to invent a better mousetrap. "Often, it's a better and less expensive cereal, or a service that's more reasonably priced that attracts more buyers," Matthews says.
Ron Hall, state director of the Michigan Small Business Development Center at Wayne State University in Detroit, agrees. "Your knowledge of an industry provides you with a strategic advantage to identify and benefit from market opportunities," he says. "For example, imagine that, as an agriculture industry insider, you come up with a way to market whole wheat directly to the consumer. You see that consumers are willing to pay a premium for food items produced and harvested free of chemicals. You also notice that health-food stores are opening rapidly. You know you can package whole wheat in 5-pound burlap sacks and sell them through retail stores, mail order and health-food Web sites."
Even in an ideal situation such as this, remember that identifying a niche is only the first step in starting a business. Once you've identified that niche, you need to find out whether you can make a living from it. "An avid golfer may see a market for designing light, high-tech golf clubs. A fly fisherman may see a market for a newfangled fly," says Matthews. "But are these needs strong enough to sustain a business?"
3. You're not easily dissuaded. The market isn't waiting for your product with bated breath. "In fact, start-up entrepreneurs are often shocked when they encounter the forces working against them, such as criticism and competing products," says Matthews. To get your business going, you must nudge your way into the marketplace. That requires the three Ds: drive, determination and diligence. How did Henry Caruso compete against car rental giants like Hertz, Avis and National Car Rental when he launched Dollar Rent A Car (then called Dollar a Day Rent a Car) in 1966? First, Caruso offered Volkswagen Beetles for the incredible rate of one dollar per day plus mileage. After that, he introduced other models and began to compete with the major companies. The rest is history.
4. You have a strong need for independence. Some of us need independence more than others, observes Jeffrey A. Bernel, director of the Gigot Center for Entrepreneurial Studies at the University of Notre Dame. Prior to teaching, Bernel ran his own automotive-parts business for 24 years. "Some of us have an almost innate need to call our own shots, make our own mistakes and learn as we go," Bernel says. "These are the people who stand a good chance of succeeding in their own businesses. They enjoy discovering things on their own and long for total control of their destinies."
5. You perceive failure as an excellent learning experience. Most successful entrepreneurs can recall a slew of mistakes, botched deals and products that never caught on. But rather than throwing in the towel, they evaluated their blunders, extracted the pertinent business lesson and did it right the second time around. "It's called learning from failure," says Bernel. "Thomas Edison enjoyed telling people he failed more than 2,000 times while making his light bulb. Failure was a powerful motivator because every time he failed, he learned something new."
6. Owning a business has been a longtime dream. Many successful entrepreneurs actually fantasized about running the businesses they now lead. S. Truett Cathy, founder and chairman of Atlanta-based Chick-fil-A, once said he had dreamed of opening "a chain of restaurants that were easily accessible." Chick-fil-A is now the third-largest quick-service chicken restaurant company in the United States. The chain boasts more than 760 restaurants in 35 states as well as Canada and South Africa.
7. You have a passion for your product or service. Bernel believes Confucius' assessment that "if you love what you do, you'll never work a day in your life." What better example than Wendy's founder Dave Thomas, who has repeatedly attributed his success to his love of hamburgers. Yes, he was an astute businessperson who made a number of smart moves. But the bedrock of his success was an unwavering love for a well-cooked burger with all the trimmings.
The same passionate involvement with a product or service holds true for every entrepreneur who achieves large-scale success. Take Henry and Richard Bloch, co-founders of the ubiquitous tax services company, H&R Block Inc., founded in 1955. The brothers Bloch were passionate about providing working people with inexpensive tax advice from seasoned professionals. They did just that in 1955, charging $5 to prepare a tax return. Forty-four years later, the company now serves more than 18 million taxpayers and has nearly 10,000 offices throughout the United States, Canada and Australia.
8. You are a take-charge person. Entrepreneurs are born leaders--they enjoy doing their own thing. "Essentially, leaders have a vision that propels them to make things happen by enlisting the help and support of others," Bernel says. "They can motivate people to buy into their mission."
9. You fully understand that the customer is number one. "That's Marketing 101," asserts Bernel--and the starting point for a successful business. "It's pretty simplistic, yet all entrepreneurs, especially in the start-up phase, must understand the customer is the judge and jury for your product or service. He or she decides whether you pass or fail. Everything must be customer-driven."
10. Knowledgeable investors are willing to financially support your idea. Many entrepreneurs must go it alone and use their own funds to launch their businesses, but you're ahead of the game if a bank, venture capital firm, or even friends and family are willing to give you the financial catapult to get your company off the ground, says Elizabeth J. Gatewood, director of the Johnson Center for Entrepreneurship & Innovation at Indiana University in Bloomington. "Technology companies, for example, have more success than the average company because they're often supported by venture capital," she says. If your idea is deemed worthy of financing by others, you're off to a good start.
11. You've been downsized. You may have been hoping to go off on your own but were afraid to leave a secure job. Then one day the unexpected happened: You got axed. For many, it's an opportunity to test their entrepreneurial wings, says Hall. "But all the variables have to be in place," he adds. "That means identification of a market niche, adequate funding and the knowledge and positive attitude to strike off on your own. A strong corporate background has helped many entrepreneurs succeed. Depending on your corporate rank and level, benefits packages can often defray some of your start-up costs."
12. You have a strong network of business advisors. A solid support network of friends, colleagues and business associates has been the impetus of many successful businesses. "No matter how independent you are, don't try and go it alone," says Bernel. "The more support you have from knowledgeable pros and mentors, the better your chances of success."
Bob Weinstein is the author of 10 books and is a frequent contributor to national magazines.