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Do you have what it takes to be a successful entrepreneur? A good idea for a new product or service is not necessarily enough. It takes a special kind of person to turn dreams into reality and ideas into dollars.
Besides having a little luck and the right skill set to operate a business, there also are some personality characteristics that successful entrepreneurs have in common.
Over the years, many studies have been done to try and identify what traits separate successful entrepreneurs from those who do not find their pot of gold. While a list of positive personality attributes could be extensive, a couple of key traits include being a risk-taker and having a passion for your business. Entrepreneurs tend to also have an exceptional ability to work hard and an inordinate amount of self-confidence and self-discipline.
In 2005, according to the U.S. Small Business Association, an estimated 671,800 new businesses were spawned in the United States. That same year, there were an estimated 544,800 businessmen and businesswomen who closed their doors--39,000 of them declared bankruptcy.
Also in 2005, Alaskan-owned companies (those having employees) numbered 16,921; an estimated 97 percent of which were small businesses. In that same year, about 2,000 new businesses came into being--a jump of 7.3 percent over the previous year. Bankruptcies also jumped in 2005 by nearly 30 percent.
Small business owners (entrepreneur) play a major role in both the state's economy and the prosperity of Alaska's work force. Again, in 2005, non-farm proprietors' income increased by 9.5 percent to $2.5 billion.
THE DEMONS
Normally, no one intentionally starts a business to fail, but there are many demons waiting to snatch the brass ring from the fingertips of a fledgling entrepreneur. Still, Alaska offers a fertile ground to plant the seeds for a successful business.
Regardless of how fertile the ground is, starting a new business involves risk. This does not include the risks established business owners face on a daily basis. The risk that new entrepreneurs experience is that of surviving. The common rule of thumb is that those businesses that survive their first three years will live on and prosper.
"There are no guarantees when someone starts a new business," said Olivia Lorenzo, business counselor and multi-program specialist for the Alaska Small Business Development Center (ASBDC) in Anchorage. "There are people who have sold everything and still come up empty-handed; they've put up their lifesavings, their homes, and even their pensions."
To most people stability is of vital importance, but for the entrepreneurs, it is a little different, according to Jo Michalsky, owner of Classic Woman and Portfolio boutiques in Anchorage. Michalsky has been an entrepreneur most of her adult life. She has had various kinds of retail stores from a childrens' bookstore to her current womens' boutiques.
WHAT IS IMPORTANT
"I think people have to look within themselves and analyze what is important to them," said Michalsky. "If having a steady paycheck and piece of mind knowing they have a steady job with a paycheck, insurance and all the features associated with stability (is important), they should think seriously before becoming an entrepreneur. I don't think that stuff is of the highest priority to those folks with a true entrepreneurial spirit."
Willingness to make those types of sacrifices may be a key difference between a successful entrepreneur and the successful business executive.
"I'm sure there are people in the corporate world who are smart enough to be successful entrepreneurs and could do it if they wanted to," said Debi Fowler, Anchorage center director for the ASBDC. "The only difference is they also are smart enough to know that it's too hard and just don't want to do it. I can understand that."
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Having the passion for what they are doing is another important trait. There are basically two kinds of entrepreneurs: the serial and the lifestyle. The serial entrepreneur gets satisfaction from starting a successful business. And once it is up and running, they will sell it and move on to start another company. Serial entrepreneurs are in the business of starting businesses.
The lifestyle entrepreneurs start a business because they get the satisfaction from the product or service they provide. An example of that would be someone who wants to be a fishing guide or own a pottery shop. They start the business because it is what they love doing.
DO YOU HAVE PASSION?
In both cases, the one trait both types of entrepreneur have is a passion for what they are doing. There is almost nothing else that they would rather be doing than running their business.
"I completely agree with that," said Roy Briley. Briley is the owner of several successful businesses in Anchorage. They include Real Estate Brokers of Alaska, Roy Briley Insurance Agency and a condo association management company. He, and his wife, Tina, also recently opened a high-fashion womens' clothing boutique in downtown Anchorage.
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Briley says, "To be successful, I think you have to have more drive and ambition than the average guy on the street. To put it in terms of character traits, I guess it would be passion.
"You must be passionate about your work. I know I am. Other than spending time with my wife and kids, there is nothing else I want to do besides work, doing what I do. You have to be excited about your work. If you don't have the passion to get up in the morning when it is minus 20 degrees outside, and look forward to hard work, often for long hours, chances are pretty good your business won't survive. Being an entrepreneur and running a business is not a 9 to 5, five-day-a-week job. And, if you think it is, you start off on the road to failure."
Mike Kangas, president and general manager of AIH (Alaska Industrial Hardware Inc.) also emphasizes the importance of having passion for what one does. He also says passion and hard work go hand-in-hand.
"You have to enjoy coming to work everyday," said Kangas. "If you have the passion you will be willing to work hard. And if you are looking for a 40-hour work week, you'd better go and work for someone else because being an entrepreneur is probably not for you."
MAKING THE SACRIFICES
Lorenzo takes that thought a few steps further. She says entrepreneurs must have the passion for what they are doing because of the long hours and no guarantees.
Fowler adds to that by saying, "You probably will be working all week, from eight in the morning to eight at night, making presentation and marketing your product or service. On weekends you still won't be able to take much time off because you will be doing the administrative paperwork. And to add to all the hard work for an extended time, you possibly won't be getting any time off or a salary for a year or two."
With all the hard work, long hours, plus the risks one takes and mistakes one makes to become a successful entrepreneur, the final trait he or she must have is healthy dose of self-confidence.
John Niles Wanamaker of Anchorage identifies himself as a venture capitalist, and one of the founding partners Venture ad Astra. Venture ad Astra helps companies and primarily works with high-tech companies. Wanamaker also works with Seattle Northwest Securities, a company that focuses on setting up public finance projects, like bonds, for city and state governments.
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Wanamaker says self-confidence is extremely important.
"Every successful entrepreneur must have self-confidence," said Wanamaker,
"It's their confidence to make the decisions related to their business. And when he makes a bad decision, it doesn't cause him to quit altogether. Most entrepreneurs consider their mistakes as learning experiences.
"The mantra of a successful entrepreneurs could be: Read, Shoot, Aim," adds Wanamaker. "They don't want to analyze everything to the smallest detail because they might find out something that could scare them into no action."
Robert P. Peterkin II is a third-generation Alaskan, plus a third-generation entrepreneur. He currently owns four businesses: R&K Industrial, Etigun Inc., Metalizing Inc. and Mike and Robert Properties.
SELF-CONFIDENCE
Peterkin also agrees about the importance of having self-confidence. It gives him the strength to survive difficult times and mistakes he has made.
"I don't like to tell anyone, but I have lost a lot of money over the years," Peterkin admits. "But like I said earlier, I've made a lot more money than I've lost. When I make a mistake, my courage and confidence is there to help me succeed overall.
"For example, a few years after I started R&K Industrials, back in the early 1980s, I ran into some problems with a project we were doing with a major oil company. Those problems ended up costing me $300,000. I then went to the bank and got a loan that helped me to resolve the situation.
"The important point here is I had the confidence to keep going during that difficult time period. When something like that happens, I chalk it up to a learning experience and don't get down on myself. I think as time goes by you get more experience. And the more experience you get, the more confidence you build and the better businessman you become."
SELF EVALUATION
So before starting, take a few minutes and do a self-evaluation. How do you feel about taking major risks? How much passion do you have for the type of business you want to start? Also, are you willing to work those long hours, with little or no time off, for an extended period of time, with no guarantee for success and a possibility to lose your investments? And finally do you have the confidence to carry on through the difficult times?
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