Riddell: Entrepreneur needs good ideas, hard work

Riddell: Entrepreneur needs good ideas, hard work

June 1st, 2010 by John Riddell Jr. in Business Diary

While the nation's unemployment numbers continue to hover around 10 percent, starting your own business continues to have a definite allure for many. While the causes for the allure might be very different for different folks, there are three constants that I try to make sure are addressed by potential entrepreneurs.

When asked what I consider to be the most important factors in determining the success of an entrepreneurial adventure, I always start with two obvious yet often overlooked requirements. The first is the need for a good idea. "Good" is defined as addressing a customer need better, more quickly or more cheaply than how that need is being met today. Along with that, customers have to be willing to pay you more for this solution than it costs you to produce or deliver it.

As simple as this sounds, self-delusion can be a dangerous trap, one that many fall into and one that unfortunately can consume significant financial resources.

The obvious keys to avoiding this pitfall are sound research, the willingness to listen to unbiased opinions, and the strength and personal conviction to accept information that you may not like.

The second most important factor has to do with understanding the real magnitude of effort that is required to be successful in your own business. Running your own show is hard. Benefits such as days off, vacations, "normal" hours during the work week, none of these are any part of the self-employed contract. Resources are always tight so there is usually no option for the delegation of an unpleasant task. "If it's to be, it's up to me" covers everything from selling to collecting to paying bills to sweeping floors.

Sometimes it feels as if adrenaline is all that keeps you going, that and an almost perverse fear of failure. Some people have the mental and physical constitution to handle such a demanding pace, others do not.

The third major constant I suggest that all aspiring entrepreneurs consider is their tolerance for risk. By its very nature and as the numbers consistently prove, starting your own company is extremely risky. Knowing and accepting that the impact of today's decisions and actions will have an unknown consequence for tomorrow's results can be a justifiable cause of excessive heartburn for many individuals. Yet this is the reality of starting your own company. In addition, I strongly encourage budding entrepreneurs to take stock of this same risk tolerance with those on whom they count for support. It is a difficult life indeed when one spouse is out risking the family's financial future every day while the other is desperately seeking or needing financial security. Sooner or later something will give.

Entrepreneurship continues to be the single most direct path to wealth. From its freedom of action to freedom of decision to accountability of outcomes, these are all enticing adjectives for the entrepreneurial way of life. But I strongly suggest that these enticements are the result of good ideas, supported by hard work, both underscored by the very real belief that there are no guarantees in life.

John F. Riddell Jr., director of the Center for Entrepreneurial Growth-Hamilton County, writes every other Tuesday about entrepreneurs and their impact on companies and the marketplace. Submit comments to his attention by writing to Business Editor John Vass Jr., Chattanooga Times Free Press, P.O. Box 1447, Chattanooga, TN 37401-1447, or by e-mailing him at business@timesfreepress.com.