Much is made of spurning a day job in favor of stepping out on your own to setup shop. Launching a startup is glamorized by society, and aspiring-entrepreneurs entering any field even remotely related to technology are lauded (at least in their own minds) as the next Mark Zuckerberg. The anointing of oneself as a social media expert or a content marketing guru has become an absurdity, with these “jobs” involving little more than regurgitating crap constantly on numerous social media platforms.
In reality, starting a business is a monumental challenge, and the odds of failure are far greater than those for success. Nevertheless, self-employment is commonly viewed as part of the “American dream”, and it remains an attractive alternative for earning a living to many people. If you are considering the entrepreneurial leap, you may be searching for options to mitigate risks associated with striking out on your own (I know I did). Unfortunately, there are no secrets that guarantee success, as risk is a prerequisite for achieving a profit.
However, I have learned a couple of important lessons that universally apply to self-employed professionals and small business owners regardless of your specific industry or niche. Each of these “lessons” require deliberate practice and follow-up action, but successful mastery of these topics will improve your ability to manage your firm from a strategic and financial standpoint. In short, they can significantly increase your chances of entrepreneurial success.
- Be prepared to adapt to an ever-changing environment. Starting and operating your own firm is a journey filled with twists and turns, and there will undoubtedly be roadblocks and setbacks along the way. Instead of becoming frustrated or discouraged by such occurrences, adapting to a dynamic environment requires experimentation with new ideas, learning from mistakes through trial-and-error, comparing actual results to anticipated outcomes, and applying knowledge to strategic decisions moving forward. According to psychologist, Carol Dweck, developing and maintaining a “growth” mindset is essential to success in this type of an environment. A “growth” mindset can be described as an attitude of self-confidence and belief in yourself that you can improve in your field by giving maximum effort. People with this type of attitude/mindset embrace challenges because they perceive them as opportunities to learn and grow.
- Create multiple income streams within and outside of your primary business. Creating multiple streams of income is commonly portrayed as an advanced strategy for building long-term wealth only available to highly-accomplished, financially-sophisticated individuals. In reality, establishing multiple income sources can be a pretty basic concept, but it is paramount to success as a small business owner. For business owners and self-employed professionals just starting out, the most logical starting point for creating multiple income streams is within your primary business. This can be accomplished any number of ways, but common strategies include offering diverse services/products (within your industry niche) based on the needs of a target market and adding a new offering to your product/service mix targeting a particular market demographic. Keep in mind that the needs and values of your target market will most likely evolve and change over time, and it is your responsibility to adjust your company’s product/service mix accordingly. It is worth noting that a new offering does not have to be restricted to individuals or businesses that aren’t existing clients of your firm. In other words, the new service/product could target existing clients because it represents a complementary add-on to a popular service/product. Creating income streams from investments outside of your primary business can be a tricky proposition, as it may require venturing into an industry that is unfamiliar to you or relinquishing control of your capital. That said, this form of investment is commonly used for investing in real estate and joint ventures, among other things. Generally-speaking, I advise first-time business owners and self-employed professionals refrain from outside investments until their primary business has attained sustained stability from both a financial and operational standpoint.