After the recent deluge
of layoffs, the pessimists will find Cheetos and TV Guide, the optimists
will find opportunity -- and for many, this opportunity will take
the form of a small business. True, it's a tough economic climate
for success, but small-business owners are inherently optimistic.
After all, even in a solid economy most businesses fail, so you
have to be optimistic just to believe that yours will be different.
The good news for those contemplating small business
is that if you dump what you loathe and do what you love, you're
more likely to end up rich. Because people do what they love with
passion, and when you have passion in your work, you do exceptional
work. Besides, when it comes to being a great business leader, no
one ever got there by complaining about his or her job. It's also
fun to be the boss: you pick the flavor in the coffee maker, you
pick the location of your office, you pick the employees and you
fire the people who bug you.
So it might seem like a no-brainer to you: Your job
is shaky or nonexistent and your dream of your own small business
beckons. But starting a business is very high risk. So before you
toss out that help wanted section, think about whether being the
head of the company is worth stomaching the risk.
One way to minimize risks is to honestly evaluate
what you really have. Here is a list of the things you must have
in order to make the financial risk of a small business a reasonable
1. The seed for a business
A good business requires a good idea (read: marketable)
that leverages your talents. Just because you like the idea doesn't
mean there are buyers, so do some research. And just because your
mom thinks you're talented doesn't mean you are, so find a small
business mentor and ask her.
2. The personality of a leader
This means you like people and people like you -- so you
can get them to do what you want. You need to be able to make fast,
confident decisions and you need to be organized so that people
have clear direction from a clear-headed thinker. Remember that
when your product launch flops, you are the one who will have to
tell everyone why the company is still on the road to success. If
you don't have the traits to rally the troops, you need a business
3. Boundless energy
When you own the company, you set the pace, and you set
the standards. Remember the day at the office last month when you
were upset about your personal life, and tired from the night before
and didn't feel like working so you surfed the Internet all day?
It was nice -- so relaxing. This will not happen when you own the
company. Most small-business owners work 80-hour weeks and wish
they needed less sleep.
I had these traits. And I started a business. I raised
funding, I hired employees, and believe it or not, the company was
a success and I was able to cash out. But my cost was high. I worked
almost every waking minute. When cash flow was poor, I worried not
only for my own paycheck, but for the paychecks of the employees
who were feeding families and fending off creditors. When cash flow
was good, deal flow was heavy and my workload doubled when I thought
I was already maxed out. While I was negotiating the sale of my
shares, my hair started falling out. I didn't even know this happened
to women, but apparently it does, usually from stress.
But remember what I said about small-business owners
being optimists? Well, I bought some Nioxin to get my hair to grow
back, and once I regained my former full mane, I started another
It failed. And I lost a lot of the money I took away
from the first business. There are a lot of reasons for the failure:
Bad timing, bad economy, and maybe, in hindsight, bad idea. But
I had good mentors, and they told me how to fail well:
Minimize the risk to your
I invested only the money I had to lose. I had no kids,
no mortgage and a solid retirement fund. I lost my loot from my
first company, but I didn't lose my shirt. Think of starting a business
as gambling: When you go to Vegas, you never bet your plane fare
Minimize the risk to your
I maintained contacts who could help me get a job if I needed
one. And I enlisted a resume-writing service to help me frame my
business flop as a career hop onto the next level of management.
Most business leaders have failed once or twice in their
lives before they hit it big. Think of your failure as a stepping
stone and step quickly and assuredly -- if things are going poorly,
fail fast with the first idea, learn, and get another idea.
That said, I am not sure I'd start another business
now. I have a kid to support now, and I do not have the financial
cushion that would enable me to lose a lot of money at another venture.
But the thrill of running my own business was unlike anything else
I've ever done. The all-consuming nature of the responsibility is
something I would not have known I could handle unless I tried.
And the knowledge that I built something from nothing is a reward
independent of the money.
So for those of you who have the right personality
and can stomach the risk, I say bring it on! You will be pleased
that you turned economically trying times into an opportunity for
fulfillment. And remember, even if you fail, statistically you are
most likely to succeed when you are doing something you love.
-- Updated: March 23, 2004