Is There An Entrepreneur in You?

from Christine Harvey

Two questions I’m asked continually are “What kind of business should I start?” and “How do I know I can succeed?”

Whether I answer a reader of my book $14.95 book, In Pursuit of Profit, or a member of our Advanced Women’s Wealth Building Institute who has bought an $800 ‘Take The Leap – Commercial Real Estate Investing Curriculum,’ the answer is always the same.

There are 3 CRITICAL components to consider…

First, what is YOUR PERSONALITY and what kind of business suits that personality. I’ve seen hundreds of entrepreneurs create a business that they ended up hating, simply because they did not consider their own personality thoroughly enough. Then they felt stuck - often worse than they did working for someone else! Ask yourself: Can you stand the hours required? Are you a people person, and is this a people business? Does it require extensive selling (most businesses do,) and do you know how to sell, and more importantly, do your like selling? An excellent tool for determining your personality and work style preferences is the Kolbe Profile. You can do it on-line for a reasonable price and get immediate results. You can even test your prospective employees and see how their profile matches or detracts from yours.

Mr. Morita, founder of the Sony Corporation, said that ‘ideas are a dime a dozen.’ The mistake would-be business owners make is to think that they need a good idea in order to be rich. That’s false. In ‘The Millionaire Next Door,’ research shows that millionaire business owner are people who run a standard business, but do it better or with a unique twist to it. So stop looking for a good idea, and ask yourself what fits your personality in terms of a business, and then set out to do it better or differently.

Second, COUNT THE MONEY in advance. I can’t tell you how many people I’ve met in audiences I’ve addressed around the world who neglected this step. What do I mean by ‘Count the Money?’ It’s simple. Add up all the expenses, then add up how many products you think you can sell a day. Get your monthly totals on both and then you’ll find out if there is a profit potential – AND whether there is enough money left for you to have a salary! You would be surprised how many people have a serious hobby instead of a profit. I even had a doctor tell me that he had a $40,000 a year hobby. He explained that instead of retiring, he cut his patient load. But since he couldn’t cut his office, staff or insurance costs, running his practice was costing HIM $40,000. But he loved his patients and his practice, and felt it was worth it. Well, that a conscious decision. I want to make sure that if YOU run into the red, you are doing it on purpose, not because you didn’t do your numbers.

Now, let’s look at what needs to be included in your numbers.

Expenses will include rent, light, heat, insurance, tax, advertising, paper, pens, staff, loss if in retail or the food business, etc. Income includes the price for which you sell each item or service, MINUS the cost of goods that you are producing or reselling.

Let’s say that your rent and expenses are $1000 per month. Let’s also say that you are selling only cups of coffee, to keep it simple. If each cup was sold for $2, and the cost of the paper cup and coffee $1, then you would need to sell how many cups of coffee to break even? The answer is 1000 cups of coffee.

Now that you have that answer, let’s see how many cups you need to sell each day. A 30 day month would yield 300 cups per day. Does that seem reasonable to you for the location? If each person buys one cup, you’ll need 300 people per day entering your shop. And that’s before you add a salary in for yourself. You get the idea.

You can work the numbers any way you want – you can add your salary in from the beginning of your calculations. You can be open 20 days a month instead of thirty. The important thing is to Count the Money BEFORE you sign the lease or quit your day job. You might be reading this and thinking, ‘What kind of a numbskull would start a business without doing these numbers?’ The answer is: the vast majority. It’s easy to get swept up in the emotion and imagine all the fun and independence you’ll have. And don’t get sidetracked by the coffee example. Even if you are selling multi-million dollar aerospace systems, you still have to ‘count the money,’ and compare actual sales to budget if you are to stay in the game.

Third, but equally important, is MULTIPLE INCOME POTENTIAL: Does this business give you the ability to multiply your income from the time and talent you invest? In other words, if you write a book, that’s a one time effort. But every time that book sells, you make money. One effort, multiple chunks of income. That’s leverage.

Compare that to selling hot dogs. One hot dog sold, one chunk of income… Unless you can make a special hot dog process and sell the PROCESS to
many people. That’s basically what McDonald’s does and any chain does. They get an idea and create a process and sell the process.

Why is this important? I’ll tell you why. If you create a business that just ‘make one thing, sell one thing,’ without any chance for multiple chunks of income, you’ll be creating a job for yourself, in which you are the owner. As the owner, many entrepreneurs burn out. They feel even more tied down than working for someone else. Why? Because they can’t quit. They can’t walk out the door and forget it. They have rent to pay, they have customers to serve, employees to pay.

While having your own business is tremendous for personal growth – it challenges all you abilities and thrusts you into being an accountant, a production manager, a sales person, a marketing guru – it’s not necessarily the ‘heaven on earth’ you first dreamt of when you visualized ‘freedom’ along with being a business owner.

So, how do you decide what kind of business to start, and if you will succeed? Ask yourself this: Does my personality fit the business, will it cash flow, and does it offer leverage? If you can answer yes to all three, you have a good chance. If not, don’t give up. Instead look around and choose a business that does answer yes to all three. Years later, you’ll be happy you did!

About your author:

Christine Harvey, is Author, Speaker and Businesswoman with six business books published in over 25 languages by 48 different publishers. Her book In Pursuit of Profit hit the international best seller list in eight countries, making her a well-known figure in European and Asian capitals. Many autographed copies of her various books - which started with an original purchase price of $15, are now in the hands of collectors who are purchasing them for over $100 per copy.

Having spent 23 years in Europe, Christine Harvey created several international businesses including Intrinsic Marketing, a management training and consulting company. Clients include Sony, IBM, and other blue chip companies. She has become a sought after speaker at conferences around the world, including those organized by The Institute of Directors in London, The Australian Institute of Management, The Singapore Institute of Management, The British Institute of Management. Her programs have been licensed by the Nanyang Technological Institute in Asia, and others globally. In Eastern Europe, over 40,000 people have been trained in her management systems. She was the first American, following the President of the United States, to be invited to address the Parliament of Czechoslovakia following the fall of communism. Her speech focused on the ‘privatization of industry and the transition to capitalism,’ allowing her to spread success principles globally.

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