The good news this New Year is that innovation and dynamic change inevitably follow the bad news of recession and economic catastrophe. Rising from the ashes of financial hardship, amongst the entrepreneurs of the future are those driven to never experience poverty again.
There’s nothing like hunger or the threat of deprivation to stimulate growth and motivation for success. Comfortable complacency is the enemy of creativity and visionary business growth. The phoenixes of the future will be those forced by circumstance to create new opportunities to rise above soaring interest rates and crashing money markets.
Know Your Strengths
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Whenever I’m giving anyone career advice or business coaching, I do a ‘SWOT’ analysis of them. This is a business development strategy to identify strengths, weaknesses, opportunities and threats that can be applied to individuals too. Psychometric tests like ‘16 Personalities’, a free online test, are also a useful guide for those who are unsure which career path to take.
Those who are between jobs or unhappily employed often lack the confidence to take the leap into setting up on their own. If they do, they’re the most likely to benefit from taking control of their fortunes by becoming self-employed or starting a business. In our heads, we’re prone to fantasise about transforming our lives and living the dream. But the reality is that about a third of new business ventures are doomed to fail.
What Type are You?
Polling and consulting firm Gallup identifies three key types of successful entrepreneurs:
- Sales-orientated and aggressively confident, rainmakers are the fast-talking peddlers of snake oil or their own grandmothers whose focus is on making money by whatever means.
- The smartest person in the room, the expert is constantly learning and coming up with new ideas. This quick thinking clever clogs sets high standards for themselves and others.
- A maestro of organisation and delegation, the conductor is hard-working and focuses on operational efficiency.
Take Risks but don’t Gamble
Successful entrepreneurs understand themselves well enough to know their strengths, surround themselves with good people with complementary skills, do enough research to take calculated risks and are determined, tenacious and resilient. It also helps if they have a passion for their product or service.
Gamblers don’t make good business decisions. What characterises an entrepreneur is a willingness to bet on themselves rather than taking reckless chances on things that are out of their control. Studies show that those who are successful in business are loss averse and driven to avoid failure. Strategic risk, hard work, optimism and luck are all indicators of potential.
It doesn’t pay to be over-confident. Researchers discovered that startups are more likely to fail if the boss is too big for their boots. But the majority of small business owners were found to struggle with ‘imposter syndrome’, a misguided belief that they are unworthy of success. That doesn’t help either as it limits the lengths they will go to to prove themselves wrong.
Master or Servant?
Being on a payroll is a safer bet for those who don’t want all the responsibility of running a business. Founders and owners of SMEs (Small to Medium Enterprises) stand or fall by their own effort and ability.
During a recession, SMEs need strong leadership and high-quality, competitively-priced products or services to survive. Many fall by the wayside if they have debt, cashflow or supply chain problems or fail to adapt to the changing marketplace. Budding entrepreneurs sitting on the sidelines or those who have lost jobs during the recession are well placed to step in and step up where other businesses may have failed or new opportunities arise as the economy picks up.
The key to new business success is to know yourself and know your market. A new venture based on expertise and a relevant skill set has the potential to succeed whether you’re a rainmaker, expert or conductor. No one can be good at all three so successful entrepreneurs don’t generally fly solo.
Rags to Riches
High flyers have to start small. Richard Branson started a magazine when he was still a student and was a millionaire by the time he was 23. Lord Alan Sugar started his empire selling car aerials at 16. These titans of industry share a resilience that enabled them to learn from failures and adapt new business models when necessary. These phoenixes had the ability to rise from the ashes of failure.
Many of the very successful or wealthy didn’t do well at school and came from humble beginnings. Being a bit different can be a disadvantage for children but an advantage in adulthood when standing out can lead to outstanding success. Sometimes, the misfits in the playground turn out to be winners in later life.
There’s nothing like a recession to clear out the old and make space for the new and innovative. Hardship is fertile ground for the seeds of new business ventures. Added to that, many of us evaluated our lives during lockdowns and have been incubating ideas and making plans for pastures new. 2023 could be the year of the phoenix and a new beginning for a multitude of creative and innovative startup entrepreneurs. If not now, then when?