Why 2010 Will Be the Year of the Entrepreneur

Honey, it's a recession - time to start a new company. Not the words you might expect from your loved one in these trying economic times. After all, who can think of starting a new business in what is widely regarded as the deepest economic downturn since the Great Depression? The answer: entrepreneurs.

In fact some of the most prominent and influential companies of our time did just that. The list is endless, but to name a few there's FedEx, General Electric, Microsoft, MTV, CNN, Sports Illustrated, Hewlett Packard, Revlon and Apple. I could keep going, but you get the point.

So why is it that recessions have proven to be so conducive to entrepreneurship? The answer can be traced back to Plato, who noted in his seminal work, the Republic, that necessity is the mother of invention. As unemployment remains stubbornly high, starting a new company may not be so much of a choice as it is a necessity. In other words: If you can't find a job, create your own.

Last month the economy added 431,000 jobs, and unemployment declined from 9.9% to 9.7%. Good news, right? Not so fast. Unfortunately, 411,000 of the jobs added were temporary census workers, which means the private sector was responsible for only a fraction of the new jobs (see May 2010 U.S. Job Report).

Economies by their nature are cyclical. There is no doubt that the private sector will come back. The economy will rebound. Better times are ahead. Yes, all this, despite the European PIIGS, tensions in the Middle East, the BP oil spill, and the many other obstacles the global economy will have to overcome. Now that I think about it, it may be time for Billy Joel to update his song, We Didn't Start the Fire.

The global economy is fragile but it is sputtering back to life. In spite of the few green sprouts we're now seeing though, many people can't wait that long. And, they shouldn't. There have been few times in history where the challenges facing humanity have been so great, so consequential, and so global. Problems abound, and creative solutions will be required to tackle them. Now more than ever entrepreneurs are needed to think through and offer solutions.

 

According to the Kaufman Foundation, despite the recession, entrepreneurial activity in 2009 rose to its highest level in 14 years (see: Kaufman Foundation Entrepreneur Index).

There's every reason to think that 2010 will be an even bigger year for entrepreneurs, and that's good news for everyone.

The Principles of Entrepreneurship and Buses

So you’re ready to start a business and you want to know the key ingredients for success. Well, the simple truth is that starting a business isn’t like baking a cake. While advice for budding entrepreneurs abounds, there is no simple, straightforward recipe for starting a successful venture.

Fortunately, there are common principles and questions to think through which will broadly increase your venture’s chances of success.


Grit Your Teeth: It’s Not Going To Be Easy!

As Booker T. Washington once remarked: “Nothing ever comes to one, that is worth having, except as a result of hard work.” When it comes to entrepreneurship, few things prove truer.

The most valuable commodity your nascent venture will have is you: your time, your experience, your finances, and of course, your determination. If you’re not able to fully commit to your new venture, success will not be likely. Ask yourself how much time and energy you’re willing to put into your new idea, and for how long. As you’re getting started it’s important to reflect on your expectations and understand the sacrifices that you’re willing to make.


Do What You Love.

“Find a job you love, and you’ll never work a day in your life,” goes a famous maxim. One of the most compelling features of entrepreneurship is that you’re in the pilot seat. You decide the direction your business will take. You give it its life, its shape, its soul. But too often, entrepreneurs don’t consider these questions.

What is it that you love? What is it that you’re passionate about? Why are you starting your new venture? These are essential questions to contemplate before breathing life into your new company.


The Delicate Waltz Of Failure And Success.

You cannot succeed without failure. Your failures, simply put, are the best learning opportunities available to you. Consequently, it is of paramount importance that you’re not only conscious of them, but that you continuously learn from them.

Indeed, history is littered with great people who overcame their failures. Beethoven, in the early days of his career, was pronounced hopeless by his music teacher. Michael Jordan was cut from his high school basketball team because he failed to measure up to his teammates in his sophomore year. Walt Disney ran his first company into bankruptcy before eventually founding the Disney Empire.

When something goes wrong take the time to ask yourself the reason for your failure. What alternatives did you have available? What could you have done differently? How have other successful people in similar situations reacted? How will you approach that situation differently the next time?

Failure is inevitable. It is how you respond to failure that will determine your success.


Find The Right People.

No matter what you decide to do, finding the right people will be instrumental to your success as an entrepreneur. Among other things, business partners help you to fill gaps in your experience, supplement your finances, think through complex problems, and broaden your social network.
Put plainly, finding the right business partners is fundamental to increasing your chances of succeeding.

Think carefully about the kind of people you need in order to bring your idea to life. Before bringing someone on as a partner consider whether they share your passion? Do they complement your skill set? Do they have the right attitude? What are their expectations of you, and what are your expectations of them?

Being honest with yourself and your business partners will enable you to forge a good relationship.


Execution is King.

Great ideas are everywhere. Whether you’ve stumbled on an innovative new product, developed a way to improve upon an existing service, or decided to open a brick and mortar store to serve your local community’s needs, your ability to execute is critical.

Putting the right foundation in place will dramatically help you execute on your short term and long term goals.

Breaking up large tasks into small steps is fundamental. When faced with a substantial task you must think through how you will meet that challenge, and not just conceptually. Nothing can replace a well thought out plan with clear, concrete steps.

Think about building a house. You may know that you want to build a French Tudor, but you wouldn’t try to build it without a blueprint. What materials would you use? How much of them would you need? Does your budget cover the costs? Have you obtained any required permits? Being an entrepreneur is in many ways like building a house. You would not try and build a house without a blueprint, don’t accept less of yourself when starting your business or tackling a large task.

Do you have a mission statement? Creating a mission statement is more helpful than you may think. It defines the backbone of your idea by forcing you to articulate what it is that you are trying to accomplish. When difficult decisions arise your mission statement will serve as faithful compass stewarding you toward your objectives and solid execution.

Often overlooked, but equally important are your company’s values? Establishing values will help you execute consistently and efficiently. Whether you’re dealing with a customer, interacting with the media, selecting a vendor, or hiring employees, values keep you grounded and focused.


Most Importantly, Get On The Bus.

Richard Branson, founder of Virgin Enterprises reflected, “Business opportunities are like buses, there’s always another one coming.” The question is which one is right for you? Once you have chosen, it’s time to get on!