Entrepreneurship VS. Starting Your Own Business
Anyone or any group can start his or her own business. In fact starting a business is relatively easy, simple, inexpensive, and takes less than an hour. All you have to do is go to your state’s secretary of sate website and register your business. That process requires a person to chose a business name that has not been taken and chose a business form/structure you wish to organize under. Some of the more common structures are: Sole Proprietorship, Partnership, Corporations, S Corporations, and Limited Liability Company. Each structure has its pros and cons depending on what types of businesses are being started. Next obtain a free employee identification number from IRS, get a bank account, obtain local licenses depending on the business and Walla, you have officially started your own business. So what about entrepreneurship?
In the past two years I have asked hundreds of people what they define entrepreneurship as. The most common answer is the process of starting a business. Then I ask what they define an entrepreneur as (most of the people I polled consider themselves entrepreneurs). The most common answer is someone who starts his or her own business and works for his or herself. The second most common answer is someone who takes the risk of starting a new business. While those two common answers give an idea of what entrepreneurship is, it also explains why so many new businesses fail.
Entrepreneurship is a discipline, a discipline that can be practiced, as Peter Drucker puts it. Entrepreneurship asks the questions what is value to the customer; standardize product/services, design process and tools, and sets the standards to consistently meet those values. Harvard Business School defines Entrepreneurship as the pursuit of opportunity beyond resources controlled. Entrepreneurship requires the skills and decisiveness necessary to obtain resources that the entrepreneur does not yet control.
Contrary to popular belief, entrepreneurs are in the minority of people who create new businesses and they avoid unnecessary risks. Entrepreneurs actually do everything in their power to minimize risk because they know investors hate risk. An entrepreneur is someone who creates something new and different, they change or transform values. They create a new satisfaction or a new consumer demand. Opening a new restaurant or a new clothing line doesn’t make you an entrepreneur if you are not creating a new concept, a new customer, or a new demand beyond the products themselves. In Minneapolis, Leslie Redmond of Win Back The Community, Houston White founder of HWMR and Black Excellence Brands and Chef Gerard Klass, Founder of Klassics are three examples of entrepreneurs and not only business starters. While many exist, these three are excellent examples of entrepreneurship. All three of their companies create a new customer satisfaction and new demand.
Those tasked with teaching entrepreneurship have failed the aspiring entrepreneur. Unfortunately most non-profits focusing on business development do not have adequate training models and most facilitators lack the skills, knowledge, and experience in entrepreneurship. They often produce a bunch of new businesses but few entrepreneurs. Often times the emergence of a success story is because of mere chance and not the result of a robust program. Sadly many of the people who start their own business too soon would be great entrepreneurs but lacked the proper training and principles. Entrepreneurship is a discipline, a discipline that can be trained and practiced.
I’m very passionate about urban entrepreneurship and more specifically black business development. My wife would say I spend too many hours perfecting my craft and I love my job but if you are looking for me. You will most likely find me giving that same level of passion and excellence in my community. I grew up an economically disadvantaged black boy in America. I started a business when I was 21. Most people considered me brilliant but it has taken me six years to become a true entrepreneur. If only I had the right training and access to resources earlier in life. The greatest myth in business is that black businesses don’t work as well or there is a lack of talent in urban communities. The truth is there are inadequate entrepreneurship programs. Most of the business development non-profits have facilitators who lack entrepreneurship experience. There are skilled grant writers and skilled people at obtaining government funds but that skill does not translate to executing sustainable economy.
I am part of a new generation. A generation of talented, knowledgeable, and skilled professionals who believe corporate success is important but not at the sacrifice of community wellbeing. Building wealth is a key goal, however our success is not measured by wealth but rather the impacts we have on the communities we grew up in.
If you are considering starting a business or now being a true entrepreneur here are a few questions to ask and statements of counsel:
What will be the best business structure for you to organize your business under based on your long-term goals?
How will you generate revenue? (Business to client, business-to-business, business to government etc.)
Is your end user the same person as your client?
Define your client?
What need will you satisfy or is there a gap in the market you plan on exploiting?
What are you currently doing that will make your venture successful?
Do you have start-up capital, if so is it enough?
Consider who is in your social circle and maximize your social capital in an authentic way.
Are you planning to manage this business, have someone else manage it, or sell it when it becomes profitable?
Is the business scalable (very important if you plan getting investors).
Spend time working on a strategic plan instead of a business plan.
Lastly, breathe…. entrepreneurship is hard but you were born for this.
Drucker, P. F. (1985). Innovation and entrepreneurship: Practice and principles. New York: Harper & Row