A lack of skill, ability and experience in certain business
areas need not be a barrier to success and starting your
own business. The personal qualities exerted by a small
business owner overcoming deficiencies over and over again
are vital and present in many entrepreneurs much more so
that specific technical knowledge.
Not everyone is a master of all business attributes in fact
very few are. Certainly being a master of all is a
fantastic position but unrealistic while certain personal
qualities are essential to fight the inevitable battles to
come. Business battles the successful entrepreneur wins.
Businesses that have grown and become medium sized and
bigger are not reliant on the business owner entirely.
Employees are engaged with specialist skills and abilities
to develop and grow the business. A sole trader just
starting out has to settle for a comfortable living or have
the ability to grow the business to the point where more
specialist abilities can be added to the business.
Most small business owners who start a new business do so
in an area where that small business owner has some
knowledge, experience and skill. It is a natural
progression having acquired the business knowledge and
experience to use those abilities to build the business
under self employment rules rather than earn profits for an
employer.
The personal qualities a small business owner possesses are
more likely to determine the level of success. Abilities
such as hard work, determination, persistence, intuition,
tolerance and aggression can be the bedrock of success. But
the road to success is not all slam wham bang for the
entrepreneur.
Small business owners invariably work longer and harder
than employees. An employee works for wages and an adequate
work performance is enough. A small business owner is more
likely to be on the job at first light, miss the coffee and
dinner break and twelve hours later announce he has to
finish off for the day because he has to go home and do the
business accounting books that he started on Sunday.
Determination and persistence go hand in glove with
success. Every new business runs into problems at some time
or reaches a stage where the business owner needs to be
completely focused and stick with a strategy to make the
plans work. Things go wrong from time to time; its normal,
determination and persistence are valuable qualities to see
through these times.
Aggression in forcing through a business plan may sometimes
be the only viable option. Not physical violence but the
heightened state of anxiety to push through the plan and
make it work with controlled aggression and passion. On the
other side of the coin there will be times when the small
business owner has to exercise tolerance and just go with
the flow.
Many small start up businesses go out of business within 2
to 3 years of starting a new business. A major cause is
under capitalisation which basically means they run out of
money. Liquidity is a major area of concern for every small
business entrepreneur and a cautious approach to a new
business can be of considerable value.
There is a strong tendency for a new business start up to
borrow money and buy new equipment just to get started.
Such businesses are taking a major risk the plans will
work. Some plans do work but rarely it is a smooth path and
a better option is to build the business and reinvest
profits made.
A more cautious approach would be to start a new business
without borrowing substantial funds because if the small
business owner has the ability to make a success of the
business and make money then they can usually do so without
external funding and use the profits made to build the
business in the future. The sound reason for a small
business or a start up business to borrow money is to
already be showing a good financial performance and use
extra funds to speed up future success while borrowing
funds with no track record is a gamble and a gamble which
fails only too often.
----------------------------------------------------
Terry Cartwright, accountant and CEO at DIY Accounting,
designs Accounting Software at
http://www.diyaccounting.co.uk/ providing accounting
solutions for small to medium sized business in the UK with
payroll software at
http://www.diyaccounting.co.uk/payroll.htm for up to 20
employees
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