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Are You Sure You Want to Be an Entrepreneur? Answer These Questions to Find Out!

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Ken is a retired insurance executive. He is happily married with two adult children, a companion rescue dog, and nine grandchildren.

are-you-sure-you-want-to-be-an-entrepreneur-answer-these-questions-to-findout

Owning a Business is Crazy!

I am a retired business owner. I was an insurance agency owner for 42 years prior to retirement, and have real-life entrepreneurial experiences to share.

For the purpose of this article, I will be a business owner again. An entrepreneur in life’s lessons, if you will.

Like any other morning, I opened my doors right at 9:00 a.m., on the dot. Being punctual is one of my non-negotiable traits. I’m a consultant for entrepreneurs from all walks of life. My store is always busy with people seeking my advice.

As soon as I unlocked the door and raised the shade, a young couple entered. I could tell they had stopped by the local library by the five or six books they were lugging with them — all of which carried the theme of ‘Starting a Business.’

‘Look at you! You finally decided to take the plunge, huh?’ I asked, trying to strike up a conversation. I wanted to find out as much as I could about them. My experience over the years has taught me to study people.

Learning about my customers is paramount in what I do for a living. It helps me define their strengths, weaknesses, likes, dislikes, plus much more.

‘Yeah, we got tired of the man telling us what to do, how to do it, when to do it, and then cracking down on us for not doing more! We saw an ad about this opportunity to own a business and thought we’d check it out. But that’s not the only reason — we want to create something with our own hands and brains, something we can be proud of, maybe turn over to our children someday.’

‘That’s great,’ I said. What kind of experience do you have owning a business? I wondered.

‘None,’ they replied.

My day had transformed itself before my eyes — from a relaxing day at the office into one busy with “detail work,” filled with an extra dose of exhaustion, and it was only 9:00 a.m.

‘Let me check my calendar here, so we won’t be interrupted.’

I quickly checked my schedule for the day… no pressing engagements appeared, so we were in luck.

‘Well, my schedule doesn’t look too busy today.’ I announced. ‘How may I help you?’ I queried.

I was shocked and surprised by their next question.

You don’t know what you don’t know!

‘How long will this take?’ they wondered.

‘Well, that depends,’ I answered. ‘Do you want to succeed or fail?’ I asked in a serious tone.

They both looked at me, puzzled by such a silly question. I knew exactly what they were thinking: ‘Of course we want to succeed.’

As they say at the start of most horse races nowadays, “And they’re off!”

Their “Business Education 101” course had just begun.

Before I continued their instruction, I wanted to be certain I had their attention, so I asked another question:

‘What have you left out?’ I asked.

They looked perplexed and began looking back and forth at each other, wondering what they had forgotten to tell me. They were clueless as they turned back to me.

Confused, they both leaned in toward me and asked: ‘Huh?’

Now I had their attention. I told them to settle back in their chairs, and I’d fill them in on what they hadn’t told me. I started their education with the simplest reality check I know:

Beginning a business is challenging for so many entrepreneurs due to one simple nugget of truth:

“You don’t know what you don’t know!”

“Any education is expensive, for a variety of reasons, but it is even more costly when you’re starting a business. Why is that? Because it is a never-ending process!

I read an article from November of 2020, titled What Percentage of Small Businesses Fail? (fundera.com), where the author, Georgia McIntyre — Fundera Ledger, highlighted some interesting data from the Bureau of Labor Statistics Business Employment Dynamics.

Did you know 80% of all Start-up businesses survive their first year? In their second year of operation, 70% will still be operating, and by the end of 10 years, only 30% of all those businesses will be open for business. That’s a pretty high rate of attrition, isn’t it?

No business course you might take will be able to guarantee your success. That’s because running a business is a constant trial-and-error process. One strategy will work for a while. Then, suddenly, a new strategy is needed because your customer base demands more, or different, or better, or newer.

This isn’t just about the facts and figures of actually running the business. No way! You can google an answer to find out about business plans, cash flow, profit and loss statements, goodwill, and tax considerations. Those are easy! This is about the ramifications of owning the business and how it applies to the rest of your lives.

Let me speak to you about what you haven’t told me:

  1. What kind of business do you hope to start?
  2. What is your primary motivation for starting a business?
  3. How committed are you to this venture?
  4. What is your experience level in this particular field?
  5. How is your health?
  6. How long have you two been partners?
  7. Where will this business be located?
  8. Have you arranged enough financing for sustainably funding the business expenses you will incur?
  9. How many employees will you have on your payroll?
  10. Will you be conducting hiring interviews, or will you seek outside help in that area?
  11. Have you been trained and are you qualified to run whatever machinery is needed in this business?
  12. What are your hours of operation?
  13. Outside of the business, how is your family life?
  14. How well do you handle stress?
  15. What type of activities do you enjoy to keep yourselves physically, and mentally fit?
  16. What kind of desire do you have?
  17. What is your backup plan?
  18. Are you flexible?

Let me stop the list right there for a moment. It isn’t quite finished yet. These are just some of the considerations you must tackle if you decide to proceed with opening your business. I can’t fill in the merits and demerits of all these questions in one session.

Let me start by answering the first question for you.

  1. What kind of business do you hope to start? You didn’t say, and I didn’t ask about the type of business you’ll start. That is because it doesn’t matter! I give generic answers to people who are just starting out in any business. After answering some of these basic questions I’ve listed for you, we will both know if you need a more specific answer and I will gladly point you to someone with that expertise.
  2. What is your primary motivation for starting a business? Do you have the right reasons for opening a business? Many times, I have seen employees get angry or frustrated with their employers. That could be a direct result of the stress of the current job getting to them. People who seem to succeed together are the ones who have what they believe is a better answer to a common problem — a better “mousetrap” to offer. They are also the ones who may be doing a certain job one way but have created a different, less expensive way to do the same thing.
  3. How committed are you to this venture? You may have heard the old expression: “It takes two to tango” and this has never been more evident than in a business relationship. It takes a concerted amount of effort from both of you to make this work. It doesn’t necessarily have to be an equal effort in every part of the business. As partners, one of you may have strengths the other lacks in certain areas. Perhaps the other partner’s strengths lie in a different direction and you just happen to perfectly complement each other.
  4. What is your experience level in this field? If your business is going to manufacture blasting caps for construction, you’d best have a background in explosives! That’s just common sense. Otherwise, you will be stepping into a venture of learning by the seat of your pants, and that gets costly fast. Your livelihood depends on you to know what you are doing and how to do it. Bring anything less than this, and you may as well name your business “Regrets!”
  5. How is your health? Are there any health issues that may tear you away from the business for an extended period? If so, it may place an undue strain on your partner. Are there any contingency plans in place for someone else to step in for either of you?
are-you-sure-you-want-to-be-an-entrepreneur-answer-these-questions-to-findout

Have you thought about a backup plan?

Oops, I was going to cover that later, but it just sort of slipped out on me. But, while I’m at it, let me add that, in many aspects of a business venture, questions like this will arise that you haven’t given any thought about how to solve. That is the true definition of learning by the seat of your pants if you ask me.

Back to those questions now:

6. How long have you two been partners? One of the main tenets of being in business together is trust. If either of you is going into this with a wariness toward your partner, my logic tells me to stop. If either of you has any qualms at all about your partner’s commitment and ability to deliver for the company, now is the time to find out.

7. Where will this business be located? This is an often-overlooked question in the decision-making process. Here is why it is important: I live across the Ohio River from Louisville, KY in a small, adjacent city. If I live in Indiana and our business is in Kentucky, what impediments would our business face as a result of my extra drive time? (Darn it, another question). If the site of the business is far away, it may require more frequent visits, or more on-site help, or more business expenses in order to manage the company’s performance.

8. Have you arranged enough financing for sustainably funding the business expenses you will incur? Some companies have substantial start-up costs. Others might have next to none. Get to know your local bankers and financial lenders so you will have at least two to three resources to tap if you ever need to expand.

9. How many employees will you have on your payroll? This is one of the most important questions you will have to answer. It isn’t about the number of employees alone. It encompasses your Human Resources department, your tax adviser, your insurance advisor, bankers, training, employee benefits program and so much more.

10. Will you be conducting hiring interviews, or will you seek outside help in that area? In my particular business, I had troubles, at times, interviewing potential workers. I didn’t have problems with the questions I asked. I had trouble with the applicants’ questions. I stammered and stumbled around a lot. To alleviate this, I had to hire an agency to manage the interviews for me. It was expensive, but it was worth every penny spent. A high-quality workforce would have otherwise eluded me. Payroll firms earn their keep!

11. Have you been trained and are you qualified to run whatever machinery is needed in this business? Like a snake oil salesman, you’d better know what your service provides and how it works. These old salesmen had developed a spiel to convince the crowd their product did, in fact, work:

“It slices and dices, peels and squeals, brings rain from the clouds and puts a shine on your shoes — all that for just 25 cents, folks. Who wants a bottle?” In other words, if your product is machinery, you’d better know how to turn it on!

12. What are your hours of operation? Contrary to popular belief, it isn’t always about location, location, location. Hours of operation come into play as well. If you sell books, and your store is closed during any part of the current 9–5 workday, you are losing potential customers. With the current rage of working from home, this may change somewhat in the future. But, an important dynamic for your business is to know your demographics.

13. Outside of the business, how is your family life? If either of you is having difficulties in your respective relationships, this might not be the best timing for you to go into a business arrangement. The fewer distractions, the better.

14. How well do you handle stress? Whenever I ask this question I usually get a perfunctory answer, “Great.” When it happens, I always tell both of them the same thing: Remember this question and how you answered it! Stress is one of the leading causes of deteriorating health and burnout. Working long hours wreaks havoc on our ability to interact with our family and friends, being able to truly relax, and is an underlying factor of dissatisfaction in the workplace.

15. What type of activities do you enjoy to keep yourselves physically, and mentally fit? You should have an established daily exercise routine to rid yourself of the stresses of managing and owning a business. Without one, you jeopardize the success of your business. Stress has many adverse side effects. Among them are high blood pressure, anxiety, panic attacks, irritable bowel syndrome, heart disease, and other vascular diseases. You owe it to yourself to be disciplined with your efforts at exercising. After all, you are the lifeblood of your business. Without you, your business might fail!

16. Are you flexible? I have associates who are or were business owners. The one thing constant with any business, without a doubt, is change! Many successful business owners take change with a grain of salt. They realize nothing stays the same forever and they must always be open to change. They will work diligently to acclimate their policies and procedures to the changing landscape of our world. The Coronavirus (COVID-19) pandemic is the perfect example of this. Think of all the businesses that have failed because they were either unwilling, or unable to change their policies, or they didn’t react fast enough.

17. What kind of desire do you have? Do yourselves a favor: Sit down with all of the principals involved in getting your business off the ground and running. I want you to identify for yourselves two things: your motivations, and your desires. Ask yourself this question: What do we desire to achieve with this business, and what motivations are we willing to implement to help us achieve those desires? You cannot solve a problem you do not see! This exercise will help you develop the vision needed to accomplish your dreams.

18. What is your backup plan? What do you mean, you don’t have a backup plan? Every capable business has a backup plan, in case all else fails. If Plan A doesn’t work, what next? Not having a Plan B is tantamount to failure! What’s more, it should be as detailed and far-reaching as your Plan A! Sometimes, I’ve called Plan B my “pivot to success.” Consider it a poison pill for survival! How’s that for an oxymoron?

Folks, thanks for staying so attentive throughout all these questions and answers. I assure you, it is an absolute necessity to ask all of these questions of yourselves before you even consider opening your doors.

There are more steps to take and more questions to ask, but I see it’s nigh onto 5:00 p.m. now and I have to close up. But before I do, one more thought just occurred to me: You didn’t ask me how much this education would cost!

The price of admission was paid when you entered my store — pro bono. It is my belief that knowledge should be free and available to everyone, especially for those entrepreneurs like yourselves, who want to build a better mousetrap!

I hope you will share this knowledge with other entrepreneurs you meet and I wish you great success if you should decide to move forward.

You two take care now, and come back to see me anytime.”

Thanks for reading this!

This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.

© 2021 Ken Kayse

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