What’s the risk involved in being an entrepreneur? Are your core capabilities better suited to working for someone else?
Ask yourself these three questions. Determine whether your leadership, as an employee, equates with the risk assumption involved in heading up your own enterprise.
Am I willing to assume risk? Are you risk-averse when it comes to generating revenue (selling)? Identify who is responsible for revenue generation in your current organization. Sales and business development positions are highly compensated. Why? These business development professionals have breadth and depth of experience with risk and revenue generation. This translates into value creation for customers. What is your own level of experience regarding assumption of risk and revenue generation?
Am I willing to make decisions? Your success as the head of your own company is leveraged by your willingness to make decisions, especially the hard calls. Identify who the decision makers and risk-takers are in your organization versus the order-takers and doers. Key decision makers are located on the front line of business activity: there is nowhere for them to hide. They are not comfortably nestled in the middle of the pack. Do you want to take your front-row seat at the business table when you become the head of your own startup, solopreneurship or small business? Revenue generation becomes your primary job function, not someone else’s.
Am I willing to work hard to create a loyal customer base? Your success at the helm of your business is leveraged by your willingness to put in the sweat equity required to identify, create, nurture and retain your customer base. When you work for other people, cash flow is generated by their customer base. These funds provide the operating cash underwriting your own salary and benefits. Working for others reduces your professional overhead. How much revenue will it take to identify, create, nurture and maintain your own loyal and retained customer base? Your current employer’s or competitor’s customers may not be as anxious to jump ship and fund your new venture as you assume they will be.
Working in corporate cultures and engaging in office politics are time-consuming and mostly unproductive activities. I’m sure that, from time to time, you fight the urge to walk into your boss’s office and tell her how to run the show. When you work for yourself, you don’t have the luxury of engaging in this sideshow. You are constantly preoccupied with generating operating revenue (so your employees can engage in office politics).
If you are a student startup or a budding entrepreneur, assess your level of experience in the business world compared with your competitors. The average age of successful entrepreneurs is mid-30, with years of experience gained working for other people and observing what works and what doesn’t. When you graduate and immediately work for yourself, you by-pass accruing this type of business experience. You short-change building your future credibility with funders and first customers.
Before you make the decision to walk away from the security of working for someone else, ask yourself whether you are willing to assume complete risk for the cash flow and revenue generation of your new company or solo-preneurship. Take a strategic perspective. Focus on learning to lead, making decisions and assuming risk within your current employer’s culture before you step out on your own, prematurely.
Babette N. Ten Haken, Founder & President of Sales Aerobics for Engineers, LLC, catalyzes revenue-producing business transition, startup growth and professional development, one millimeter at a time. She works with manufacturing and engineering firms and small business entrepreneurships. Download her newest White Paper at her Free Resources Page.