You can take this for what it is, my experience and reflection on over 15 years of being an entrepreneur and building several small businesses, or add to it your experience business and make it your own. I’ll talk a little bit about answering what is probably the most important, yet often skipped, step in starting a small business, that is; What does success look like? When I look back, one of the most destructive missteps is failing to define expectations as they relate to a specific business idea.
The Emotional Entrepreneur
For many of us starting a business for the first time is a very emotional period much like that feeling we get when we’ve had a long lingering problem and have just discovered a simple solution once and for all. It can be really exciting and the idea of starting a successful small business conjures up all kinds of weird and crazy images. We will finally be respected, wealthy, and free….. We will have to schedule interviews for the newspaper to allow the local T.V channel to get the time they need for their feature piece on our new business. We might even have to hire a couple people just to help count all our Money!
All kidding aside, it’s important to separate emotion from logic especially in the planning stages of a successful small business start up because reality has a very sobering element to it that will feel like PAIN if it meets unrealistic expectations or a vague definition for success. Trust me on that one. It’s worth noting that building a successful small business can be very rewarding and can even lead to a strong sense of purpose and fulfillment, but it won’t make you happy and neither will success. Looking back I’d say the most important part of being an entrepreneur, starting a business, or creating a business plan is to define success. So what is a successful small business?
What is a Successful Small Business?
It’s no wonder that entrepreneurs struggle when it comes to defining success in their small business and without a clear idea of what success looks like it’s almost impossible to form a goal to work toward. I’ll admit to working my tail off for over 7 years on a business so I could be successful and only after the fact did I realise my definition of success was “MORE”… If that’s where you’re at right now I’ll help you re-evaluate, re-focus and get on track in just a minute. Here is Dictionary.Com’s definition of success:
- achieving or having achieved success.
- having attained wealth, position, honors, or the like.
- resulting in or attended with success.
So as an adjective we have to dig a little deeper and see what they say about the definition of Success:
- the favorable or prosperous termination of attempts or endeavors.
- the attainment of wealth, position, honors, or the like.
- a successful performance or achievement: The play was an instant success.
- a person or thing that is successful: She was a great success on the talk show.
- Obsolete . outcome.
After looking at these definitions of successful and success you’ll notice that it assumes an intended outcome or a goal. After all you can’t have a successful performance if the outcome isn’t defines. One could say the team was successful because they won; The score was 42-32 so we won by ten points and were successful. Being successful in small business isn’t usually that clear cut unless we make it that way. I’ve also learned from experience that “winning” isn’t always an intelligent goal either especially if it requires someone else losing. (Sorry Charlie Sheen)
Ask yourself how many cut throat entrepreneurs you know who are happy?
If being the winner means the business owner willing to accept the least in terms of profit or lifestyle, do you really want to be the winner? I don’t. Comparative logic can and does help in defining success for a small business, but it’s only a part. A large scale business may have a goal of 35% market share. It’s a good goal, it’s measurable and it’s a common element of a successful business but I’d argue it more a part of a plan than a goal. Think of the plan as a map that gets you too the goal. A good plan helps you stay focused and make decisions in the moment that will move you in the direction of your goal.
A successful small business is a business that has met or exceeded the intended outcomes the entrepreneur has defined as goals for that business.
While that seems like a pretty clear cut statement it’s important to understand that success is not a destination it’s a journey (excuse the cliche). One exception might be when we create a business specifically for the end goal of selling it, but the new owner will no doubt be left with the responsibility of continuing to grow the business or position in a way that meets the new goals he or she has for the enterprise. The point is that you’re better off finding that you need to change your goal like this smart lady did than not having one in the first place.
Biggest Myths of a Successful Small Business
Over the years I’ve learned there is a pattern to most successful small business ideas and one of the elements that is always present is the idea that you have to start somewhere and for most entrepreneurs that somewhere is where you’re at right now. I think this is why our definition for success in our small business has to be a fluid concept that can change and grow as we do as entrepreneurs. We all have bills to pay and personal life goals like providing for our family or creating a certain lifestyle and these should play a part in defining success for your business so you can create clear goals. If the main reason you are starting a business is to make money, good luck. Yes money is a part of it but it’s not the end all and when your small business isn’t making money (and it may not) it will be almost impossible to continue in difficult times. Here are some of the myths that I’ve had in journey to build successful small businesses:
- Beating someone else because of a resentment would make me successful.
- Being able to quit my job.
- Being able to have 100% time freedom.
- Being able to have other people do all the work.
- Being able to make all the money I want.
- Being able to do what I love.
These are all reasons and motivators I’ve bought into at one point or another and I’ve found them all to be quite empty at the end of the day. New business ideas available on the Internet offer new possibilities to create really cool outcomes with simple home based business ideas. My Internet business is one of these “new” business ideas that create a very scalable and profitable business with little to no operating expense. While I still am extremely motivated by time freedom or at least the ability to control my free time I understand that the only real and lasting reason to start a successful small business is because I can. We live in a country where this is possible, though it is difficult, it is still possible and I have the personal belief that this is an optional reality that is often taken for granted.
We live in a place where we can bless someone and get paid for it. (though we should do it anyway) We can create value that people willingly trade money for and prosper because of it. There are many different paths to providing for the necessities of life and our families, being an entrepreneru is one of them and I like to think it is foundational to the system we live in today. Becoming a successful small business owner will create possibilities that other methods of earning won’t and I’ve experienced that first hand. Getting a top job in your field of interest is a process that includes things like studying hard, going to college, learning people skills, learning how to interview, and such. Becoming a successful entrepreneur is no different in that it’s also a process. The process is similar in some ways and different in others. In my experience the process of becoming a successful entrepreneur has included things like becoming comfortable with the concept of failing, the willingness to try something new, believe in myself, develop character like persistence, confidence, critical thinking skills and honesty.
Defining Expectations And Business Ideas
Some business ideas are suited to do things that others simply can’t at the present time. Scalability is one of the crucial elements of any business idea and is, in some ways, the ceiling on expectations. I would say that the McDonald’s business model isn’t scalable, obviously that isn’t true because the franchise is everywhere and if has been a successful business model no doubt. But for me and my life goals it, or a business like it, is of no interest to me. When I think of scalable I think in direct terms of impact on my lifestyle and my personal goals as a person and an entrepreneur. One of the business I started that grew into a multi-million dollar business with over 35 employees wasn’t scalable because it had a risk exposure problem, namely I took on all the risk. That was a commercial construction company and I operated mainly as subcontractor with very little control over cash flow and less over variable expenses. It was a high stress environment and only promised to get worse as time went on. Are there successful entrepreneurs in that industry? Yes, but it wasn’t right for me. I’ve learned so much from that first enterprise I started the most significant of which is how important it is to define success and learn what it is you as the owner want from your business. The businesses you start will define how you live, what you do each day, and how fulfilled you are in life in general.
Most people, myself included, start the business that they “can”….
This “business” usually is attached to a specific skill or talent they’ve learned at a job or trade school and the business is quite often born in what Micheal Gerber (wikipedia) calls an “entrepreneurial moment”. The obvious reason people do this is because most of us are living lives that could be better defined as damage control that purpose driven vision, know what I mean? All this is fine, it works out in the end because in reality wherever you want to go will begin with where you’re at. One of the things that really helped me get clear on what I wanted from my business or better yet what I wanted my life to look like was an exercise in a book my Micheal Losier called the law of attraction. It was an exercise on gaining clarity about what you really want in life and it was the catalyst for me to start an online business in the beginning. Here is that worksheet in PDF format if you want to use it.
If there is one thing I’ve learned about expectations it’s that they are not targets and they are rarely “hit”…. It seems something either fails to meet at expectation and ends in frustration or it exceeds an an expectation ending in elation. Sometimes I think the whole point of attempting to define expectations is realize the futility that they bring. I’d rather have a bag of “if this happens then I’ll do this” (aka contingency plans) than a bag of expectations any day.
Please feel free to share your thoughts on creating good goals, successful businesses and managing expectations below in the comments. I look forward to hearing what you have to say. Thanks!