Create a business or buy a business?
Content provided by the Women Presidents' Organization
"Sharon, I am so excited about starting my own business," Sue says,
I reply, "Wonderful, what type of business are you interested in?"
Without hesitation Sue answers, "I want a business that provides good cash flow, that employees can run, so I have a lot of free time to spend with my family. Oh, and I don't want to have to pay a lot for it."
At this point, I know that Sue is not really an entrepreneur. Furthermore, she truly does not understand the commitment required to build a successful business. Her comments, "I don't want to have to pay a lot for it" and "I want a business that provides a good cash flow", tell me that she wants to pay to acquire a business that has already been built by another successful entrepreneur. The value has already been created by the seller. The seller is entitled to compensation from Sue for the value created. In this case, unless Sue knows how to take this business to the next level or how to enter a new market, she is buying a job, not creating a business.
It is the CREATION that energizes an entrepreneur. To build a business from nothing that is successful, creates value, is sustainable, and has a life that is longer than your own is the true goal of an entrepreneur.
There is a big difference between being an entrepreneur and being a business owner. In the example with Sue, it is clear that she wants to "buy" a business, not "create" a business.
An entrepreneur who builds a small business around him or herself is probably an entrepreneur who owns a job, not a business. At Rich Dad we have a rule of thumb about this distinction between a job and a business. If you can leave your business for a year and come back and find it stronger and bigger, you have created a business, a B quadrant business. If you cannot, you may have created a job, or an S quadrant small-business.
What is your personal reason for starting a business?
As you begin thinking about becoming an entrepreneur, it is important to understand your personal motivation for wanting to build a business. Ask yourself the following questions:
1. Why do I want to own my own business?
2. How badly do I want to own my own business?
3. At what level of play do I want to play the game?
4. At what level of play am I willing to extend myself to play the game?
5. Am I willing to spend the time to learn about other successful entrepreneurs and their
6. Am I afraid to fail?
7. Can I turn my fear of failing into a strength that will help me drive the business?
8. Can I learn from my mistakes?
9. Can I build a team, or do I like to work by myself?
10. Am I willing to pay the price?
11. Am I willing to put in the time now to be rewarded later?
12. Am I willing to delay financial rewards until the business succeeds, or do I need a paycheck?
Do you have what it takes?
As you are answering these questions and you are still determined to start a business, take it one step further and ask yourself the following questions:
1. What have been your greatest successes?
- 2. What have been your greatest failures?
- 3. How many times have you worked for free?
- 4. Would you work for this company even if you were not paid?
- 5. Is your family behind you in this venture?
- 6. Are you willing to educate yourself in the areas of the B-I Triangle?
Your answers to these questions will help you determine if entrepreneurship is a path for you to pursue.
By Sharon Lechter, Excerpt from Before You Quit Your Job
Content copyrighted by the Women Presidents' Organization