Listen to Rick’s colum here:Download the_american_dream.mp3
Owning your own business—it’s part of the American Dream. For most people, however, the dream should stay a dream. In my experience, very few people have the combination of skills needed to successfully run their own businesses.
Knowing whether you have the skills to operate your own business is an accomplishment all on its own. Those insightful people who can discern their limitations are often the ones who achieve financial success helping make their employers or companies successful. An example might be a man who is a skilled salesman with outstanding people skills, but who is frustrated by financial details and quickly bored with office routines. He is likely to be happier, as well as financially more successful, working for a company that rewards his selling skills than he would be trying to manage a business of his own.
There is a classic book called The E Myth, by Michael E. Gerber, which I recommend to anyone thinking of getting into business. Gerber says there are three skills necessary in running your own business: technical, managerial, and entrepreneurial. If you fail at any one of these, your business is probably going to end up consuming you, your assets, and your dream.
Most of us start out in business as technicians. That is, we learn our trade, whether it is in sales, technology, medicine, law, or hundreds of other vocations, and we learn it well. So well, in fact, that we may start dreaming about becoming the boss.
When you start daydreaming about owning the place, that’s the time you we really need to wake up and take notice. If you expect to make that dream come true, you have to be willing not only to work hard, but also to expand your knowledge and skills. You may be a phenomenal technician, but to be successful in business, you’ve got to acquire management and entrepreneurial skills.
Teaching technical skills is the core competency of colleges and universities, but that academic arena isn’t the best place to learn how to be a successful manager and entrepreneur. Certainly there are useful classes available, as well as many books on management, and it’s a good idea to take advantage of them. In addition, you can learn by observing successful business owners. Finding someone willing to serve as a mentor is one of the wisest things a prospective business owner can do.
When it comes to management skills, one of the most critical areas is understanding finance. Too many aspiring business owners just don’t have a clue when it comes to understanding how money works. Yet it is darn near impossible to be successful without a basic understanding of what drives your income, where you spend your money, and what is left over (the profit) that keeps you in business by driving further innovation and capital investment. What is left after all that is your reward for taking the risks inherent to being in business.
That reward—the lure of financial and career success—is what most would-be entrepreneurs focus on when they’re at the dreaming stage. There’s nothing wrong with having it as a goal and an incentive. At the same time, it’s essential to realize that the way to gain that reward is to do the day-to-day work it takes to manage a business.
If you wouldn’t enjoy learning or practicing managerial and entrepreneurial skills as well as technical ones, it’s unlikely that you would succeed as a business owner. Fortunately, there are many other routes to success. The best way to fulfill your dreams is to choose a route that’s the best fit for your skills and talents.
