Are you an entrepreneur? (Richard Grace 1998 + updates - latest = 2019 (keep on learning) Why?
My article first written in 1988 - with updates (published on Quora read by many other entrepreneurs worldwide)
I am retired - currently working on an in depth study on Pinterest for Business (the worlds fastest growing business "right now") - see - Richard UK Pinterest Expert NOW!
David Lee said to me in 1988 "Richard you can't be an Entrepreneur unless you are risking your own money". I think he meant - "Your family money". If you are looking for investment, risking your own money or both, ask yourself some searching questions. Consider carefully your own circumstances and those of others. Take the environment into account, get your timing right and above all "expect the unexpected".
The ability to control one’s own destiny and fulfill personal goals is very desirable. In all developed societies the possibility of achieving true financial independence for oneself and family does exist. To get there takes hard work, creative thought and luck. The entrepreneur understands requirements; he or she understands the environment and the risks involved and prepares to go where most stay out. This paper analyses the phenomenon of entrepreneurial activity which lies at the very root of development, and ensures the living standards of our children and their children to come.
At the heart of the implied advice are two statements:
“When you know where you want to be, decide what you are prepared to give up to get there”
“Experience is what you get when you don’t get what you want”
The difference between an Inventor and an Entrepreneur
A common mistake is misunderstanding the difference between an entrepreneur and an inventor. Both invent but an entrepreneur must have the ability and drive to bring ideas to market. Both may succeed or fail but the inventor can often fulfill goals without financial risk. The great inventor does not need the ability to communicate but the entrepreneur will always fail when he or she - can’t articulate ideas.
Inventors must protect their ideas and entrepreneurs must broadcast theirs. You can be an inventor and an entrepreneur but an entrepreneur only if you understand the key difference.
The environment has an effect - Winning ideas have to be right for their time. The climate and the social environment of the day must engender demand. Demand needs to be sustainable technologically and the entrepreneur understands what factors encourage or discourage this demand for the idea.
Governments come and go, in a democracy the people decide – the entrepreneur understands the philosophical differences each change drives and is driven by + how this effects the marketability of ideas.
Can I take risk?
Many people live life under the influence of others, their family, their boss, their company and their paymaster. The entrepreneur is prepared to risk losing ALL these support systems to achieve goals. In full knowledge that most fail will pursue an idea at both personal financial risk AND risk of "ego" damage.
Amongst entrepreneurs failure is well understood, even respected (particularly when it is followed by success). Society in general however misunderstands the concepts of liability and insolvency.
These factors play an important role in a developed free market economy. How many times have you heard the term “bankrupt” used incorrectly. What is administration or receivership? and what part does our complex monopoly legislation play in society? These are all questions the entrepreneur should understand first but often learns the hard way. “If you can’t take the heat then get out of the kitchen” and if you can’t take risks with your own money or ego then you are not an entrepreneur. Understand this now and save time and pain for yourself and others close to you.
No business deal can be conducted without an element of trust. Many businesses strive to eliminate risk and minimize the amount of trust they extend. However the big gains are made where trust is given and risk is taken. This can be observed everywhere free markets exist. Societies that have controlled economies and suppress freedom of the individual to take risk are subject to continuous pressures from within. The socialist philosophy, tried in many forms throughout the world, does not sit well with entrepreneurial thinking where the idea of keeping ones own gain provides inner motivation.
Our world is full of parasites
The world itself is full of parasites. Cats have fleas and entrepreneurs have accountants and solicitors. The true entrepreneur recognises this and asks his advisors to share the risk. This approach can take many forms, at one end of the scale credit on fees and at the other advisors that are also investors. It is a common misconception that the best advice comes from blue chip companies (the Enron story, Lehman Brothers / HBOS / NR etc. and more coming every year illustrate this point well) it is however essential to research your advisors and obtain referees.
No surprises then to find the majority of entrepreneurs choose their advisors by personal recommendation. one day a “Dragon” at the BBC took a fall for cheating on his wife - Now USA have chosen an entrepreneur to lead the greatest nation on earth!
Many people with business ideas think that banks fund businesses. The entrepreneur understands assets and liabilities, understands the value of goodwill and critically understands the difference between secured and unsecured borrowing.
He or She understands the meaning of equity and the personal pain, and or joy that can be realised in mixing financial dependence with personal relationships. Our society continues on a "path" of change in the regulation of advisors.
The scandals of recent years involving the sellers of so-called financial products have been well documented and our governments are agreed on a regulatory path to protect us all. We don’t yet know the end result, but we do know that pensions are not the rosy picture painted by the salesman of the eighties and that investments can go down as well as up.
Our legislative environment has and continues to encourage more people into entrepreneurial activity seeking their goal of true financial independence -
How important is having money? (adequate funding, contingency funding and personal funding)
Well - it would be difficult to argue that not having sufficient money is a good thing. There are always things to buy and bills to pay, without money projects can look more difficult or simply impossible.
You may like to go back and read the previous sentence again.
How many times have we heard the classic rags to riches story and how much do we like it? How many times have we heard of a rich person starting something else, blabbering on about the benefits and why we should all buy, only to find later the product was no good?
I must mention here the Sinclair C5. “A classic lesson” – an inventor confused that he was an entrepreneur – a government throwing taxpayers money at someone famous – a host of reputable companies duped into involvement. Double page advertisements in the Sunday supplements were used to sell a completely hopeless product- way in front of it’s time.
The entrepreneur does not need money; he does however need to understand cash flow. In the same way the body is sustained by a complex system of arteries and veins a commercial enterprise must have sustainable supplies of cash flowing around the system. Death from cash flow starvation is painful; it can distract attention from all the remedies. A true entrepreneur can recognise the symptoms and create sustainable strategies to recover and survive. He or she also knows when to quit.
Does money make people happy?
Patently it does not; at least it does not on its own. An entrepreneur is not always rich; in fact often poor and in some cases plunges deep into negative equity. Most people however continue life believing that more money would lead to more happiness. The entrepreneur understands and exploits this phenomenon. Products and services are associated with creating the feeling of wealth, either saving the customer money or increasing wealth by saving time or increasing earning power.
Entrepreneurs understand assets and liabilities, they think in wealth creation terms over periods and have the ability to articulate these theories to investors. Investors on the other hand look carefully at entrepreneurs preferring those for whom money does not represent everything about happiness. An investor always thinks, “If the entrepreneur will not risk his own money then why should I?”
Does Luck play any part ?·
Can I make my own good luck? In all businesses luck has a part to play. The roulette wheel of life spins non-stop, so how does an entrepreneur increase the chance of winning.
Entrepreneurs constantly seek information from and about competitors, markets and customers. They sift and weigh it; they examine it for success and failure. The most compelling skill is being able to determine what is luck and what is judgment. The luck of the escape from failure is just as important as the luck of the unexpected gain. The entrepreneur capitalises on good luck and dumps bad luck on the scrap heap of unseen balance sheets. ·
When to start? Entrepreneurs don’t know when to start. They often start when circumstances are inconvenient and stressful for others around. It would be wise to say “get your family circumstances, life and finances in order before becoming an entrepreneur” That simply is not the way it works.
An entrepreneur thinks in a goal orientated way and acts accordingly, often secretive about ideas until they are researched and formed. An entrepreneur will often launch into an idea before the infrastructure is ready, causing pain to those around. The entrepreneur possesses “fire in the belly” which can be seen through his or her eyes and constantly heard through mouth and pen. And over recent years - "social media".
When to change course?
Entrepreneurs do not know when to change course. They hang onto ideas and projects until they have served their function, then they dump them to move on. The timing of “course change” is seldom related to money, an entrepreneur will often continue losing money whilst gaining information.
To an entrepreneur “information is all”; the knowledge about failure stacks up positively on the entrepreneur’s "personal" balance sheet. The ensuing damage in the collection period is often painful for those directly affected.
Entrepreneurs understand technology. From the birth of the industrial era technology has driven quality of life and productivity of man. You wouldn’t try to build the M1 with a shovel and entrepreneurs know this instinctively. They look constantly for organisational productivity enhancements and constantly disrupt their organisation by implementing change.
The Entrepreneurs Check List
Entrepreneurs need to understand when compulsive work is destroying other aspects of life. The entrepreneurs check list is here:
- Do you understand the effects of the environment? ·
- Can you take risks? ·
- Can you recognise and deal with parasites? ·
- Do you understand the importance of money? ·
- Does money make you happy? ·
- Can you make your own good luck? ·
- Do you know when to start? ·
- Do you know when to change course? ·
- Do you know when to stop?
Starting OffMany businessmen and businesswomen breath a sigh of relief when their start-up plans come to fruition. The new office and equipment seems real and the plan looks feasible, the goalposts are clearly in sight. This is the time to start scoring goals not to concede goals and not be distracted. The true entrepreneur possesses tenacity and determination. Is prepared to be flexible and drive the organisation through critical mass and on towards sustainability.
Businesses fail because their owners cannot see the warning signs of technological change, competition with deep pockets or lethargy. When in trouble businesses often turn to the “parasites” who then, are at their most dangerous.
Greed and power drives accountants and insolvency practitioners who are immune to personal grief, they railroad through, asset stripping and destroying an entrepreneurs dreams for personal gain.
Why some Businesses succeedBecause they get sufficient things right. The product and environment, the competitive positioning and the cash flow management. The entrepreneur pilots it onwards to critical mass. The business is then there to stay if well managed. Entrepreneurs often sell companies at critical mass to pursue their next idea.
I was educated in business within the corporate environment in the 70’s and 80’s. For 30+ years I have been an entrepreneur.
"Are you an entrepreneur" - written by Richard Grace in 1998 updated in 2011 and 2019: to contact me by email firstname.lastname@example.org
"Qualities that I look for in an entrepreneur include 1) integrity; 2) commitment; 3) ability to listen and consider suggestions; 4) a healthy ego; 5) intelligence; 6) honesty,"
credit goes to: Don Sussis, Angel Investor and Serial Entrepreneur. Are you an entrepreneur -
This paper first written by Richard Grace in 1998 updated annually + now 2019 to contact me email email@example.com ("Experience is what you get when you don't get what you want" - my favourite saying - Richard Grace 1968 + every year since)
Salmon aren’t Very bright!
been one of my favorite photos for years.
I didn’t take it I found it on the web it contains a simple story!
The salmon is following its inbred instincts – Simple “get up stream to lay eggs” The bear on the left isn’t that bright either he is just following basic instinct too
“He is hungry” The Bear on the right is an entrepreneur – he knows
if he helps the salmon get up-stream then he can make
sure the eggs are laid and importantly – he
knows where they will be hatching.
This will create a future supply of food and he will
retain the knowledge of where it is.
"An interesting story this can teach - but I am not ordained to Preach"
Richard Grace last update (not much) 29/06/2019
“Things are not always what they seem to be” Oh- and just one more thing - "when you are up to your neck in alligators - don't forget it was your initial intention to "drain the swamp" !! (there are 861,000 references to this statement on Google it is not mine however I always liked it.)
I always thought this was another good statement - to help keep focus when finding solutions to important issues. Way back when I was tender age of 26 I remember something that always helped me. Bill Moffat my boss at the time came to Leeds to see me. When he opened my office door I was looking out of the window. He said to me "Richard what are you doing?" - My reply "Bill I am engaged in productive thought". His reply to me. "Great that's why I sent you here, we need a solution quickly but for sure it needs thinking over carefully - I came to help"
You can email me at firstname.lastname@example.org Address: Bracken House, Woodlands Road, Chester, CH4 8LB or telephone anytime on 07376 746265