Are you an entrepreneur? (Richard Grace 1998 +
updates - latest = 2020 (keep on learning) Why?
My article first written in 1988 - with updates
(voted massive success on Quora by many other entrepreneurs worldwide)
David Lee said to me in 1988 "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 you own circumstances and those of others. Take the
environment into account, get your timing right and above all expect
The ability to control one’s own destiny and
fulfil personal goals is very desirable. In 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 in preparation to go where most
stay out. This paper analyses the phenomenon of entrepreneurial
activity. This activity lies at the very root of development, and
insures the living standards of our children and their children to
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”
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 fulfil goals
without financial risk. The great inventor does not need the ability
to communicate but the entrepreneur will always fail when he can’t
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
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 demand for the idea.
and go, in a democracy the people decide – the entrepreneur
understands the philosophical differences each change drives and is
driven by and how this effects the marketability of ideas.
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 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.
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 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.
business deal can be conducted without an element of trust. Many
businesses strive to eliminate risk and minimise 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 day illustrate
this point well) it is however essential to research your advisors and
No surprises then to find the majority of
entrepreneurs choose their advisors by personal recommendation. one
day a “Dragon” at the BBC takes 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.
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
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 happiness. An investor 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 more recently - "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:
Why most businesses fail - Most
businesses fail because there are more things against than for. In the
matrix of positive and negative influences the negatives include
unknown and unforeseen events but less of the good luck.
- 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?
Many 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 they 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 succeed
Because 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.
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 2017: to contact me by email
"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," Don Sussis,
Angel Investor and Serial Entrepreneur.
Are you an entrepreneur -
This paper written by Richard Grace in 1998 updated in 2011
to contact me by email email@example.com
("Experience is what you get when you don't get what you want" - Richard Grace 1968)
Salmon aren’t Very bright!
been one of my favourite photos for years.
I didn’t take it I found it on the web it contains a simple story!
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
“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 –
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"
“Things are not always what they seem to be” Oh- and just one
more thing - "when you are up to your neck in alligators - dont 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.)
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
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