Being an Entrepreneur - Pros & Cons
About the Author
Paul Madgwick
Paul Madgwick spent 8 years in the marketing departments of fast moving consumer goods blue chip multinational organisations of Nestle, Kimberly Clark and PepsiCo, marketing and managing brands of Kleenex, Ruffles, Cheetos and Doritos. He learnt his craft well and applied the professionalism of a large corporation to a start up business. He and a partner borrowed significant capital, relocated states, and under license manufactured and marketed Dynamic Lifter for the home garden market in Australia. Ten years later due to the collective efforts of the licensor in the agricultural market, Paul and his partner in the home garden market, a brilliant product and some clever marketing many would argue the brand became generic for organic fertiliser. In the beginning neither Paul nor his partner had knowledge of agriculture or horticulture but between them possessed many of the qualities outlined in this article.
Now some years later Paul Madgwick with the assistance of partners and a talented supporting team has launched Careernav, a career and life skills pathway for senior secondary students. This website demonstrates many of the personal skills and commercial activities needed for the venture to be successful. We hope Careernav helps you make an informed career choice. Time will tell if Paul and his team are made of the right stuff.
By
Paul Madgwick
Want to be an Entrepreneur – Are you made of the right stuff!
For many people, doing work they enjoy as an employee, for fair and regular wage or salary, gives them all the job satisfaction and control they want. If this is you, that is nothing to be ashamed of. But others have an itch to do more – to be their own boss, to fulfil their own vision of their ideal business. If you burn to create and control a new business venture you may be a natural entrepreneur, with a vision of offering a service or product, generally one which does not yet exist on the market, and taking responsibility for the risks and outcome of your enterprise. Entrepreneurs are also known as founders.
A few recognisable Australian entrepreneurs are John Symonds, boss of Aussie Home Loans; Gerry Harvey, founder of Harvey Norman; Naomi Milgrom, the head of the Sussan fashion chain; Lindsay Fox, creator of Linfox Logistics; and Crazy John’s founder, the late John Ilhan. There are many more successful entrepreneurs in Australia – and perhaps in a few years’ time, one of them will be you.
An annual index recently listed Australia as one of the easiest nations for entrepreneurs to gain access to funding. Milken’s Capital Access Index ranks countries in terms of their capability to sustain entrepreneurial activity by providing access to capital. Recently this index listed Australia as the ninth best nation for entrepreneurs, out of 122 countries. You should be encouraged by this positive rating if you’re interested in starting your own business venture.
People often misunderstand entrepreneurs as wild risk-takers, believing that they are gambling their resources, time and money on a chance. In truth, entrepreneurs do take risks – but these risks are carefully calculated and evaluated, and only taken if the chance of success is high. It takes a particular type of person to succeed at entrepreneurship, with the right personality, skills, and characteristics. If you fancy yourself as an entrepreneur, then consider the following important entrepreneurial qualities and ask yourself if you have them.
- Perseverance, not opposed to hard work and long hours
- Willingness and ability to take initiative
- Competitiveness and strong need to achieve
- Self-reliance and self confidence
- Ability to calculate risks
- Good physical health
- Flexibility
- Ability to turn abstracts into a reality
- Strong commercial nous
- Ability to pick trends ahead of time, see the abstract
Questions to consider as a potential entrepreneur:
- Is there a gap in the marketplace and what facts substantiate this gap exists?
- How big is the market gap?
- Is the opportunity sustainable and does it offer scale advantages with growth?
- What market research or independent data can you draw upon to sell your concept?
- What is your meaningful point of difference – the difference unique enough to attract users?
- Can others replicate your concept quickly or with great difficulty?
- How long does your first mover advantage last before you confront competitors?
- How much capital does the project need – both capital for infrastructure, transfer of technology fee, and capital to fund the ongoing expenses of the venture commonly known as ‘working capital’
- Does the business plan you have written contain a ‘commercial justification’ section that is well reasoned with valid arguments to support proceeding?
- If you need capital what shareholding % of the venture are you prepared to give away and for what level of equity capital?
- If you start with a bank facility, what hard assets do you have (for example your family home) and are your prepared for the bank to take a charge over these assets and further risk losing them if the venture fails?
- Does your venture have clever marketing to support it?
- Does your venture have proven management, especially with new venture start up experience?
- Is your intellectual property protectable with a patent, trademark or copyright?
- How conservative is your worst case scenario and what level of sales volume is needed to recover your total expenses? What share of the market does this volume represent – the lower the better
- Have you surrounded yourself with quality employees?
- Has an independent individual assessed your business plan?
- Have you had legal agreements drawn up to protect yourself and your business such as public liability, partnership agreement, license agreement etc
- Could you go without sleep, family and socializing for long periods?
These are all relevant questions when determining whether you’re entrepreneurial material or not. It’s not an easy road to walk down, and most fail, so it is important that you know whether you are able to deal with the ups and downs of starting your own business. You simply have to be made of the right stuff!
Still interested? Perhaps you would benefit from considering the pros and cons of. being an entrepreneur. It can bring you success and pride, not to mention potential wealth and security if all goes well. However, there are many downsides to consider first, like business failure, loss of your money and possibly your personal assets not to mention that ugly word ‘bankruptcy’ and the wasted investment of money, time, and energy.
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