When I was 23 years old, I found myself at a crossroads in my short life. I had grown up assuming that like my father and grandfather before me I would become a lawyer, but when I was in my second year of law school a new opportunity presented itself to me. Never one to take a day off, I had also taken a full-time job at a real estate company, and my boss there suggested that he would be willing to move me from a salaried position to one based on commission, therefore allowing me to make much more money. However, the gears in my head began turning, and I realized that if I were to form my own real estate company I could see even greater returns, and I believed I had the connections to make the business viable. My path had been set before me for as long as I could remember, but this new and exciting opportunity was calling its siren song to me. What was I going to do?
Fast forward 40 years, and my company Terranova Corporation has become one of the top commercial real estate firms in southern Florida. I ended up quitting my real estate job and starting the company out of my newly purchased first home – while also saving for marrying my fiance and completing my law degree. Although it wasn’t always easy, with hurdles to overcome from real estate recessions to changing markets, I am confident that pursuing entrepreneurship was the right path for me.
I’m not here to say everybody should quit their jobs and become entrepreneurs. It’s not an easy road, and I would say it is an unwise path to start down it if you are risk-averse, if juggling many roles doesn’t suit you, and unless you have a keenness that will help see you through the rough patches. This is not a decision to be made lightly, and below are some of the most important questions I have found need to be asked if you want to not only pursue entrepreneurship, but also succeed in it.
What is my motivation?
First and perhaps most importantly, you need to ask yourself what motivations you have for pursuing entrepreneurship. For example, if you dream of being an entrepreneur because you want to get rich quickly, then it is important you realize that it is an intensive process to make a business profitable. In fact, I can’t imagine a slower way to make money than being an entrepreneur. The process is an arduous one, and happens over the course of a long period of time – you could work for years without ever seeing a dime. Each day is time-consuming, and you often work more than an eight-hour day, leaving little time for other income-generating opportunities such as another job. To make things even harder for myself, while starting my company I continued to go to law school, and while I’m proud of my accomplishment of graduating and passing the bar exam, I wouldn’t wish the stress level running a new company in addition to law school brings on anybody. Additionally, thinking about a new business as a get-rich-quick scheme is an easy way to make the wrong decisions and instead see that business quickly go into the ground.
Am I passionate about my product or service?
As we just discussed, the beginning phase of a business is stressful to say the least. You will find yourself questioning whether you’ve made the right decision, especially when the hours are long and the initial profits (if any) are lean. The thing that will drive you forward in these instances is the passion that you have for your product or service. Although many business and entrepreneurial articles will tell you these days that “following your passion” isn’t actually the best advice and can lead to poor decision-making, having a belief in what you are putting forward is still an essential element in whether you should pursue it. For example, as the founder and owner of the business one of the most important of the many hats you must wear is that of head salesperson. The enthusiasm you show for your product or service – whether it’s commercial real estate or hand-knit tea towels – is what brings in talented employees, hooks customers, and attracts investors. It is therefore unwise to start down the path of entrepreneurship if you don’t have the zeal that will keep you interested long after the initial enthusiasm has faded.
What is my tolerance for risk?
Growing up, I was always a bit of a risk-taker. Having lived all my life in the sunshine and on the beach, I chose to travel over 1,500 miles up the east coast to attend college at the tip of Maine. With an average snowfall level of 66 inches, I had to quickly learn to adapt in order to survive my four years there, but for me the experience was worth leaving familiarity behind. Stepping off the bus into the small town of Brunswick, I felt an intense exhilaration at the opportunity and new experiences I would face in the new world I had come to, and I had the same intense feeling the day I made the decision to start my own real estate company. If you’re like me, and risk fills you not only with fear, but also a jolt of excitement, entrepreneurship is likely going to be a great fit for you. While employees tend to have risks taken for them, business owners have to take calculated risks everyday and if you’re a natural risk taker it increases the chances that you will make one. Whether it’s quitting your day job or signing a lease on a new space, nothing about starting a business is for the faint of heart. There’s no guarantee of success – or even a steady paycheck – and even if you have enough passion to launch a thousand ventures there are still a number of unexpected circumstances that can result in your failure, from the state of the markets to a kink in supply chains that can’t be easily ironed out. If you are risk-averse, entrepreneurship may not be the correct path for you.
Am I good at making decisions?
When it’s your business, every decision comes down to you – no one else is going to make them for you. The minute you start your business, you will be asked to make decisions every day, and more often than not the “correct” answer will not be clear. As an exercise, think about how you might handle these early decisions: When do I hire employees? Do I work from home or do I lease office space? Do I pursue a niche clientele or appeal to a broader audience? Do I incorporate? Do I advertise? Do I borrow money from family and friends? Do I use my entire savings?
If these questions left you feeling overwhelmed, it is important to know that the decision-making process only gets more difficult and complicated the further you get in the process, especially once you have stakeholders besides yourself such as clients and employees. The choices you make are what leads to the success or downfall of the entire company, so being able to balance trusting your gut while also making informed decisions is crucial. This takes a certain amount of confidence in yourself along with an ability to take action, and if you take a good look at yourself and tend toward indecisiveness, you may find entrepreneurship especially difficult.
Am I willing to take on numerous responsibilities?
To say an entrepreneur wears many hats may be a bit of an understatement. A closer metaphor would be the frantic costume changes that occur behind the scenes at ballets. While it may feel like in your current position you already juggle many roles, it is important to remember that as an employee you are still expected to focus on a special skill or role within the larger corporation, whereas a business owner must contribute everything to the business. This is especially true in the beginning when you have not taken on any employees yet and are still flying solo. This task goes beyond multitasking, you must learn to be everything from bookkeeper to head marketer, and perform each position with the specific skills needed. For example, as previously discussed you must be the chief salesperson for your company, but in the beginning you may also be required to operate as the bill collector. That means that with your clients, you must find a way to maintain a balance of being personable and charming enough to sell your product, while also remaining professional and stern enough to be able to confidently request payment when necessary. Obviously as your business grows you would be able to eventually delegate many of these tasks, but as owner everything will eventually come back to you, so it is important to be open to accepting these responsibilities on your shoulders from the get-go.
I would be lying if I said that my 23-year-old self sat down and seriously thought about each of these points before making the decision to quit my job, change the course of my life and start my own company. However, in hindsight, while I don’t think that considering these elements would have changed my decision in any way, it would have been beneficial to know the big questions that should be asked before jumping into the murky waters of entrepreneurship.