A common trait across many entrepreneurs is an entrepreneurial mindset which allows them to take action when faced with uncertainty. Here are seven such characteristics and how they play a crucial role in any successful entrepreneurs decision making process.
1. Select business partners carefully
If you are looking for a business partner ask yourself if you have had a courtship period where you really get to know each other. This is particularly important when you are partnering up with people who are different to you. While you want different skills, knowledge and perspective in your entrepreneurial team, you want alignment in terms of core values and what you want to get out of the business. The last thing you want is a partnership when one of you wants a rapidly growing business while the other wants a lifestyle business. Having an open and honest conversation up front and working through different scenarios for the business can avoid a lot of conflict later down the line when you are locked into the business.
2. Look before you take the plunge
Many successful entrepreneurs consider a range of opportunities before they select one. First, they look for fit by asking the question – “is this an opportunity for me?” That is, does the opportunity allow you to build on your strengths and interests? If not, it is difficult to add value and stay motivated. Second, they ensure they are moving into a market which is growing or where trends suggest it will grow. It sounds obvious, but one of the biggest mistakes made is to move into a static or declining market.
3. Think lean
We hear of the rag to riches stories but there are good reasons why successful entrepreneurs start lean. First, starting on a shoestring provides focus and discipline; you will only focus on spending money on things that will add value. Second, starting lean forces you to be alert to information that gives you an idea of whether it is worth investing more. All entrepreneurs make certain assumptions at the onset, but not all entrepreneurs question and reevaluate those assumptions as the business develops. A lean operation forces you to do that latter. This is particularly important for those seeking external investment. Increasingly the burden of proof is on the entrepreneur – you need to prove you have a viable product / service before investors will look at you. If you have done this on a shoestring, it gives investors’ confidence. Third, you are more likely to attract people who are committed to your cause when you start lean. Finally, starting lean makes it easier to walk away – the best entrepreneurs who when to pull the plug and move on.
4. Focus on what you can afford to lose
How do you decide if an entrepreneurial opportunity is worth investing your time and money into? While some make endless financial projections about what financial gain they might receive from their entrepreneurial endeavor, these projections can be very unreliable when entering new or volatile markets. Instead of focusing on the upside potential of an opportunity – which is largely uncertain - highly experienced entrepreneurs focus on the downside. They can know with some certainty from the onset what they can afford to lose. Once you have thought through “what is the worst thing that can happen”, it makes it easier to decide if it is worth taking the plunge. If you do decide to take the plunge and it doesn’t work out, having set a limit on your loss can make moving on easier, both financially and emotionally.
5. Value your intuition
Although making decisions on the basis of your gut feeling isn’t considered scientific, research shows that intuition is often based on your prior experience. Having said that, latest thinking suggests that intuition does not have to come at the expense of more rational analysis. Intuition can be a valuable gate keeper, acting as a signal for you to steer clear or explore further.
6. Think about your support network
Even highly experienced entrepreneurs have mentors or individuals who support them on their entrepreneurial journey with its ups and downs. Who will you turn to when things aren’t going as planned? A key issue in searching for and selecting mentors is to ensure you have a good match. This will involve you thinking carefully about what you need or will need in the next few years.
7. Do your homework when looking for an investor
Just like finding a business partner, do your homework. We hear about investors doing due diligence but why not the other way round? Investors vary considerably in terms of how they evaluate business proposals that come their way as well as how they work with businesses they invest in.
Ask yourself, what you want from an investor – is it just the money or is it more. If you want more, are you ready for this kind of relationship? Walk into an investment relationship eyes wide open.