For some time, I have been reading your articles in Bloomberg Businessweek. I am presently working in a bank and have been associated with the banking industry since August 1997. So many times I have made up my mind to resign and start my own small business, but I have reversed these decisions due to lack of courage. I shall be highly obliged for your guidance. —F.A.K., Karachi, Pakistan
Becoming an entrepreneur after losing a job isn’t easy, but leaving a job to become an entrepreneur is often tougher psychologically, says Jack McSunas, a business counselor at SCORE.org in Orange County, Calif. “When you must abandon a safe harbor for the high seas of being on your own, it is more difficult,” he says.
After all, you’ve spent 15 years in an industry that tends to be stable and rewarding. You’ve been steeped in a bankers’ mindset to avoid risk and view it negatively; entrepreneurs embrace risk and view it as opportunity. Over the years, you’ve likely amassed obligations, both family and financial, that make taking the leap into entrepreneurship an even bigger decision.
Yet many people do become entrepreneurs in midlife. Why? Many of them say they had a lifelong obsession with striking out on their own, despite knowing how much risk and how much hard work were in store. The entrepreneurial impulse was like an itch they needed to scratch.
Does entrepreneurship make sense for you? As a banker, it’s likely you’ve already answered that question by writing a business plan, doing break-even and competitive analyses, and making realistic projections about how long it will take your business to succeed. You’ve probably considered the economic and employment climate and thought about what you would do if your venture failed.
Kerry Brock, an interim executive and principal at consulting firm Brock International in Santa Fe, worked in large corporations for a decade before becoming a serial entrepreneur. When he started his first small business, he says, he did three things: reduced his financial risk; maximized his returns; and determined what he wanted from entrepreneurship.
In a first step, Brock says, he divested himself of most of his assets. “The poorer you are, the less you will have to lose,” he notes. “Put your assets totally out of your reach, then after you either incorporate or start an LLC, borrow what you need to start your business.” If your business plan is not strong enough to attract capital, improve it or reconsider your decision.
Secondly, Brock decided to maximize his return by sharing his business goals with investors and lenders. “If you are successful, there will be enough for you—and your lenders will be willing to fund your future and your growth. If you start to fail, you will have advice from lenders who have a reason to make you succeed,” he says.
Finally, decide what it is about business ownership that will bring you happiness and concentrate on that. If you’re starting a business mainly to make lots of money, you’ll need to leverage other peoples’ time for your profit, Brock says. If you’re venturing into entrepreneurship to give yourself flexibility and time with family, you’ll structure your company quite differently.
Andrea J. Simon, a corporate anthropologist at Simon Associates in Yorktown Heights, N.Y., suggests you try some “backward planning” using visualization techniques. “Draw a picture of yourself in five years and storyboard how you are going to get there. Our brains work with pictures, so the pieces will come together if you try this,” she says. She also recommends that you explore InnovationGames.com, a website that uses virtual market games to drive company research.
Finally, consider giving yourself a deadline. If you continue to waffle on this decision after six months or two years, you may have to face the reality that you aren’t cut out for entrepreneurship, says Phillip Moorcroft, a business consultant at MGPS.com in Toronto. “If one has a secure job, savings, and makes a good living, leaving this for the uncertainty of running one’s own business is sometimes too high a risk,” he says. “If you have the stomach for it, you would have done it.”