Most Entrepreneurs Never Start A Business, Here’s Why… Steve Wright Ph.D
The historical badge of distinction of America is DNA of entrepreneurial spirit. Make no mistake about it; American entrepreneurialism didn’t emerge with the age of the Internet or even the 20th Century for that matter. The foundation, the fabric, the backbone of American entrepreneurialism has been around for a LONG, LONG time.
Every school-age elementary student is taught early of inventions of Thomas Edison, the Wright brothers, Benjamin Franklin, Henry Ford, and Andrew Carnegie. We all know that our European forefathers bartered and traded as they arrived and became the early settlers.
By the 19th century the railroad, banking, farming, saloons, blacksmithing shops, traveling tonic salesman and even horse-trading became ways for the desirous entrepreneur to make a living. Unfortunately, our history is also marred with nefarious entrepreneurs who sought to make their money through slavery, prostitution, abuse and theft of Native Indians, crime and the abuses of evil men.
Case In Point
Entrepreneurship has never been more vital than it is today. American entrepreneurship is woven deeply into each an every American, it has emboldened the American dream as immigrants sacrifice everything to arrive at our shores for the opportunity that awaits.
According to research from Babson College and the Kauffman Center for Entrepreneurship, anywhere from 10 percent to 17 percent of adults in the United States take an active role in start-ups. The Global Entrepreneurship Monitor reported that nearly one in ten working adults in the United States, or 18.3 million, were actively involved in the process of forming or leading early-stage ventures.
The U.S. Small Business Administration (SBA) estimates that there are about 25 million small businesses. The SBA believes there are about 180,000 companies that have between 100 and 500 employees, and about 5.7 million companies with fewer than 100 employees. The balance—the 12.8 million sole proprietorships and the 6.4 million limited partnerships or limited liability companies—have no employees.
According to the U.S. Department of Commerce, small businesses account for nearly 60% of the gross national product, produce some 75% of new jobs. In 1999, sole proprietorships in America had close to $969 billion in revenues.
Many people wrongly assume that small businesses owners only make up a small fraction of the American economy and nothing could be further from the truth. Today, it is entrepreneurship, startups and small business owners that makeup and hold the American economy together. Anyone willing to dream, work hard, innovate and take risks can contribute to our rich entrepreneurial history.
Most Entrepreneurs Never Start A Business
In 2005 two brothers from Texas turned a $300.00 cooler into a $450 million thriving business. Roy and Ryan Seiders real passion is fishing and they started flexing their entrepreneurial muscles with businesses that made fishing rods and boats. Their boats needed a sturdier cooler than what was on the market, they had an ah-ha moment and the rest is history – more than a cooler, a brand was born.
Sons of a nurse and a high school teacher, these brothers learned early that entrepreneurship was in their blood. It’s worth noting that they did not create the world’s first coolers, they vastly improved it much like Truett Cathy’s proclamation of the chicken sandwich, “I didn’t create the chicken, just the chicken sandwich.” The Seiders boys also have a slogan, “Wildly Stronger, Keeps Ice Longer.”
- The Dream – Some call this stage the emotional rollercoaster. Dreaming, research, and sharing the idea out loud to others are all early steps for entrepreneurs. Unfortunately, this is where many get stuck and where many dreams die.
Choosing the wrong audience has shipwrecked many entrepreneurial dreams and ambitions. Entrepreneurs will hear comments like: “that will never work,” “that will cost too much,” “that will take to long,” “someone has already done that” (example: made a cooler) or “that is too risky.”
- The Risk - The word “entrepreneur”—one who undertakes, manages, and assumes the risk of a new enterprise—comes from the French, where it literally means “undertaker.”
In 1607 the Virginia Company sent three ships across the Atlantic and unloaded 109 passengers at what became Jamestown, Virginia. They were embarked on a new business enterprise that they hoped would be profitable—American plantations.
Most entrepreneurs do fail. Remember the aforementioned Seiders’ boys? We aren’t reading about their fishing rods or their amazing boats, are we?
Isaac Merritt Singer wanted to be an actor but he is best known for his sewing machine. Henry Flagler lost his shirt in his salt business only to later create Standard Oil. When we read about Wilbur and Orville Wright we aren’t swept away with historical accounts of their struggling bike shop.
The risks are real, they are very real. For many entrepreneurs, it is the business equivalent of climbing Mount Everest. The challenges of the climb are the thrill and excitement as much as the product produced.
- The Struggle – I love Discovery Channel’s TV show called Gold Rush. To me, it encapsulates American entrepreneurship. Normal, everyday folks head to Alaska to mine for gold. They don’t create gold, they simply dig it up, sift through the dirt with trammels and they pray at the end that they have found gold. This certainly isn’t a new industry. Some experts believe that the practice of gold mining may be 7,000 years old so this show certainly isn’t about a new, sexy startup industry. It is literally is as old as dirt but there is no clearer picture to me than what this show illustrates regarding the struggle that all entrepreneurs face.
Each week on this show there are MAJOR PROBLEMS: a key employee is injured, quits or is fired, there are major mechanical breakdowns (there are no repair shops in these remote areas), the weather is atrocious, the bosses are irritable, mean and crass, there are long days 14 -16 hour days working 7 days a week complicated turf wars that may lead to fist fights.
At the end of each show, they have the gold weigh in. How many ounces of gold were they able to find? The immense pain is seen on everyone’s face when the totals are low and the sheer joy and celebration is seen when enough gold is found.
The Corporate Rat Race
Like gerbils on the endless spinning wheel, many employees feel the grind of the thankless American corporation. Ideas of innovation, no thank you, creative thinking – that is someone else’s job. Opportunity for promotion – thanks but no thanks.
For many Americans, their workplace environment feels like a sterile, numbing sedative. No need to think critically or outside the box, just perform your menial job and the higher-ups will be happy. It is painful in many ways when your contribution is never valued and you feel squeezed into a box.
How does anyone climb off the spinning wheel and escape the entrapments of the corporate rat race? After all, the benefits are enticing but at what price?
If you are like countless others and a few mentioned above you may feel that you do not have the earth-shattering idea that provides you with the confidence to launch out on your own. Remember that Truett Cathy didn’t create the chicken, the Seiders brothers didn’t create the cooler and Parker Schnabel (Gold Rush) didn’t create gold or the way to find it.
Why You Should Consider THIS Option
Starting a business from scratch is HARD work especially if you have never done it before.
Virgin's Richard Branson once said: “It's far more difficult being a small-business owner starting a business than it is for me with thousands of people working for us and 400 companies. Building a business from scratch is 24 hours, seven days a week, divorces, it's difficult to hold your family life together, it's bloody hard work and only one word really matters- and that's surviving.”
Tina and I have always wanted to start our own business but children, responsibilities and the high risks of the uncharted waters were daunting. Tina has an MBA and I have a Ph.D. and we both come from strong entrepreneurial families. We didn’t have the latest and greatest NEW IDEA but jumping back into corporate jobs as we moved back to North Carolina didn’t appeal to either of us.
Franchising is the strongest and most secure way for entrepreneurs today. Proven systems, matched skill sets and passions, higher survival rate, and branding make franchising the closest thing to a sure-fire success story.
Having a support system from seasoned and successful franchisors makes a huge difference. When you have a problem or a question, you simply pick up the phone. Franchising also helps businesses ramp up quickly and see increase profitability quicker.
Tina and I went to a franchise Discovery Day and there was one statement that helps cement our decision. “Steve and Tina, you guys are hard-working and educated and you are going to do well no matter which decision you make. As smart as each of you are though, you guys are not as educated as our thousands of employees that have been building our proven system over the past 40 years.” This is an honest and powerful statement and it embodies the power of franchising.
Are You Ready To Push Out From The Shore?
If you are seriously thinking about starting a new business, buying an existing business or buying a franchise, we’d encourage you to do what we did. Speak with others that have already done what you are thinking about doing.
If you’d like you can reach out to Tina or I. If you would like to sit down with someone in your geographic area we’d be happy to connect you with someone in your city or area.
A mentor is someone that has been where you have not been, they have done what you have not done and they have seen what you have not seen. Do NOT go it alone, use a trusted business broker. We have written a free eBook for those interested in buying a business.
Steve Wright – Swright@tworld.com
Tina Wright – Twright@tworld.com
