FORTUNE Favors the BOLD - Part 2


By Steven K. Haught, MBA
Over the past 30 years in the American economy, it has been increasingly apparent that courage is the main quality one needs to start a business. Fearless courage in the face of a fight to survive from the day you start… till the day you sell or retire the enterprise.

Millions of people dream of starting a business, but relatively few actually do it. Incredibly, the most educated and brilliant are often the most fearful of taking the plunge. Perhaps fear of failure is most acute in those who have never or rarely failed.

Looking at the business legends of the past 30 years, you will see that almost all of them have demonstrated courage to defy the odds and pursue their dreams. Bill Gates, Steve Jobs, and, much recently, Facebook Founder Mark Zuckerberg all dropped out of college to establish world leading corporations. They know well enough the difficulties they would face if their venture failed.

But their success is not what drives the American economy.  There’s a misconception that small businesses are overshadowed by big businesses when it comes to driving the economy. The truth?  Small businesses fight way above their weight class, creating powerful ripple effects far beyond their local communities.

If small businesses are in fact the economic engine of our economy, why do so many people think going into business is a great choice, but still refuse to become entrepreneurs?

It could be the fear of losing their golden handcuffs—the cash and other benefits that come with employment in a large company. People prefer a sure thing, even if the potential gain in the other option is much larger. There is that feeling of security in receiving a paycheck twice a month. 

While the risk of a large corporation failing is generally less than the risk for small business start-ups, it still happens. Moreover, you have almost no control over your destiny in a large corporation.  A reorganization or merger may leave your position redundant even when you have performed well.

Statistics about the low rate of success for start-up businesses are often mentioned by pessimists to dissuade people from pursuing a path of entrepreneurship. The truth is not as depressing as it seems. 

 But what is truly the right course of action? Distilling all that I have observed and read about those who dared to start a business, it is my carefully considered belief that, indeed, fortune favors the bold.

One of the most often cited fearsome statistic is that only one in five newly started businesses will last five years. In the first place, this does not apply to all industries. Usually, this is in a field where there intense competition and virtually no barriers to entry. This also does not include franchises as these have a much higher success rate. 

But more importantly, a lot of these businesses are fatally flawed from the very beginning with problems in the business model or fundamental errors in the operational matrix. By choosing a venture where there is less competition and with an excellent business design and a reasonable revenue growth plan, there is a high probability of success and longevity after the critical 5th year.

Being bold does not mean being reckless. You take calculated risks that you believe will be beneficial in the long run. There is a huge difference between being bold and being reckless. Reckless means being too lazy or stingy to study the business concept carefully before investing one’s hard earned or borrowed capital.

Most of the things that people fear rarely happen and if they do happen, the consequences are rarely as devastating as they anticipate. Still, most people will prefer to play it safe. By default, only those who are brave can reap the rewards that fortune is likely to give.


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