A shortage of capital or difficulty in finding the right opportunity may keep some people from going into business, but the biggest obstacle often lies within
I met Kathy about five years ago at a conference she was attending with her husband. A bright, energetic woman, she was working in her husband's company at the time, but she was looking for something to do on her own. She told me she was thinking about starting a business and wanted my advice.
The business, she said, would organize romantic evenings and getaways for busy couples. She described one such event she'd done for herself and her husband, complete with mystery messages, subtle clues, flowers, champagne, dinner, and a show. She obviously had a flair for this type of thing, not to mention all kinds of great ideas for turning her flair into a successful venture. I told her it was a fabulous concept and offered to serve as her mentor. She was thrilled.
For the next year or so, we stayed in touch by phone and mail. I gave her some things to do in preparation for launching the business. She completed all her assignments and was getting ready to take the plunge--or so I thought.
Then one day I received a letter from her saying that she'd decided not to go forward after all. The timing just wasn't right. She was going to get a job instead. I was baffled, but I accepted her decision. It's hard to argue with people about the important choices they make in their lives. I seldom try.
We lost contact for the next three and a half years--until last spring, when I ran into Kathy and her husband at another conference. She greeted me warmly and handed me her business card, which identified her as "Chief Romanticist" of the new business she was starting. She was finally ready to make a go of it, she said.
"So what happened before?" I asked.
"It's simple," she said. "I was terrified."
Fear, I've come to believe, keeps more people from starting businesses than any other single factor. You hear about other obstacles--lack of money, inadequate support, bad advice--but they pale in comparison with the fear most people have that their new venture will fail.
Not that everybody experiences this "entrepreneurial terror," as the late Wilson Harrell, an entrepreneur and former Inc. columnist and publisher, called it in an article he wrote for this magazine many years ago ("Entrepreneurial Terror," February 1987). When I first went into business for myself, the thought of failing didn't enter my mind. Call it arrogance or ego or congenital overoptimism. For whatever reason, I just assumed I was going to succeed--which didn't stop me from failing over and over again. Those failures, of course, turned out to be an important part of my business education.
Looking back, I realize I could have saved myself some anguish by being a little more concerned about failure than I was. Business is inherently risky, after all, and some types of fear are good for you. If the fear is rational, it serves as a warning alarm about real risks you may be taking. If you pay attention to it, apply some reason to it, and think it through objectively, you can keep yourself from taking foolish risks, and you can minimize the risks that are unavoidable.
That won't happen, however, unless you acknowledge the fear up front--something many people find exceedingly difficult to do. Instead, they deny it. They make excuses. They find ways to rationalize their reluctance to go out on their own. In the process they often wind up losing their best shot at achieving their dream.
I have a young friend who's a good example. We'll call him Stephen. He came to me three years ago and asked me to help him get started in his own business. He didn't care much what type of business it was as long as it met certain criteria. There was only so much money he was willing to put in, for instance, and he wouldn't consider any business that might interfere with the practice of his religion. I was happy to give him a hand.
We started looking for a business together. Over the next two years, we considered 9 or 10 opportunities and gave serious thought to 2 or 3 of them, but none seemed quite right to Stephen.
Then we got lucky. A friend of mine decided to sell a medical-supply business she'd had for seven years. The business was profitable enough, but she was a little bored with it, and she wanted to do another business with her husband, also a good friend of mine.
It was a golden opportunity for Stephen. The business met all his criteria, and he had personal contacts in the medical community that he could use to expand his customer base and increase sales. Most important, I could vouch that he was being given accurate financial information about the business and that the price we negotiated was reasonable. Those are two of the biggest unknowns in any acquisition, and no amount of formal due diligence can completely eliminate them. Even the smartest businesspeople often wind up buying a pig in a poke. It's exceedingly rare to have inside information that you're getting a fair deal.
Stephen said he wanted some other opinions. I encouraged him to get as many opinions as he liked. So he talked to his family's accountant, another businessperson he knew, his brother (who's a doctor), and others. Altogether he must have asked 10 people for advice.
By and large, they raised reasonable issues and questions. I noticed, however, that Stephen heard only the negative side of what he was told. When someone mentioned the importance of having long-term contracts with customers, for example, he thought, "Uh-oh. I could lose those accounts." He kept focusing on the downside. Finally, it dawned on me that he was searching for reasons not to do the deal.
Not surprisingly, he found them. You always do. He came back and told me that based on the advice he'd received, he didn't think he should go forward. I said, "Listen, Stephen. You have to do what's right for you. I have no ax to grind here."
"Well, I'm still looking," he said.
I just shrugged. The truth is, I doubt he'll ever find a business opportunity to his liking until he confronts the real obstacle in his path: his own fear of failing.
That's what Kathy did. She faced her fears, identified them, and thought them through. When I asked her what they were, she was able to rattle them right off.
To begin with, she said, she was afraid of what people might think of her if she failed, and what she might think of herself. Second, she was afraid of being alone, on her own, making decisions and having to live with the consequences. Third, she was afraid that her product was no good. She worried that people might be encouraging her just to be nice. Finally, she was afraid of writing a business plan. "I'm not a businessperson," she said. "I don't know enough. I don't have the expertise you're supposed to have in business, and I was ashamed of that."
I believe people can handle most fears once they're out in the open. I'm going to help Kathy with her fourth fear. (Not that I completely agree with her, by the way. She knows more about business than she realizes. Most people do. I'll have more to say about that in a future column.) As for the other fears, Kathy is already taking care of them by herself.
She decided she could live with the possibility of failure and loneliness if she started on a small-enough scale. So she's running a pilot project, organizing a few romantic getaways for busy people she knows who've expressed interest in her service. In effect, she'll be testing her product--and thereby dealing with her third fear.
The start-up costs are minimal under that scenario: a few hundred dollars for business cards, stationery, a modest Web site, and the like. Meanwhile, she's keeping her job, which gives her the independence she craves. She'll still have that even if the business fails.
And let's face it: there's a possibility that the business will fail. Kathy won't fail, however. I have tremendous confidence that, sooner or later, she will realize her dream. She's already cleared away her biggest obstacle.
I'm just hoping that Stephen can do the same.
Norm Brodsky is a veteran entrepreneur whose six businesses include an Inc. 100 company and an Inc. 500 company. This column was coauthored by Bo Burlingham.