Have you ever wondered what it takes to be an entrepreneur? There are two questions to speak to about entrepreneurship:

  1. “I have a business idea. How do I get started?”
  2. “What does it take to be a successful entrepreneur?”

Both questions really stem from the same thought: “I want to be a successful business owner, how do I do it?”

The answer is frighteningly simple and therefore almost always rejected. Founding, building and succeeding with any new business, in any industry, in any country, always boils down to one thing the “numbers”.

Only 10% of new businesses succeed past their first decade. Only 30% survive their first 5 years and only 50% survive the first year.

While it is easy to identify a handful of critical factors that make a successful entrepreneur, there is one factor included in the list that cannot be controlled and cannot be clearly identified when founding a new business – The idea…

Would-be entrepreneurs who ask the above two questions always fall into one of two categories. Those without an idea but who desire to build and run their own business and those with an idea but no idea how to start a business around the idea. Absurdly for both the chances of success are exactly the same. An untested business idea is tantamount to no idea at all when it comes to founding new businesses and as a result, the success of any business comes down to one factor only: “Numbers”. No matter how good “the idea” might be.

The Massachusetts Institute of Technology (“MIT”) in the USA opens on average 900 new businesses a year. Less than 10% ever turn a profit and only 1% of them ever turn into major corporations. Backed by a billion-dollar endowment fund, even the mighty MIT is beholden to the “Numbers”.

And so, there is no escaping the fact that starting any new business at any time anywhere in the world will always be a risk endeavour and will always have a far higher chance of failing than it will in succeeding. However, as we know from the few who do succeed, the risk is completely worth it and changes the lives and the lives of the families involved in every way, sometimes for generations to come. Having witnessed this over the centuries, there are, therefore, those of us who, despite the “Numbers”, are willing to put everything on the line to be part of that exclusive group who succeed in the end.

Undeterred? It is important then to note that “the idea” is not the only obstacle you will need to overcome. In order to build a successful business of any kind, you will require the following before you even start:

  1. Capital
  2. A leader
  3. A network
  4. Perseverance

Capital

When we say capital what we mean is: sufficient and often ongoing capital or source/s of capital. Capital being readily available cash or cash inflow into your new business from a separate and stable source.

One of the most common mistakes of failed entrepreneurs is their incorrect calculation of how much their new business will cost in start-up capital. How many entrepreneurs have we seen quit their traditional jobs (terminating their only reliable and sustainable source of capital) and empty their and their friends and families bank accounts and home loans into a venture that required vastly more capital than they could have ever envisaged?

At the very least new ventures should not be started off the back of quitting one’s traditional job if that is your only source of reliable and stable capital. A lengthy and comprehensive search for those “Venture Capitalists” willing to invest in your “idea” is an unfortunate but unavoidable first step in starting a successful business. Alternatively, you need to create your own stable source of capital. See below for details on how to do this successfully. Until such time as your capital has been secured, do not launch your business and certainly do not quit your day job.

In order to calculate how much capital your start-up will require, utilise your own know how, that of your leaders (see below) and that of your network (again see below). As a general but painfully accurate rule of thumb, once calculated multiply your capital requirement by four to more accurately predict your capital requirements. This is not said in jest. In practice and on average, we only ever identify 25% of the costs required to start and maintain a business to profitability and therefore, never believe that you are absolutely certain of your capital requirement at launch. In addition, many believe that a business does not need to be profitable in order to cease requiring capital. This is a completely incorrect understanding of basic business accounting. Until such time as your business turns a cash flow profit, you will continue to require a source of capital to fund your start-up.

A Leader

Being a successful entrepreneur requires leadership skills. You may not be it. In fact, it is very likely that you have never built or led a successful business before and will therefore definitely require a person in your start-up team who is an experienced leader. A leader of people, a leader of the process and a beacon of motivation and endurance within your organisation. The right leader is the heart of any business. While you may be the brains, no part of a body can survive without a heart, not even the brain. A good leader for your business is therefore absolutely essential in boosting your chances of success, and a good leader must be found before you launch your business as they will need to, in all likelihood, lead and motivate you through, what will inevitably be a long and arduous process.

A Network

“It’s not what you know, but who you know” this saying is never truer than when you are starting your own business. A brief study of history will reveal to you that most successful businesses were built off the backs of great networks – good or bad idea at the time aside. Knowing the right people in the industry you are launching into will often mean better prices, fewer mistakes and the right people partnering with you. For the vast majority of people, this network simply does not exist and can sometimes take generations to establish.

Perseverance  

Building businesses from scratch take time. Lots of time! Sometimes decades before any real value is returned to the founder. The unfortunate truth is that the vast majority of people do not have the self-discipline to delay gratification. As a result, most new businesses flounder when their founders realise this is going to take a lot longer than they originally thought to turn into a success. In our experience, we have found that only around 5% of people are able to tick the boxes of Idea, Capital, Leader and Network. But only 1% of entrepreneurs are willing to persevere in the pursuit of success for their ventures.

A wise and experienced entrepreneur once said to me: Successful entrepreneurs are those who are willing to be poor for a long time. While watching their employed friends seemingly making progress in their careers and wealth. Until ultimately, they strike success and create levels of wealth their “successful” friends could only have dreamt of.

Do you have the self-discipline to endure years of struggle and preserved failure in order to ultimately, maybe only in your late life, create wealth your friends could only have dreamt of?

It is because of all the above that only 10% of businesses survive in the long run. The odds are always stacked against you succeeding and your success remains purely speculative no matter how certain you may feel. For you the question must be, can I afford to risk the money I have to start this business? If you will be left with nothing if it fails, it is often not worth pursuing. This, however, is a personal choice.

For the budding entrepreneur though, all hope is not lost. In fact, quite the opposite. The 21st century has seen the advent of tech-enhanced annuity income building opportunities abound. The creation of an annuity income is the highest form of wealth creation. Income earned repeatedly off transactions concluded in the past allows for a compounding ability to create life-changing wealth for one’s self over time. These opportunities offer the ultimate solution to the above five hurdles to building your own successful business.

Firstly, they simply require you to connect individuals to the host company. These well-established wealth creation (Capital!) companies already have tried and tested ideas that most importantly, work!

Secondly, building networks of worth in these companies require no staff, no offices, no licences and as such little to no capital. This immediately opens up a world of opportunities for you. You can keep working at your traditional job while building your network or you can build your network full time without bankrupting yourself, friends and family members simultaneously.

Thirdly, the host company, if already successful will likely provide the leader/s for you. Offering you the additional opportunity of learning to be a leader yourself in an environment that will not backfire if you prove not to be the world’s next statesman. Valuable leadership training is almost always included in the package and often for little or no charge.

Fourthly, as you are partnering with an established business, you do not need to worry about having your own network of key contacts in the industry. You are free to build wealth (a reliable source of capital) without any of the stresses of founding your own business. Ultimately, this wealth empowers you to pursue the founding of your own business with the security of the capital required.

Annuity income network opportunities are often understated by those who have not properly investigated their wealth creation potential but remain the most likely economic solution for most of the globe in the very near future. Offering business-like freedoms with almost none of the usually associated burdens and risks. They provide an opportunity for every budding entrepreneur to experience business building in the ultimate forgiving but realistic environment. Ironically providing for them, at the end of the day, solutions to the above five hurdles by creating a flow of capital for them, training them into leaders and often establishing a network for them to utilise in founding their own businesses later. Not to mention training and experience in endurance and perseverance.

There’s no question that in the 21st century all should be building, leveraging and maximising their own spheres of influence to build an annuity income of wealth for themselves and potentially for the generations to come.

What does it take to be a successful entrepreneur? More than most have available to them. Does this count them out? No. Start by leveraging your own contact list and build an annuity income that will empower you to then build that dream company you always wanted.