Are You Risk Taker….and What is the American Dream?

Are you risk taker….and what is the American Dream?

A true entrepreneur is an amazing creature. A true entrepreneur is a real risk taker. It is in the DNA.

There certainly are folks who own companies and are not real risk takers. These are the people that inherited their business or purchased their company from their boss who might be retiring.  These people for the most part just have a job. Acquiring their business is not seen as an opportunity as much as keeping the status quo in terms of their income.

But a true entrepreneur is a risk taker and in no small measure a risk maker.  These folks are mentally working 24 hours a day.

It really doesn’t matter the type of business that a person would want to run or own the possibility of failure is extremely high.  In other words it’s easier to fail in business than it is to succeed.

A huge advantage to living in an open market country is that entrepreneurship will be what drives the economy.  So it makes sense that living in the U.S. should give a person an advantage toward business ownership.  We are constantly told that business ownership is the “American Dream”.  I have never seen it that way.

Here are the reasons that I believe that.

1.  It takes an enormous amount mental energy to start and or run a small business.

2.  It takes a great deal of reserve money to start and or run a small business.

3. It takes a great deal of time to run your own business, and we are not taking about 8-5 job here.

4.  It takes a tremendous amount of patients.

5.  And….it takes a very understanding family.

So what about these things?

Mental energy.
When engaged in a small business, a person’s mind is occupied on the question of “What do I do now?”.  What does one do in terms of marketing, customer retention, banking relationships, inventory funding.  It never stops.  Even when away from the business one’s mind just does not stop working.

Thinking, thinking and thinking. Consuming an enormousness amount mental energy.

Reserve money.
The common rule is to keep about 3 months of operating money in the bank all the time.  This does not always include payroll.  This would be money primarily to pay the receivables, purchase small inventory items and in some cases payroll but payroll really should not be part of this reserve.  It is best to have about 6 months of payroll in reserve.

So who is able to do this?  Not many.  Typically, only mature and well funded businesses are able to do this.  The average small business is operating on a month by month basis and is lucky to have payroll in the bank 6 days before payday much less 6 months.  This would fit the business that has $500,000.00 or less in revenue in any given year.

Time
What’s that right?  Time.  This is really a huge problem facing small business owners.  Kids have problems, marriages break up and all kinds of issues show up when a small business owner spends more time running the company as opposed spending time with the family.

If it is such a big deal then why do people do this.  It really simple.  A business is the single biggest investment next to their home that they will ever have in their life.  And they are running this thing night and day and probably have never run a company before…..therefor the What do I do now rule kicks in.  The questions never stop, the customers need special care, the employees are getting out of hand and the owner is the only person to look after these things.  In short a business owner is consumed with the care and feeding of this business…..no one else is there to do it form them.  So the family is out of luck.

Patients
This unfortunately, most business owners don’t have.  Can’t find it and don’t know what it looks like if they saw it anywhere.  Patients.  They expect their family, friends and banker to have it but they don’t know what it is or what it is supposed to do for them.  It feels better to make a quick decision than to get to a quiet place a work through the issue.  More businesses get in trouble because of a lack of patients than a lack of money.

Understanding family.
This is really quite a luxury.  These people are not with the business even though most small businesses are considered a “mom and pop” business.  When it does include the entire or part of the family this creates it’s own type of stress and problems.  But if there is no family involved in the day to day running of the business then there is a good chance that they won’t understand what the business owner is facing each day.

What they see is a lack of spendable income, lack of quality time at home and they will be the recipient of a great deal of stress and pressure.   This is a blueprint for disaster.

Having an understanding family can happen but it takes a great deal of communication.

So what does all this mean?
Owning a business is NOT the American dream.  It usually turns out to be indentured servitude.  People go broke, families break up and life becomes a real drag.

Why own a company?
When planned out and executed correctly it is the best life that anyone could ever experience.  There will always be issues.  But with the right planning and mind-set then these issues can and will be managed.  It is a wonderful life.

What is the American Dream?  It is having the resources to go where you want to go, with whom you want to go, when you want to go, stay as long as you want and spend what you would like to spend.

The American Dream is having the money and resources to live in a better house, drive a faster car, send the kids to private schools and sleep on a thicker mattress.  In other words, it equals freedom and that is what the American Dream is all about.  Freedom.  I don’t know of any better way to have this freedom than with owning a business.  That is the American Dream.  And what a dream it is!