This is a recap of highlights, quotes, and comments from articles and discussions posted on this date on the Applied Entrepreneurship, LinkedIn group site.
*9 Tips for Being an Olympic Entrepreneur by Carmin Wharton
Research reveals that successful Olympic athletes share nine characteristics. While watching the 2008 Olympics in Beijing, China, the author realized that successful entrepreneurs share the same characteristics. These characteristics are:
- Mental toughness/resiliency
- Patience & Persistence
- Strong Work Ethic
- Hope & Optimism
*Should You Be An Entrepreneur? Brigham Young University, Marriott School Center for Entrepreneurship and Technology
Studies of successful entrepreneurs reveal common characteristics:
- family backgrounds
- personality traits
- values and beliefs.
The article gives insight on how you might fit these patterns.
What is your E.Q. (Entrepreneurial Quotient)? Northwestern Mutual Life has created a test to predict how suited one may be to entrepreneurship. Although the test cannot predict success, it can only give you an idea whether you will have a head start or a handicap with which to work.
Entrepreneurial skills can be learned. The test is intended to help you see how you compare with others who have been successful entrepreneurs.
*Are You Ready to Start a Business? SBA.gov
More of the same. This article gives a good checklist to get started with.
*Partnership dissolution with interdependent values by Philippe Jehiel and Ady Pauzner
The article studies the optimal mechanism that governs the transfer of ownership and the corresponding monetary compensation. The focus is on how the total welfare of both parties (given that the optimal mechanism is applied) is affected by the initial ownership structure, i.e., the share owned by each party before the partnership is dissolved.
*How Should I Protect My New Partnership? by Laura Tiffany
The first thing you’ll want to do when starting a business with a friend is imagine the worst-case scenarios and then prepare for them by drafting a partnership agreement. The article lists some items you’ll want to cover in this agreement.
*10 Businesses Based on a Bad Economy by Laura Tiffany
If you want to weather the storm, keep these industries in mind.
*Adding Nonfamily to Your Board by Patricia Schiff Estess
“I serve on a number of different boards and saw the value outside board members bring,” says Lee, 71. “Throughout the years, I kept thinking that I should have one, too. But I was ambivalent. While I knew I needed a group of outsiders to talk to about the larger issues, like how we should be positioning ourselves for the future, I’ve always been my own boss and I didn’t want anyone telling me or my [family] what we could and couldn’t do.”
Lee’s ambivalence is shared by most family business chiefs. They pride themselves on their independence. They pale at the thought of giving up either family or business privacy. And they see the process of group decision-making as inefficient and unwieldy.
The most common reason for opening up the board of directors to outsiders has to do with succession. “Outside board members aren’t usually brought in until the founder or head starts to feel fragile, when he or she starts wondering what is coming next,” says David B. Hawkes, an outside member on four family business boards and co-founder of Cloudhawk Inc., a family business consulting firm in Portland, Maine. “It’s in succession that outside members can be most helpful in bridging the issues of family and business.”
Because family business heads are skittish about plunging into a position where outside board members determine the affairs of their family or their business, they often start in one of two small ways: with one outsider on the board or with an advisory board.
Establishing an advisory board with no legal responsibility or liability also lets the family dip a toe into the knowledge pool of outsiders. An advisory board can provide a wealth of useful ideas and insights that the family business can act upon if it chooses. If ignored, the board may fizzle as its members become discouraged that their advice is being ignored. Lee, understanding the delicacy of the advisory board, doesn’t call his board an advisory board–though it really is. His “board of directors” doesn’t have liability or the authority to fire the CEO.
It’s important to draw up a “job” description.”
Shore up your weak areas–like inviting someone with broad knowledge of how technological advances in the 21st century will impact the business’s industry. Others might want a person with business experience in global markets.
What I Think
I think there will be a test at the end. The “end” will be when you want to retire, sell your business, franchise it, leave it to your kids, or simply pass on to your just rewards and let your family deal with the aftermath. The “test” will be whether you met your goals at the end, whenever that is, and no matter what form it takes.
Once again borrowing Steven Covey’s admonition, “begin with the end in mind,” many of the articles posted on this date give you a screening mechanism to help you assess your chances of being successful as an entrepreneur. For many years, I have collected articles such as these, which seek to give you an entrepreneurial self-audit tool. I will periodically insert these in the daily postings, and hope you will take the opportunity to review your own scores, no matter whether you are a “rookie” entrepreneur or a successful serial entrepreneur.
While these tools sometimes hit a bull’s eye, they are far from perfect. As one of the articles indicates, on average, they can point out the likelihood you will do well or need substantial help. If nothing else, coming to the realization that you may need help in one or more areas is nothing to be ashamed of. In fact, it is something to be happy about, if true, because this is relatively easier to work with at an early stage than down the road.
In a similar vein, the SBA article gives a very nice checklist of things you should probably be concerned with in starting a business. If there are deficiencies, there is probably time to attempt to plug the holes before they put a hole in your boat.
At the next level of scrutiny, in trying to improve your odds of success, you have the Laura Tiffany article, 10 Businesses Based on a Bad Economy. If yours is not one of those businesses, this clearly does not mean you won’t be successful. On the other hand, it might be interesting to see how many characteristics your business has in common with of these “bad economy” business success stories. Compare why these are successful to how you think yours will be also.
The impact of family businesses on our economy is staggering. There are a few articles in this series about family business issues, and there will be quite a few more to come. This has always been a major portion of my law practice and the additional dynamics of heavy family involvement in a business reminds me of playing three dimensional chess, a game made popular for a time by the original Star Trek series on TV. If non-family business is considered to be two dimensional, adding the dynamics of family to it makes it at least three dimensional. There is always the two dimensional move, but for each such move there is another layer of family impact.
I don’t regret minimizing my matrimonial law practice many years ago, but I often feel like I’m back in family court when dealing with members of a family who don’t get along. They often gang up on each other, despite knowing full well their internal family struggles may destroy or at least devalue their own company. One has to wonder what Thanksgiving dinner Is like at Mom’s house after a particularly acrimonious board of director’s meeting.
Because of the importance of family businesses in the global economy, you will be seeing a fair number of articles dealing with all aspects of this in coming weeks. It won’t last forever, and many of the family business articles also contain strong lessons for any business. The additional layer the family imposes on business strategy and day-to-day management will just be make those lessons a little more complex. I hope you will enjoy them.
If you enjoyed my impression of these articles, why don’t you read them for yourself and see what you and I missed or hit? Join the Applied Entrepreneurship group on LinkedIn. Membership is free and I try to post about ten articles a day there. We have some great discussions going and if you are an entrepreneur, we hope you will join us.