From a leader to an entrepreneur

What makes an entrepreneur? The striving for competition, driven and stimulated by healthy ambition. Here a harsh axiom comes into play: only one shall be left in the end. That is the sort of masochism, characterizing any entrepreneur – the need to catch up with their opponents, to surpass them, to reach the top. Sometimes it is not so much the result that is important, but rather the process nourished by the spirit of competition – the source of the propulsive force.

An indispensable part of competition is the evaluation by each and every entrepreneur (both fledgling and experienced) of their level of ambition. For some, a fruit stall is the limit, for someone else it is a plant, for yet another it is a corporation or an international holding.

For instance, in sports there is always a champion, who sets the bar for everyone else until this leader inevitably loses, and their once-high achievements become run-of-the-mill entry standards to any sport schools. The same kind of dynamics characterizes the current situation in business, which is why you should be able to evaluate competitive abilities correctly. Entering the business world is not like finding a usual job, and not every burgeoning entrepreneur is ready for the upcoming struggle.

Successful entrepreneurship requires three motivational causes:

1 – eagerness to compete

2 – eagerness to keep developing your business

3 – eagerness to learn

Eagerness to compete

Even if at the beginning you are not “one of a hundred”, those whom I talked about in the previous chapter, but you have set a goal and you are persevering to achieve it… In a while you will be able to join the ranks of the most successful entrepreneurs. Provided that you are not afraid of the competition, of experimenting and finding original solutions for market expansion, developing new products, and offering new services, entrepreneurial luck is sure to wait upon you.

Learn from the strongest and the best – this is the most effective way to pass the stage of original accumulation of capital faster than your opponents. But never steal intellectual property, never infringe copyright: you can steal a bucket of water, but not the spring itself.

Eagerness to keep developing your business

Being an entrepreneur always means being an “owner” rather than “someone, who holds the purse strings”. He or she makes the money work through creative projects, and then hires managers for these projects. A rentier, i.e. someone who lives off the interest from their investments, is not an entrepreneur. Stopping and saying “that’s enough” means reaching the level of your own incompetence. Surely, there is nothing bad about it in itself, but when this moment comes, even the strongest leader stops being an entrepreneur.

Eagerness to learn

You can widen the limit of your competence. And every time I reach those limits, I tell myself: if you do not learn, you will turn into a lifelong manager. Mind you, being a top-class manager is good too, but I have always wanted to have a business of my own.

There are a number of gifted entrepreneurs and naturally talented people capable of building a business out of thin air, as they say. But the majority have to keep improving their knowledge and raising their level of professionalism.

– Business case —

…I have already told you about my experience of working in a big corporation. Half a year did it for me. And the biggest vice that I discovered in the course of those six months was that ignorance dominated at all management levels. Their way of thinking was decades behind our time. It is no wonder that for many years Russian automobile plants have been virtually devoured by foreign companies, not as leading businesses bought as successful investments, but as platforms for a fast entry into the Russian market.

Having returned to the world of entrepreneurship, I left my position of CEO for that of a hired manager and went to study first in Switzerland, then the USA and Japan. I wanted to absorb the most progressive ideas in industry, marketing and logistics, understand how the already successful businesses develop, and how you continue building up entrepreneurial success.

The thinker, researcher and classic capitalism author Karl Marx said that when someone “learns to walk he also learns to fall, and it is only through falling that he learns to walk”.

One of the elements of a successful business is the choice of the right field, or, colloquially, the right “turf”. It is possible that after all the failures and misfortunes in the area you originally set your heart on, you are still willing to persevere. However, you are very unlikely to achieve anything. The failures will overstrain you, undermine your abilities, and, most importantly, destroy your confidence.

Never be afraid of experimenting when searching for a suitable field and environment for a business.

For example, wholesale purchasing of food from individual or collective farms and subsequently selling it by retail is rather a simple thing, but it requires a lot of physical labor (driving around, meetings). Not everyone is able to endure so many business trips and negotiations. Then the entrepreneur, having no time to manage all aspects of their business, decides to hire employees. They have to share the profits with them, and at this point it is important to balance the expenses, in order not to go bankrupt. Lack of profit or, even worse, loss of money is bound to cause disappointment and break your entrepreneurial spirit. Making profits is the main purpose of any business.

If an entrepreneur does not set him or herself the goal of making profits, and is trying to fulfill the desire to be appraised by someone without relying on the final results, they will inevitably find themselves at a dead-end.

In the world of entrepreneurship success is estimated solely on results, not intermediate actions. After all, the winner is determined by the score. Remember, the people around you are not going to judge every step you take.

Admirers, critics and analysts – everyone who is ready to buy the fruits of your labor and call you a successful entrepreneur, will appear only after results are reached.

If there are no results, everything seems pointless and you find yourself face to face with your failures. It does not matter that the failed entrepreneur was an art patron, that they helped the weak and the poor: they become a “nobody”.

If a company collapses, a good lathe operator or a baker will always find a new employer. Hired workers have it much easier: they collect diplomas, ranks, titles which have an impact on their competence and rates of remuneration.

As for entrepreneurs, having no qualifications, rank or title, they might not find their path a second time. There have been numerous examples in history when owners of great fortunes went bankrupt and found themselves on the margins of life.

Nevertheless, surely everyone has the right to go back to entrepreneurship. A potential merchant or industrialist may return to business after being a hired worker. If a person is aspirational enough to dream of becoming a member of the royal family, getting a title of nobility, earning billions, then ambitions supported by the abilities and extremely hard work will help him or her to reach the desired level, or at the very least pave the way for his or her children. That is what happened to Ford, as well as many other well-known European and American entrepreneurs. But 99.9% of people who start their own business do not focus on such lofty goals. Maybe, they should: sometimes the impossible is possible!

As a rule, going back to being an entrepreneur after a failure is much harder because of the looser label, which is both an inner, psychological and an outside manifestation. This is another reason why it is not worth going back into the area where you once failed. Of course, there are exceptions to this rule, but these are few. It is better and safer in every way to drop out of the game prior to a total meltdown, which will give you a small chance of recovering in a different field, either related or opposite.

Business growth, occasional bad luck and even state of instability – these are equally constant elements of entrepreneurship.

Business is more demanding than sports, it is better to give up bad habits and hobbies at the very outset of your business career. Your regime becomes totally dependent on your work and is no longer regulated in accordance with the orthodox eight-hour working day and a five-day working week. Business takes over all your free time, especially at the beginning. The environment for a leader after becoming an entrepreneur requires mobilization of all physical and psychological abilities. This is something that not only the burgeoning entrepreneur, but also their nearest and dearest should be prepared for. You should not expect to stay afloat working half-steam. This would mean fooling yourself: there are no such things as half-measures in business.

I mentioned before that when business starts consuming all an entrepreneur’s time, he or she inevitably hires people to boost production and sales. But it will not get any easier unless you concern yourself with the HR policy, get to know more complicated accounting techniques and arrange the production system. In this case it is very important to perfect the schemes and mechanisms of profit-making in the face of growing expenses (salaries, the amount of rented facilities, transport, etc.). Theoretical knowledge given at colleges and universities is not enough. Until the aspiring entrepreneur fully understands the entire mechanism of controlling overhead expenses in the course of the production process, and then gains the first profits, they will never get the feel of how their business is functioning. Evaluate the advantages and disadvantages of certain steps you take, dispose of the first and increase the second. And even if the business is growing successfully, one should never stop developing it, otherwise the vector of luck will immediately go down.

The job of an entrepreneur is an endless succession of events and struggles. If you are truly interested in business, you should accept a simple truth: entrepreneurs virtually exchange their time, their loved ones, and themselves, for what they do and love.