Starting a Business
Becoming an Entrepreneur After Years in Big Business
Written by Adam Roy for Gaebler Ventures
Even the most talented corporate executives often fail when making the switch to fast-growth, startup companies. If you are a big-business executive contemplating starting a business or joining an existing startup, here's some food for thought.
As strange as it may seem, just about every U.S.-based company, including giants such as Kraft and Ford, can trace its corporate lineage back to a startup.
It was not design but rather years of growth, expansion, and acquisition that transformed these small startups into massive legal entities in their own right.
Today, for the most part, employees of these firmly rooted companies operate in a very structured world ages removed from their entrepreneurial roots.
Thus, it should come as no surprise that executives wishing to make the transition from the corporate workplace to the arena of startups and venture capital face hurdles of comparable difficulty.
Successful entrepreneurship requires a very different set of skills than those cultivated by "corporate culture."
While the essential skills needed to succeed as an entrepreneur, such as management finesse and financial expertise, do not differ greatly between these two business models, the manner in which entrepreneurs apply such skill differs from the application of those same skills in the corporate world.
As such, business executives interested in investing in or managing growth enterprises would do well to take note of a few oft-overlooked characteristics of entrepreneurs that distinguish the criteria for success at startups from the criteria for success at established corporations.
Entrepreneurship Rewards Flexibility
In order for a large corporation to function smoothly, executives and employees must have a clear sense of what their job responsibilities are and, as a result, managers and workers are accustomed to working only within their particular department.
For example, if the head of human resources of an auto company attempted to manage the company's inventories, they would almost certainly cause confusion and disrupt normal activities.
In contrast, project managers for entrepreneurial enterprises must be prepared to wear a number of hats, overseeing recruitment of the core team, managing the project's finances, and even evaluating public statements or advertisements prior to their release. If managers cannot respond quickly and efficiently to any issue that arises, they may put the success of the enterprise in jeopardy.
Growth is Key in Any Venture
As the multi-billion dollar debacles that were Ford's 2006 earnings reports illustrated, a large, established company can afford to weather titanic drops in profit without failing or defaulting on loans.
Unfortunately, small businesses and startups do not have that luxury. By their very nature, these companies begin life indebted to lenders and without any established customer base or name recognition. As such, they must grow quickly to the point of self-sustainability or risk miring themselves further in debt by having to boost the business with infusions of loaned funds.
Marketing is (Initially) the Most Important Thing
Established corporations have the advantage of possessing a developed customer base that is aware of the services or goods they offer.
Small businesses, on the other hand, have to work to develop customer knowledge and loyalty. Following the core development of the venture, marketing and advertising should take precedence over nearly every other business concern until the company has achieved its desired exposure.. After all, no matter how well-run, original, or productive your company is, you will not have a single client if no one is aware that you exist.
It is worth noting that while these precepts set venture-funded enterprises apart from the main body of the corporate world, many, if not most, executives have the base knowledge and expertise to achieve a degree of success in entrepreneurship.
Developing that potential is often as easy as refocusing one's business goals to suit the much more rough-and-tumble world of venture capital and entrepreneurship.
Adam Roy is an accomplished writer specializing in business writing and topics of interest to entrepreneurs and small business owners. His own fast-growing small business, Roy Writing, is based in Northbrook, Illinois.
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