The emotional cost of being an entrepreneur

The emotional cost of being an entrepreneur

Hey! I know you have decided to go into entrepreneurship and make it really big, and nothing will stop you. But it will interest you to know that you need more than financial and business intelligence to succeed as an entrepreneur.

You might have heard this statement several times, but have you taken your time to think about how emotional intelligence affects you as an entrepreneur?

Let’s take a glean at some lessons from my failed airtime business. Especially the part no one talks about; the emotional cost of being an entrepreneur.

So, I was a young high school graduate full of ambitions and enthusiasm. Oh! I was a financial-independence freak! I started my first business, and it was going smoothly until the emotional side I refused to develop began to show its ugly head in the business.

This lapse in my emotion affected my decision-making process. I couldn’t afford to say no to demands, especially regarding providing what I refer to as financial help. I would assist anyone who came for financial assistance, even if it meant taking from the business’s capital. As you might have guessed right, the business no longer exists.

When the pressure for business stability became too much, and the business was beginning to fail, I leaped into depression and subsequently closed down the business.

There’s one more thing you need to learn before venturing into entrepreneurship, especially when you plan to stay long, and that is EMOTIONAL INTELLIGENCE (EI).

The role of Emotional Intelligence in entrepreneurship cannot be over-emphasis. Here are some reasons:

Entrepreneurs are often alone: An entrepreneur bears the business’s worries and anxieties alone, except he wishes to share them with God. So, the weights of running the business are totally on him.

– Failure: At some point, an entrepreneur encounters failure such as the inability to receive funds, liquation, inability to pay employees’ salaries, and many more. Failure comes with lots of emotions that, when not handled properly, can lead to depression.

The entrepreneurial spirit is tough to turn off. An entrepreneur is naturally a passionate and determined person. So, he might become so busy with business that he would shut all other areas of his life out.

Seeing the psychological cost of being an entrepreneur, it’s crucial to learn and develop Emotional Intelligence for sanity purposes. It starts by focusing on how you feel. Intentionally, take note of your emotions throughout a day, and give a name to what you’re feeling.

You’ll also want to focus on your actions and how they relate to the emotions you express. Take note of whether your emotions drive your choices throughout the day, and what emotions drive certain actions.

Overcoming the emotional trolls entrepreneurship brings is not by ignoring them or pretending they aren’t there. It’s by accepting them, not just that alone – you ensure they don’t interfere with your goals and plans. Likewise, engaging someone will be a great help.

Awareness is another way of defeating the emotional trolls that come with entrepreneurship. Before you become an entrepreneur, learn the emotional price of being an entrepreneur.

Do you know other emotional trolls that come with entrepreneurship? Let’s talk about them and the possible ways to overcome them.

How to Sources Funds for your Business Idea – My thought & Experiences

How to Sources Funds for your Business Idea – My thought & Experiences

You might have heard that you don’t need money to start a business. I think the better way to put it is – you don’t require capital to start working on your business idea.

Every business at any stage requires capital – to start, to run or even to expand. No business can out-grow the need for external funding. Let me put it in a better way; no business is too big or too small to ask for more money.

The focus of my thoughts on this matter will be on two things. First, what to do before you ask for (more) money and second, where to look for money. Join me on this ride.

Four things to do before you ask for (more) money

  • Move past the idea stage.
  • Know what you want
  • Use your own money
  • Horn your communication Skills

Let’s take a look at each of them one after the other.

1. Move past the idea stage

One day I was in my business mentors office, and a young man (let’s call him Nemi) came asking for money to fund what I called a very brilliant business idea. That idea was so bright that when I heard it, I was like wow! I will invest in this idea if I have the money. But after listening to Nemi with rapt attention for like 20 minutes, my mentor simply asks, “How much do you need?”

Nemi replied with a very ridiculously low amount?  He smiled and asked again, “What did you need the money for?”

“To start the business”, Nemi responded.

“What precisely”, my mentor propped further.

Nemi man could no longer answer.

He simply asked Nemi to go and bring his business plan.

After Nemi has gone, my mentor turned to me and said, “Nick, you see that young man, he is not returning to me again. The best way to turn down young entrepreneurs who don’t know what they are doing is to ask them to bring a business plan. They will never return.

That was three years ago. Since then, I have learned never to ask anybody for money until I have done real work on my idea. I mean real work.

They are five stages of business growth – the idea, startup, growth, expansion and maturity stages.

The idea stage is the stage of conceptualisation. You just got this excellent business idea that is going to among Fortune 500 in the next five years. You have everything figure out in your head, you want to start tomorrow, and you need the money now.

Well, I will say, calm down. It doesn’t happen that way. Only a few funders fund ideas, but no one who can, will resist investing in a startup that has proven sustainability and scalability. So before you ask for money, do some work about your idea?

Carry out a feasibility study, identify your target customers, validate your users and be sure that they will love to pay to use your solution. Do your financial analysis and have figures at your fingertips. All this information will lead you to write a “killable” business plan or business proposal.

A powerful tool that can simplify this for you is called “The Business Model Canvas (BMC)”. Maybe one these days we will look deep into it.

2. Know What You Want

From our little story above, the significance of knowing what you want, when it comes to getting funding for your business is apparent. Nobody, including your friends and family, will take you seriously if you do not know what you want. Run your figures to understand what you want, how much you need and how much is for what. You can even go-ahead to run the financial projection of your profit.

Find out your break-even points, break-even revenue or even break-even unit. You can learn this calculation online. Seek for an assistant if you need to. If you can memorise your figures and have them handy, it will be super awesome. It shows you know what you are doing.

3. Use your own money

You are the first investor in your business. If you can’t put your money into your idea, don’t expect others to do so. No matter how little it is, put your money in your business. It also helps to show others that you are serious-minded.

4. Horn your business Communication Skills

When you have done your underground work, ran your figures and even invested your money in your business idea, there is still a high possibility that you will not get the fund if you don’t know how to pitch your business idea correctly.

When pitching your idea, the first thing you should take note of is your target audience. Different things attract different sets of funders.

The investors are more concern with the scalability and sustainability of your idea, especially in the long term. Thus net profit (bottom line) and break-even analysis ( how long it takes you to generate them)  is fundamental to them.

The bank is interested in your cash flow and ability to pay to pack the principal and the interest. They are less concern with your bottom line (net profit), unlike the investors.

Most grant donors are more interested in the social impact of your business. They gave out money for a course and achieving that course is very important to them. If it is to create more jobs, they will be interested in your number of employees.  They always are concern with your environmental sustainability and social impact on the community or the less privilege and venerable.

Your friends and family will want to know if you will be able to pay back them their money back. Or that you will use the funds appropriately and expand your business. Some of your uncles will think you should not be asking them for money any longer because he has empowered you.

The summary is, you should know what your funder wants and design your pitch to amplify it.

A business pitch can be writing or oral. Whatever means you are using or you are required to use, always try to be clear, concise and straightforward. You wouldn’t want to bore your audience with unnecessary jargons or unfamiliar business terminology.

Now, where can you source your business funds?

 

Wrong Reasons for Starting  A Business

Wrong Reasons for Starting A Business

One of the major reasons many startups fail can be traced back to why they started the business in the first place. When your intention is wrong, your actions cannot be correct.

I will be sharing with you some common wrong reasons to start a business

1. Because I’m Broke

Everyone needs money. Even the rich get broke sometimes. But because you are broke is definitely not a good reason to start a business. Here is why?

Businessmen are not money people. Money is not the purpose of business it is a consequence. Any business that is built on the sole foundation of making money will soon run out of the market. The goal of any business should be to provide value and solve people’s real problem. Then people pay you for solving their problems. So if you are broke and you are not solving people’s problems, you can’t make money. Don’t get me wrong, you should make money from your business, but let that not be the only reason you are starting the business.

Another reason you should not start a business just because you are broke is that there is no guarantee that you are going to have your immediate financial needs met by that business. If however, you are lucky to make money, chances are that you will be spending the money when you ought to be multiplying it or growing your business.

So what should I do when I’m broke? look for a job. What if there are no jobs? that’s why you should look for it. There are really no Jobs.

However, if you have a solution to people’s problem and you are broke. That will be a perfect time to start a business because you have double motivation.

2. Because I don’t want to work for anyone

My mum told me that my granddad used to tell her that if a pot is leaking in my village, taking it to the next village will not prevent it from leaking unless it is repaired. Why do I start with this? If you can’t work for somebody’s business, you will most likely not be able to work for yourself. If you are lazy about working on someone, chances are that you will transmit the same laziness into your own business.

Laziness is not the function of the task or the taskmaster but your attitude. If you don’t deal with it, it doesn’t matter what or who you are working for, you will continue to be lazy. Business requires hard work if you are looking for how to run away from work, starting a business is not an option.

I can authoritatively say that business owners work more than employees. There’s nothing like weekend, public holiday and off -office hour for those who have businesses, especially when the business is still at a startup phase. Whether it is another person’s business or your own business, you are still working for somebody anyway. Either your employer(s) or your customers.

What if my job is too demanding, what should I do? Well, I don’t know. But what I do know is that if you are going to build a sustainable business, it’s going to be demanding as well. If you have a clear solution to a problem and you think people will pay you for solving it, then you are good to start a business.

3. Because I have an Idea

Yes, I mean it. Having an idea is not enough reason to start a business. First, it’s not all good ideas that are business ideas. If all people say about your idea is “wow! That’s a nice idea” without the corresponding readiness to bring out the money in exchange for the value, then you don’t have a business idea.

A business idea must not sound very ‘out of the box’ but it must be the one that will make people pay you. Whenever you have that mind-blowing idea, one of the first questions to ask is “who is paying for this value and why should he be willing to pay for it?”.

Secondly, not all ideas can be successfully or competitively implemented by you due to some limitations such as skill(s), market readiness, geographical location, legal demand, etc. In this case, a partnership becomes not only important but necessary. Remember, the idea is just 1%…execution is 99%.

You don’t just start a business because you’ve got an idea, but you must have an idea to start a business.