How many hesitate starting a business for fear of losing everything? Statistics indicate the odds are not in favor of new startups, with the failure rate as high as 70%. So, why bother at all? To answer this question, let us look at a real life example – a close friend of mine who recently decided to launch his own venture.
Meet Kevin the Engineer
Kevin is a gifted engineer who makes $140,000 a year. Over the last 3 years, he has been itching to start a consulting business and has taken every opportunity to pick my brain in preparation. Yet, he always found a convenient excuse to put on the breaks the moment he was ready to launch.
This time, however, he has incorporated, formed alliances with large contractors, is actively lining up customers and filling his pipeline. He is scheduled to start his first independent contract in early 2013. His plans are well thought out and methodical – far more than my own when I started out several years ago. Why are things so different this time?
The Final Straw
Kevin receives calls from recruiters several times a month, which he usually ignores. But a few months ago, a call from a competing company caught his attention. They proposed a position with a more significant leadership role, more pay and a shorter commute. After more than 20 years in his industry, Kevin knows his worth and set his price at 180k per year. Though he was told his number was within range, the written offer came in much lower at 150k. He realized he had hit a ceiling in his career. Even worse, his employer recently announced plans to downsize his department.
Most would think, thank God he had another lined up, but Kevin decided on a different course. He needed to see how far above the ceiling he could go. This provided the final push he needed to step into the world of small business.
Kevin has a wife who is a stay at home mom, young children and a new mortgage. Before buying the new house, he had a significant amount of savings but the purchase ate up a big chunk of the funds. For most, this would not be the best time to venture out on their own, and even I questioned his timing.
Then I asked Kevin a question that crystallized everything for both of us. “Assuming the worst and you fail miserably, how difficult would it be for you to find another job earning as much as you earn now?”
Without hesitation Kevin replied, “Not hard at all.” He went on for several minutes explaining why it would be easy, and his arguments were convincing. His numerous connections and stellar reputation as a leader in his field makes him a target for companies hungry for talent. This helped him realize starting his business was a no brainer, and inaction was riskier than the possibility of failing. Then, my favorite Mark Twain quote came to mind:
“Twenty years from now you will be more disappointed by the things that you didn’t do than by the ones you did do.”
So, What Are Kevin’s Chances?
I am optimistic about Kevin’s chances of succeeding. His preparation and planning go far beyond the typical new entrepreneur. He has advisors with expertise in law, accounting and business management, allowing him to focus on what he does best. Every conceivable piece of paperwork you can think of has been scrutinized. His emergency nest egg, though not as large as before, is more than what most new business owners start with. He also studies my book as if preparing for a final exam. More important is his willingness to embrace the role of entrepreneur, spending the majority of his time promoting his services as he transitions out of his current job. The same companies that tried recruiting him in the past are eager to hire him as a contractor. One of them already has a large project waiting for him.
Never have I had more respect or admiration for Kevin than I do now. How many people would turn down a $150,000 a year job to start a business in today’s economy? How many would take this type of a chance on themselves and go after what they really want? This is not theory or motivational hype. He is a true to life example of those who actually do it.
Still, Kevin is my friend who’s kids play with mine. Our wives know each other and we hang out at each other’s homes. This is not like advising just any entrepreneur. If things go wrong, I will have a front row seat to the drama, which is why I decided to reach out to the SteamFeed community.
So, what is your advice for Kevin? I have directed him to this post so he can benefit from the vast amount of wisdom and experience of this growing community. Go to the comments section, chime in, and let’s help create one more successful entrepreneur.
Godspeed and I look forward to seeing you in The Players Lounge.