A record 600,000 businesses were started in the UK in 2015. This sounds like inspiring news for anyone wanting to become their own boss, but this strength in numbers hides a common financial problem.
While start-up rates flourish, income margins for many small firms are tight, and research by AXA has found that a third of small business owners pay themselves less than £10,000 per year. Of course many people aren’t in it for the money. Turning a passionate interest into a business can have great appeal on its own merits, yet dreams can easily turn sour if all the risk and effort fails to meet a person’s financial expectations.
So what is the difference between those with the bravery to strike out alone, and those who also have what it takes to lead a thriving business that can grow to provide a decent living for themselves, while creating jobs and strengthening the economy?
From my years advising high growth start-up founders, I have noticed three common personality traits amongst the most successful entrepreneurs:
The initial honeymoon period can pass quickly when founders face the reality of taking their start-up to the next stage. Scaling a business can mean sleepless nights, having little or no money and navigating a apparently endless number of barriers – from HR woes to the increasingly complex funding landscape.
Through sheer force of willpower, great entrepreneurs turn what seems like an impossible dream into reality. From raising capital to attracting new customers, willpower helps entrepreneurs drive through the obstacles and naysayers they face on the pathway to growth.
Even with the best will in the world, sometimes entrepreneurs do not succeed. Successful founders need bulletproof skin to bounce back from failure.
Whether they have lost a client, failed to secure funding or are dealing with an employee who did not deliver, rather than dwelling on what has not worked out, the best entrepreneurs focus on solutions.
Resilience against setbacks and stress is not only necessary for growing a business, but also for protecting an entrepreneur’s wellbeing. Research from SwitchMyBusiness.com found that one in five small business owners think their health has suffered from the pressure of sustaining a business.
Ability to shake off stress, actively relishing challenges others would shrink from and a certain amount of blindness to unhelpful criticism can all be useful.
Recovering from setbacks can mean making difficult decisions quickly, and standing by them even if they are unpopular. When making critical decisions, entrepreneurs cannot afford to hesitate, over-analyse, or wait and see what happens. Indecision can leave the outcome to chance and hand the advantage to a competitor.
While boiling business success down to personality traits can sound restrictive, I think it’s positive to recognise that not everyone is suited to being an entrepreneur, especially as there are so many other options outside typical employment, from franchising to freelancing.
Whether you’re out to build the next Uber, or just want to explore an interesting sideline, the key is to think through what success looks like to you and what you’re able and willing to sacrifice to achieve it. This might not meet everyone’s definition of a high-flying entrepreneur, but success on your own terms can be the sweetest kind.
Bivek Sharma is head of KPMG Small Business Accounting.