Capital, Confidence and Concept

Conventional wisdom says that starting your new business is risky, although these days “risk” is a relative term.

It turns out that working for someone else is risky, too – as so many people have discovered in the past 18 months. Evidently, joining a union for the perceived promise of stability doesn’t remove that risk, and neither does working for the government.

In the presence of the risks of entrepreneurism, there are, however, two things you need to bring to the table in some combination when you make the leap to start your own business: Capital and Confidence. The need for these two elements exists in a constantly evolving, symbiotic dance because the amount of either that is available at any given moment varies.  In a general sense, the less capital you have, the more cajones you need to survive.

Nevertheless, many small business epitaphs have been written by entrepreneurs who had an abundance of both, but who lacked a solid, well-thought-out concept of what they were actually doing.  In other words, a bad business idea – or a good business idea executed poorly – has the power to trump everything else when it comes to achieving ultimate success.

The concept of concept is multi-faceted.  You can have a general idea of something that might make a successful business model and still have absolutely no idea how to actually make it work.  Which is why it makes sense to test your assumptions, build a good support system, increase your business skills and knowledge, and continually adjust your plan as you move forward.  That is a powerful reason why business coaching makes so much sense for first-time entrepreneurs and new business owners.

Of these three elements – Capital, Confidence and Concept – the risks of entrepreneurism are only alleviated by improving your concept.  Contrary to the assumptions of many first-time entrepreneurs, having what is perceived as “sufficient” capital doesn’t remove the risks at all – it only defines the amount of risk.   And, confidence – although absolutely essential to any entrepreneur – can actually increase your risk if it isn’t appropriately balanced by the other two pieces.

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