We’re all being conditioned to be successful business owners. The job market is flooded with 1099 opportunities and commission only careers. The internet is flooded with YouTube videos and social media posts with the same title: “How I Made Six Figures in Four Months!” Sound familiar? It makes it seem like anyone could start a business. Actually it makes it seem like everyone should start a business. And why not? You want flexibility, financial freedom, and to be your own boss right? Well… it’s this mentality that causes 95% of all businesses to fail. So what makes a business succeed? Is it luck? Is it knowledge? Is it skillset? Luck can come into play, and has helped people become successful business owners (some who quite frankly shouldn’t be business onwers). There are a few things almost all successful business owners have in common.
Three Prerequisites Before Starting A Business
1. You need “High Income Skills”
Dan Lok, multimillion dollar entrepreneur, says this is the single most important prerequisite. Having high income skills simply means you have the ability to make a lot of money on something you do. For example, you might know how to get in front of company executives in order to sell office supplies. A high income skill is something you can always fallback on if all else fails. Without the skill, you can’t operate a business and here’s why. Let’s say you own an office supplies business where you hired two successful sales reps. Both reps get recruited to a competitor. Yoh have no sales skills. Your business sinks because revenues have stopped while you’re trying to find replacements. However, if you had perfected the high income skill yourself, you might have been able to fall back on your own income producing abilities to save your business.
2. You need to be able to build a scaleable business. (You need money)
In other words, can your business operate without you? You might have the high income skills, but if you’re doing everything yourself, what happens when you need a break from your business? Running a scaleable business costs money; so it might not be a good time to start a business if you don’t have excess capital. Why? Because businesses that rely only on you tend to fail (i.e. restaurants, bars, etc.). Don’t start a business without money. Remember, a scaleable business means it can run (and generate a profit) without you. You need money for staff, reps, systems, etc. And don’t forget that if all else fails, you have high income skills to help you until you can get your business scaleable again.
3. You need to have enough education to make smart business investments.
Part of running a business means you’ll have to make smart investments to generate revenue. For example, if you spend $1000 to hire an appointment setting company so you have more time to run presentations, is that a smart investment for your business model? It might be and it might not be. You need to be educated enough on running a business before running a business. Too many entrepreneurs mistakenly think they can learn “on the job”. While there are many learning opportunities a business owner will come across, it’s best to be as prepared as possible.
Maybe it’s never time to start a business.
The harsh reality is that not everyone should start a business; even most smart people with a great business acumen and an entrepreneurial spirit shouldn’t start a business. Think about why you want to start a business in the first place. Is it because you want more money? Most businesses aren’t profitable until year 3. Is it because you want to set your own hours? All business owners work constantly. Business is always on the mind. The reality is you don’t work 9am-5pm. You work MORE than that. Is it because you hate being a slave to the “grind”? Well, as a business owner you’ll be hustling more than you ever have in your life.
You should really only ever think about starting a business if you have ALL of the following:
- High income skills
- Business knowledge to create a scaleable business
- Money and education to invest intelligently
- Ability to see the long term picture
- Hard work mentality (it doesn’t matter if you know how to “work smart”. It’s hard work. No disguising it.)
Most people are happy with their high income abilities.
Your number one goal is to keep improving yourself so that your skills eventually net you a high income. This can take a long time. This is why some jobs want people with 5-10+ years of experience. If you perfect your skills and find a good company, you’re all set for life! You don’t need a business to be happy. Never forget the phrase “if it were easy, everyone would do it”. Ending up with a successful business looks easy, so it makes sense that a lot of people try it. But it’s not easy, which makes sense why almost all fail.
Most people are successful in their careers once they achieve high income skills. Who cares if someone else’s business is making money? Companies offer support you can’t get on your own.
Just remember. Think before jumping into a business, even if you have a really good idea.