Many people would like to be self-employed but fear the risk — with good reason. Within five years, half of new businesses are out of business.
Ironically, you’re particularly likely to fail if you follow such standard business school exhortations as “Innovate!” While such advice makes for interesting class discussions and may be appropriate for “intrapreneurs” inside deep-pocketed corporations, it puts the average entrepreneur at grave risk of going bust.
The key to maximizing your chances of success is to do the opposite of what is taught in business school:
1. Don’t innovate; replicate. Being a guinea pig is so risky: Your idea or its execution could easily be flawed, or it can be so new that the public isn’t ready for it.
2. Don’t seek status; avoid it. Many business school case studies focus on high-status businesses, for example, biotech or high-tech. But the higher a business’s status, the tougher its competition.
3. Invest little. Business schools intone:”It takes money to make money.” For the average entrepreneur, that’s wrong. If you’ve invested a bundle in starting your business, the nearly inevitable costly setbacks can be deadly. So, choose a business that requires only a small investment and then run it as cost-effectively as possible.
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Photo by Street Signs USA.
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