Unlike previous generations, millennials appear to be less interested in starting their own businesses, preferring instead to work for mature companies with proven track records of success. According to The Wall Street Journal, 11.6 percent of those under 30 owned businesses in 1989. Today that figure is only 3.6 percent — a troubling trend.
“The statistics show the odds of success for a new business are pretty dismal,” says Randy H. Nelson, author of The Second Decision: The Qualified Entrepreneur. “Half of new U.S. small businesses fail in their first five years, and 70 percent have gone under by year 10.” Drawing on the experience of his 25-year career, Nelson has identified the factors which lead to the greatest chances of success:
Just like people, businesses go through a life cycle. Many entrepreneurs are at their best at the startup stage. They excel at building something from nothing. But as the needs of his business evolve, so must the entrepreneur. Nelson breaks down the corporate life cycle into four stages: The first involves getting the business started, while the second requires the entrepreneur to define his role. This stage often involves turning over responsibility to others. In the third stage, an entrepreneur may realize that his family and personal life have suffered from his commitment to the business. And finally, the entrepreneur may decide to exit the business.
A successful entrepreneur knows how her strengths and weaknesses affect her business. Nelson suggests developing connections with entrepreneurs who have been through the corporate life cycle stages. Their expertise can uncover blind spots. “Ideally, entrepreneurs and CEOs would be more knowledgeable than everyone we manage,” says Nelson. “That’s rare, though. The rest of us would benefit from a better understanding of the vast reaches of what we don’t know.”
The entrepreneurial spirit has always been part of the American psyche. If you’re set on owning your own business, take the advice of those who’ve gone before and develop the traits of a qualified entrepreneur.