October 30, 2014

Small Business Advice:

Business success takes skill, knowledge and passion

"It is with our passions as it is with fire and water, they are good servants, but bad masters." ~ Aesop

Jerry Osteryoung | 12/2/2012

Too often I think we do people a tremendous disservice when we say that anyone can be an entrepreneur, especially if they have passion. In my opinion, passion without knowledge can lead to failure so quickly.

When people come to me with questions about starting a business, the vast majority are looking to open a restaurant. Normally, these people are very good cooks who have worked in a few restaurants and they really believe they have the requisite skills to be successful.

Without question, these people have passion and desire – and even some experience – but I do everything I can to talk them out of starting a restaurant. I just know the failure rate in this industry is so high. Not only is a difficult business, but so many people lack the business background they need to be successful.

Now that I have said this, I know I am going to get a ton of notes from people saying I have completely lost my mind – which could be true – but I stand by this advice. Many of these folks believed it when their parents told them they could accomplish anything they put their mind to. I know I probably told my kids the same thing to give them confidence to take some risks.  However, in real life, this untempered optimism is just plain untrue and so dangerous as it encourages people to take too much risk without the knowledge to go along with it.

I recently met a very neat man who has an incredible passion for dogs. Ever since graduating from college, his dream was to open a canine massage business.

He has a business degree, so he understands that part. It is also clear that he has the passion and the knowledge, as he has had extensive training in canine massage. I would even say there is a niche for this type of business as massage therapy is already accepted for horses and is getting some attention for dogs too. However, what he and so many early-phase entrepreneurs forget is that there has to be a strong demand for your product.

He is having significant financial struggles. He has not taken a cent out for a salary and has put increasing amounts of money into the business over the two years it has been in operation. When I asked him if he had measured or attempted to quantify his sales, he said no. He had just gone for it with a very strong desire to make his concept work.

He had really believed the classic line from the movie Field of Dreams and was convinced that if he built it, they would come. But as I am always telling these folks, building it and having passion just is not enough to be successful. There is so much more to it. I try never to tell them not to follow their dreams, rather that they should only make a go of it after they have acquired the knowledge and experience they need to give them the best chances of success.

Now go out and make sure that with any new venture, you have all the skills and knowledge you need to be successful. You cannot just rely on passion and enthusiasm.

You can do this!

Other small business advice columns from Dr. Osteryoung are here. Note: Articles older than 30 days require registration (it's quick and free).

Jerry Osteryoung is a consultant to businesses - he has directly assisted over 3,000 firms. He is the Jim Moran Professor of Entrepreneurship (Emeritus) and Professor of Finance (Emeritus) at Florida State University. He was the founding Executive Director of The Jim Moran Institute and served in that position from 1995 through 2008. His newest book co-authored with Tim O'Brien, "If You Have Employees, You Really Need This Book," is an Amazon.com bestseller. He can be reached by e-mail at jerry.osteryoung@gmail.com.

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