CONFIDENTIAL

Entrepreneur report

for

Sam Sample

Produced by Selby & Mills in partnership with

totaljobs.com


Report Date Monday 12th January 2004


This report has been prepared with every care and in good faith. However the interpretation arises from the sum of the candidate's choices and preferences in answering a series of self-report inventories, and should therefore be seen purely as indicative of certain trends in their attitudes at that time.

No liability can be accepted by the interpreter or by Selby & Mills Limited.


© Copyright 2003 Selby & Mills Limited and Thames Valley Partners Limited
Prospect House, Prospect Place, Beechen Cliff, Bath BA2 4QP United Kingdom
Phone +44 (0)1225 311399 Email info@selbymills.co.uk

All rights reserved.
No portion may be reproduced by any process whatsoever without prior written permission of the copyright holders.

INTRODUCTION

The "Entrepreneur?" questionnaire, which you recently completed, asked you questions about yourself, your values, about things which are important to you, and about how you work with other people.

This report is individually prepared for you personally, based on your responses to those questions, and discusses a number of factors about you in relation to self-employment. It is not a statement of absolute truth, but rather a series of observations, deductions, and inferences and should be studied carefully to see what lessons can be learned to assist you in deciding whether or not, and how, to go ahead with your new venture. We recommend that you discuss the results in some detail with someone (or some people) whose judgement you value, especially where the comments appear to conflict with your own opinion of yourself. One or two of the comments may indeed be inaccurate, but don't let this distract you from the overall meaning of the full report.

What this report does

The main purpose of this questionnaire is to help you appraise your strengths and analyse your weaknesses more carefully before you embark on the next stage of your career. The report aims to assist you to build on your strengths and to enable you to seek back-up, training, the support of others, or other services to support those areas of your personality and skills/experience needing attention. This applies whatever you decide to do, but especially if you are pursuing some form of self-employed option.

The nature of Self-Employment

Note that many aspects of being a self-employed/independent consultant or interim manager are closely equivalent to other self-employed options. However, in some ways such self-employment can also be close to the role of a professional employed manager in a commercial enterprise. Similar comments may also apply to the self-employment of those considering the purchase of (or buying a major stake in) a significant employing company as (part of) a management buy-in or buy-out. Some of the attached comments may therefore need to be read with caution if you are considering one of these options.

Please bear in mind that many people aspiring to self-employment have a tendency to see themselves through rose-tinted glasses and answer this questionnaire visualising themselves as they would like to be rather than as they are. This is particularly so with the 'social acceptability' questions (e.g. "Are you good with people" or "I learn from my mistakes") where there is a high temptation to say "Yes, very like me" when the truth may be somewhat less positive. Many find it hard to be totally objective about such issues. The comments included in this report assume you have answered all the questions truthfully and objectively.

Please read the complete report before you consider the implications for you and your potential new venture. Many of the comments may apply very closely the second time you read them!

Finally, a word of caution...

We have purposefully set the criteria for success fairly high. Our benchmarks are set for people who can start and run very successful and profitable enterprises - indeed, 'making millions' is taken as the interpretation of being very successful indeed - only the top very few taking this questionnaire will fit this profile. If you receive a 'lower than average' or 'average' result in the next section 'Your personal profile', it does not mean that you cannot be successful, but rather that your level of success based on the above criterion is unlikely to be 'very high indeed'. However, many people run independent businesses that they themselves consider to be successful e.g. where the business provides them with employment, or meets a need such as topping up a previous employer's pension (adequate or less than adequate), or a role which covers the costs of a 'grown-up hobby', or indeed one which represents a very satisfactory second income to support a main income stream earned elsewhere. We each have different criteria for our own success and you must apply these to your own situation. What we have done is to paint the overall canvass.

The section which comes after 'Your personal profile' is entitled 'Areas for further consideration' and sets out some comments we believe you should find helpful if you decide to proceed with establishing your new business.

SECTION 1 - YOUR PERSONAL PROFILE

INTRODUCTION

The personal profile of the successful entrepreneur can include a wide range of qualities, skills, and experience which in part depends on the business sector of the venture he/she has started and method of entry for the operation. Even where budding entrepreneurs have similar profiles, some will succeed and others fail as fate or external circumstances play their part. Self-employment may suit some people and be a disaster for others for reasons only discovered long after the decision to start up the venture has been taken. However, a careful review of your strengths and weaknesses and of this profile will indicate your general potential for success. Remember - if you are serious about your new venture, it's better to face some perhaps unwelcome truths now, rather than meet them and their consequences a few months after you start.

Some key factors for success include resilience, persistence/determination, hard work, having selling and marketing skills, showing sound judgement, having a 'killer instinct' or 'ruthless streak', showing sufficient flexibility, being customer aware at all times, having the ability to play hunches successfully, with creativity and self-confidence, coupled with some previous experience in the same business area. You certainly also need to like the work you do, as it will form a major part of your new life.

Your Responses

As we mentioned above, we have set fairly high criteria for the definition of 'success' - put simply, this could be defined as 'making a lot of money'. Using this criterion, as an overall comment on your responses to the questionnaire, we must ask whether you feel you really are prepared to make the necessary sacrifices to run a successful business and to question whether you have the necessary skills and experience to do so. Compared to our role model of 'very successful entrepreneurs', your responses show significant gaps. Might you be better going back into employment - or do you perhaps want a part-time non-demanding role instead which might allow you to venture slowly and carefully into the field of self-employment? Based on your responses, it appears that staying in, or returning to, employed status would be a better option for you than self-employment, if it is available. For some people, the dream of self-employment should remain just that - a dream, long maintained but never to be pursued. There appears to be a high risk that self-employment could, in your case (if involving a significant investment), lead to you losing everything rather than earning your fortune.

It could also be that your criteria for success are materially different from the 'very successful entrepreneurs' considered as role models, for example if you are looking for a small second income or a part-time fairly undemanding role. Carefully evaluate what you want to achieve out of the new venture and your chances of achieving success in your terms.

If you believe that the surrounding circumstances give you no other option but to try to start your own business, and especially if you have concerns about doing so, review the major areas identified in the report below as requiring attention and seek appropriate professional and other assistance to address them, especially before investing heavily in the new venture. Plan your approach carefully.

Perhaps you could seek assistance in actually running the business by involving a partner, making sure that he/she has at least some of the necessary and missing skills, or has worked in or run such a business as you plan to start. You yourself might benefit from a period as a paid employee or associate working in a similar business for a time to gain valuable skills and experience, and perhaps making new business contacts before starting out on your own. (Note that taking up a franchise with business training will not necessarily provide the missing skills to the level you need).

It is perhaps possible that you might make a success of your own business venture measured against 'very successful entrepreneurs', but at present, based on your responses, most of the odds seem to be stacked against you. Necessity or new-found determination, or the ability to find a partner to provide the necessary 'own business' impetus, or even sheer luck, may be what you need to move you along the road to success. Alternatively, your own criteria could be different and success against these different criteria can be possible; in either event, care and preparation are essential.

In getting ready for your new business, the preparation of a comprehensive business plan, whether or not anyone else is involved in your decisions, could make a significant difference to the chances for success. Business plans are not just for banks and do not require extensive financial analysis. More important is a review of the key strengths, weaknesses, opportunities and threats for your planned venture, considering the 'what if' questions and what you can do about them (e.g. "What if sales are half what I expect?" or "What if there is too much work for me to handle?") The most important part of the plan is the thinking that you put into it; it is far better to consider problems and possible actions to compensate well ahead of time. Planning is hard work, if done properly, but invaluable for a new venture.

AREAS FOR FURTHER CONSIDERATION

Determination

Most believe that a key determinant of creating a successful business is a fiery determination in the founder to be responsible for an independent business and a keenness to make a lot of money. Your responses to the questions show a lower than average determination and, whilst this does not mean you cannot be successful in running a business to your own satisfaction, it seems unlikely that other people will describe it as very successful, especially in financial terms. Does your commitment measure up to your business needs?

Commitment

Your new business will almost certainly require a higher level of interest than you appear to want to commit if it is to be reasonably successful in other people's eyes. From a personal point of view too, as you are likely to be spending more time in the business and thinking about it (whether you like it or not!), it would be sensible to find something which energises you, rather than pursuing something rather half-heartedly.

Initial income

Most businesses take up to three years to achieve a 'normal running rate' of income, i.e. to become fully profitable, and many fail in the first three years. If income is essential to you in the first year or two, the option of taking employment while you establish a 'fighting fund' or 'war chest' before you start your business may prove attractive. If you have achieved or put by some initial funds to start your business, consider carefully how long these funds will last and how you will replace them. In consultancy for example, individuals sometimes gain an initial contract from a former employer or client but then find the follow-up work difficult to obtain.

How will you protect your position after the initial period?

You can also make money by not spending it or by generating another income alongside. Have you really exhausted the possibilities for reducing your spending - or of possibly persuading other members of your family to contribute to the overall income? If you really do want to start a business, you may have to consider some alternatives which presently are unpalatable to reduce your outgoings or generate other income (at least temporarily).

Risk

In considering the move to self-employment from employment, many see the self-employed option as much more insecure, with higher risks - offset by more excitement, reward, independence etc. In the last ten years, traditional employment has become much less secure and you may wish to consider, and then seek to evaluate, whether the risks and insecurity of self-employment really are greater or are they just different from those risks met in employment. Perhaps the key to success in this environment is to seek to anticipate problems, measure risk, and plan for action.

Action

Your responses to the questions about work rate appear inconsistent, but the following may be relevant.

Work-rate

Experience seems to show that the work rate required in starting and running your own business is often much higher than it is in employment. This seems particularly so in the early years of the new venture when the entrepreneur has to cover a multitude of tasks, not only for the base business, but all the support services as well. Your responses indicate this increase may not be to your liking, (unless you are already working all the hours available and cannot work more!), so perhaps you should rethink your objectives to allow you to meet lower targets or accept a higher work rate.

Operating Style

Self-employment also brings with it some added responsibilities and you may not be able to operate completely as you wish. Customers, staff, suppliers, the bank, etc. all make demands on your time - some of which may not have interfered with your previous working or social life.

Plans v Action

Whilst the ability to take fast effective action is undoubtedly an asset in running your own show, a degree of forward planning could help avoid unfortunate outcomes - which, if they occur, you would have to resolve. This appears to be an area you would not describe as one of your strong points. Detailed costed and written plans running to many pages are not necessarily required (unless, for example, you need to raise external finance or if you intend to be involved in starting a larger, more complex business) but preparing a short review of the facts surrounding your significant decisions and considering the alternatives or 'what if' scenarios could prove a useful exercise.

Survival planning

It is essential for the survival of your business that you keep in mind, and guard against, the possibility of failure in your new business. Most new businesses fail, however depressing that may sound, and it is therefore better to consider now the causes and effects of failure. Generally businesses fail through poor marketing and selling skills. However, there will not be time to worry at length about it, especially once the business is under way. You will need to plan for survival and growth, to consider your tactics to ward off the major threats to survival, such as lack of new business, bad debts etc. and to address problems effectively and with determination as they arrive. Remember that if you don't tackle the problems, no-one else will and they may come back to haunt/bite you!.

Survival planning

One of the less attractive aspects of a new business is that a very substantial majority of such firms do not last the course. Depending on the area of your choice, you could be looking at up to an 80% failure rate for new businesses within two years mainly through poor marketing and selling. Such a possibility should not worry you on a day-to-day basis, but a degree of forward consideration of the key weaknesses of the business will pay dividends. Some are obvious - lack of new business, bad debts etc. but also consider over-trading (trying to run a business with insufficient finance) and too much demand for your services/products.

Delegation

Your responses suggest that delegation may not be one of your strengths. You may feel that this is unimportant in running your own business as there may be no staff to whom you can delegate. However, time management can be a problem in starting a business and you will still need to delegate some tasks to paid-for specialists such as lawyers, accountants, designers, cleaners etc. By all means control spending on such external services as much as practicable but also consider how best your skills should be applied. The independent consultant who completes his own accounts and tax returns might be better employed using an accountant and undertaking extra paid assignments and/or marketing in the time so freed up.

People skills

One of the key attributes of the successful entrepreneur is the ability to 'sense' other people's needs, emotions etc. and to manoeuvre his/her way through to success as a result. This is almost essential for success in managing a smaller business, in developing markets, in achieving sales and, more importantly, repeat sales from existing customers. You have identified this as an area where further development of your skills may be needed.

Fairness

Operating your own business may not allow you the time or luxury of giving the importance you believe is required to being fair to your employees, customers, suppliers and others. That is not to say that you should stray outside the law or good commercial practice, but the saying "It's a hard world" was coined with the self-employed in mind. Be prepared to be adequately hard-nosed to achieve the objectives you have set yourself, even if it entails not being totally fair to all others. Of more concern perhaps is the required need to keep your customers happy - which may at times feel that you are being less than fair to yourself (or your business).

Criticism

When you are working for yourself, criticism is something you listen to, consider and only reject if you are sure that it really is ill-founded. Immediate rejection of criticism may be as flawed a policy as instantly taking it all on board. You will often find that others have something to contribute to your progress, if only that you may learn from their mistakes. Generally people seem more prone to offer criticism than positive advice; consider how you can utilise their input, rather than rejecting it out of hand. Often too, a helpful comment from someone can sound like criticism to the recipient - check it out!

Criticism

In operating your own business, criticism must be welcomed, for others may have something to offer you in your venture. However, acceptance of all criticism and adjusting your progress to take the criticism on board without full consideration of the facts and alternatives (or even acknowledging your feelings) may be as great a mistake as ignoring the criticism altogether. Given your responses, be careful about accepting other people's views too readily. Although they have something to offer, they are not responsible for running your business. You must sift out the good from the rest. Often too, a helpful comment from someone can sound like criticism to the recipient - check it out!

Range of skills

Initially at least you may need to consider tackling a wider range of tasks in the business than you would wish. There may be no other employees to whom you can delegate and whilst this must be balanced with a requirement to maximise the profitable use of your time, in the early days it may be better for you to spread your skills more widely than to subcontract the requirement to outside services. Your answers indicate a lower than usual willingness to undertake a wide range of tasks and you should review this.

Alternate views

Two major benefits often seen by those who are about to start their own businesses are the time saved by the absence of meetings, and no longer needing to persuade colleagues before taking action i.e. being able to operate quickly on one's own. The converse is that there is no longer anyone with allied interests with whom to 'chew the cud' on major issues or changes. If you enjoy being able to discuss problems with others prior to taking action, or you rely on the skills of others to some extent, you will need to consider putting these in place for your new business - whether on an informal or formal basis. However you will need to remember that other people will no longer have the allied interests that your former business colleagues had.

Contacts

You have identified one of your strengths as the maintenance of business contacts. This should bode extremely well for the future of the business; just be careful that you do not spend too much of your time having a good time with your contacts - leaving no time to generate sales or manage the business!

SECTION 2 - SPECIFIC ISSUES

The next part of the questionnaire asked you about three specific areas which will impact on your new business venture - money, family issues and business skills; detailed comments on each area follow.

SECTION 2(a) - MONEY

Many new businesses fail for financial reasons, although the causes behind these financial reasons may be nothing directly to do with money. In any new business, more attention than usual will need to be given to the financial side of things as the business has no reserves generated in previous years to fall back on should problems be met. In the specific area of money, your responses indicated the following key concerns:-

If you are seeking external finance for the business, one of the key qualities that professional lenders or investors will seek is identifiable prior experience. This is based on their own experience that this is essential for success in a new venture. Your responses suggest that it could be valuable for you to seek part-time or full-time employment with an established organisation to gain some of this operational expertise prior to establishing your new business (if this is possible). This comment applies even if you are not seeking finance, as you will be making a major investment of your own time and perhaps money into the venture; you should not ignore the experience of professional investors.

The safest route to establish most new businesses is generally to minimise the spend until after income is received. Having a high 'burn rate' i.e. rate of spending, increases the chances of having insufficient cash to continue, as well as increasing your investment in the business which must be recouped from the profits to be generated later. Some businesses do require a high initial investment, but in these cases you would be well advised to evaluate fully any alternative strategies and consider how to minimise the risks.

Your answers suggest that you have not yet fully identified the risks involved in your business venture. You should seek to identify such risks, discuss them with others in similar business, as well as talking to your professional advisors and any others able to offer advice, and then evaluate the costs and implications of failure. Only then should you proceed to act on your plans.

SECTION 2(b) - FAMILY ISSUES

In this section, the word 'family' is used to describe those close to you, whatever the relationship. It includes people who will be affected by your decisions, people with whom you relate regularly, and those who have concern for your welfare.

Moving into self-employment can cause a number of stresses and strains to emerge in your personal life, if only because the divisions between personal and business life become more indistinct. Be aware that what seems obvious to you may not be clear to your family (and vice versa) and pay particular attention to the following:-

The establishment and operation of a new business is very time consuming and you will need the support of all of your family in your decision. Conversely, you may be able to derive some family benefits by involving them in your business decisions, by being able to pay them for work done, or possibly by using 'flexitime working' to enable you, for example, to attend that school sports day or some similar non-work event occurring in working hours. Overall, it is likely that you will have less time for yourself and your family in your own business than in employment.

You may have considered your options and wish to proceed to establish your own business, accepting all that this entails in exchange for the personal and financial benefits you believe you can foresee. It may be somewhat harder for those close to you, who may not derive the same pleasure from the new work environment, to accept restrictions on their spending or expectations. You have indicated this to be an area of concern for you, which should be addressed before you become too attached to your plans.

Some of your friends and neighbours may envy your decision to opt for self-employment, others may see it (for example) as the result of your inability to gain permanent employment or as a lower ranking job. For those who have held senior positions in industry or commerce, the impact of any perceived loss of status may, perhaps surprisingly, be shared by the partner and children.

Your responses suggest that your health is of concern to your family, who may well be more realistic about it than you! Remember that in your own business, there may be no-one else to 'carry the flag' when you are ill, and there will probably be limited, if any, sickness benefit payable. Should you be taking any other action - or should you even be considering the option of self-employment?

Experience has shown that it is an undoubted advantage for those intending to start a business if they are born into a family where this is customary. If your family does not have this history, there is clearly little you can do now except seek to be the first in the family who does it successfully!

SECTION 2© - SPECIFIC SKILLS

In this section of the questionnaire you were asked about specific skills related to the running of an 'own business' rather than about the specific skills you would need for the business idea itself. In general, the establishment and running of an 'own business' requires a wider range of skills than in employment; you identified the following as worthy of further review:-

It is axiomatic that there are a number of skills essential to your business and there are others which are desirable, but which could be either learned or subcontracted out. Your responses to the questionnaire identified that you feel a lack of necessary skills, which is part way towards gaining these skills by learning, development, or subcontract/staff employment. Discuss with someone you respect and trust how you might gain the missing skills through reading, courses, training, assisting others in their business, or by using others in your business etc.

Probably the key activity in any 'own business' is selling. If you cannot sell at all, perhaps you should not consider going into business on your own as all businesses require a selling operation. You have identified this as an area of weakness for you and it should probably be addressed before almost anything else. Consider attending sales training courses in your specialist area - or indeed in any area - read widely, talk to others who need to meet customers in a similar way. Seek to learn from other people's experience rather than waiting to learn from your own.

Professional advisors will be needed in most self-employed situations, if only for accounts and any legal issues (e.g. contracts). To identify someone suitable, the best recommendation is a personal one from someone operating a business of similar size. Try to line up your advisors before you need them desperately, and remember that in most cases they charge for their time on an hourly basis - so prepare well for meetings.

If you cannot identify a lawyer through your business or personal network, you could contact the Law Society for suggestions and if you similarly cannot locate an accountant, get in touch with the Institute of Chartered Accountants, the Institute of Chartered Management Accountants, or the Institute of Certified Accountants.

Your response to the questionnaire suggests that your computer skills are not strong. Most businesses today can benefit from the use of computers and you should seriously consider undertaking some training in basic skills covering perhaps word-processing, accounts spreadsheets and databases. Clearly there are many other options depending on your business e.g. presentation software such as PowerPoint or contact databases such as ACT!.

In considering how to bolster the skills you already have and covering for or reinforcing those where you are weak, think of people you know who already run their own businesses. Talk to them about their successes and failures and seek their advice. Many people in self-employment seem only too happy to assist others to make the jump - the only return required being that you do the same for someone else. There is nothing like your own real live experience to assess your skills, but access to the experience of those you know before you jump is very valuable.

You have identified one of your strengths as the generation of new business ideas. This can be a valuable asset in overcoming problems and identifying alternative routes to success for the business. You may be the one who keeps his head in a crisis, when other businesses are failing due to executive panic; you could be someone who uncovers a major opportunity instead. A risk you may need to face is an enthusiasm to pursue the latest new idea instead of effectively implementing earlier plans profitably. Too many new ideas can be as limiting for the business as too few if there is no time to achieve commercial success. Brilliant ideas poorly implemented are not nearly as successful as basic ideas brilliantly implemented and carried through to completion.

This is the end of your report.

© Copyright 2003 Selby & Mills Limited and Thames Valley Partners Limited

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