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Entrepreneurship

Craig Allen: When It Comes to Entrepreneurship, Don’t Follow Your Dreams!

We have all heard the old adage: “Follow your dreams,” when discussing entrepreneurship, starting businesses, being successful in life, etc. But if you look at that phrase, I think the word “follow” fails to adequately capture the active nature of what it takes to succeed.

The word “follow” indicates taking a rather passive approach to pursuing success. As an entrepreneur, passive actions rarely produce meaningful results.

A much more appropriate statement of purpose would be: “Pursue your dreams.” The word “pursue” captures the active nature of the process of entrepreneurship as it relates to driving potential success.

While some may read this and feel that the difference is merely semantics, it is critically important that entrepreneurs develop a specific winning mindset and apply that mindset to every action they take in furtherance of their entrepreneurial goals.

Too often, entrepreneurs — either out of frustration, confusion or exhaustion — lose their focus and allow things to simply happen, rather than taking a specific action through well-reasoned decision-making.

There are countless examples of this that can occur at any stage of development of the enterprise, from simple decisions about hiring family and friends instead of actively seeking the most qualified candidates for critical positions, to accepting contract language from suppliers because it is expensive to hire qualified legal counsel, to accepting sub-par prototypes for product designs because the timeline is becoming compressed and there is limited time to secure an alternate source.

Entrepreneurs reading this will no doubt think of instances when they have lost focus and allowed things to happen to them, rather than actively driving the company development process.

We all make mistakes, but by thinking and acting actively rather than passively, many of the potential pitfalls can be effectively avoided, or at least the negative impact can be minimized.

We can look to just about any successful person to see this principle in action. Think of your favorite actor or musician. I play guitar, so I can relate this concept to Jimi Hendrix.

What if Hendrix decided to just sit in his room and play guitar, and hope that somehow, someday, someone would discover how good he was, instead of going out on the road and playing venues, eventually ending up in New York, and then London? It is very doubtful that any of us would have ever heard of him, and he would probably have ended up cutting grass with his dad for the rest of his career in Seattle.

It is not enough as an entrepreneur to have a good idea. Good ideas are a dime a dozen. Entrepreneurs who want to succeed in building a successful enterprise have to actively pursue that success.

There is no clearer application of this principle than with regard to the funding process. In my experience, entrepreneurs believe that their business concept is usually the absolute best business idea ever. If they didn’t believe that, they wouldn’t take the risks involved in pushing the concept forward.

That belief is powerful and compelling. The problem is that every entrepreneur believes it. When interacting with investors, entrepreneurs must realize that every entrepreneur the investors meet will have the same level of belief and enthusiasm about their idea.

It is not enough to simply show your idea to investors, and expect them to pull out their checkbooks and start writing. Many investors view hundreds of deals each year.

To stand out from that crowd, entrepreneurs must actively pursue engagement with investors. They must anticipate any potential red flags that investors may raise regarding the concept, and must have a compelling response to not only address that issue, but place a positive spin on it.

Most important, most investors, when all is said and done, invest in people, not in ideas. Yes, the idea must be compelling, but as stated above, every idea they will review is likely compelling to some degree.

To make yourself stand out, you must create the strongest sense of character and confidence in the eyes of the investor. If the entrepreneur can bridge their concept and their personal experience, expertise, passion, creativity and leadership skills, and make the investor like them, they will have the best chance of standing out and securing funding as a result.

While I have discussed a few examples of the application of the active nature of “pursuing your dreams,” this mindset can be applied to just about any situation you will face as an entrepreneur. It should become second nature over time, as you implement it, so that eventually it will happen organically, supporting all of your key decisions.

While simple to state in words, and to explain in concept, the application of this principle can be very powerful and helpful to entrepreneurs, especially in the earlier stages of company development.

This is also a mindset that should be shared with team members to foster company-wide active decision-making in pursuit of the collective success of the enterprise.

Craig Allen, CFA, CFP, CIMA, is president of Allen Wealth Management, and has been managing assets for foundations, corporations and high-net worth individuals for more than 25 years. He can be contacted at .(JavaScript must be enabled to view this email address) or 805.898.1400. Click here to read previous columns or follow him on Twitter: @MPAMCraig. The opinions expressed are his own.

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