In his online article in “The Owl” in early August, Todd Hirsch, chief economist with ATB Financial, reported some revealing statistics.
In June 2014, 395,991 companies were registered in Alberta. According to Statistics Canada, nearly 60 per cent of those companies were “micro-businesses,” employing just one to four people. Another 17 per cent employed fewer than 10 people.
Small businesses (with fewer than 50 employees) accounted for 98.1 per cent of the companies in the province, and large companies with more than 500 employees made up only 0.2 per cent of the total.
“All sizes of companies contribute to Alberta’s vibrant economy and small companies are more than carrying their weight,” stated Hirsch.
Entrepreneurship is thriving in Central Alberta. A particular highlight in the 2012 Stakeholders Report released by the Red Deer Regional Economic Development alliance indicated that Red Deer had more small businesses per capita than any other city in Canada (7.5 small to medium-sized businesses per 100 people).
Entrepreneurs are known to possess a variety of talents, aptitudes and character traits. Passion, attitude, mindset, vision and drive are common descriptors. However, innate talent doesn’t always guarantee business success.
There are primarily five levels of development on the entrepreneur scale.
Similar to any growth curve, each level involves a specific mindset and a strong belief system, combined with a willingness to learn and embrace change.
Level 1 on the scale describes individuals who possess the “self-employed” mindset. There is the desire to gain control over one’s life.
Working 9 to 5, usually under supervision, isn’t fulfilling. They want more autonomy and firmly believe that they could do their job and operate their own business.
Many entrepreneurs replicate the job they know how to do, in the same area of expertise, selling a product or service they already know. Logically, this should be an advantage, but only when business fundamentals are in place.
They launch into business, juggling business operations while doing the same type of work they did as an employee. They haven’t created a new role for themselves.
They work 60 to 80 hours a week and never get a day off. Burnout soon follows.
They often don’t take the time to learn the basics of business. They may have little to no financial knowledge and are hesitant to take advantage of the talent and experience others could offer. It’s challenging to evaluate and respond to new opportunities.
Many men and women devote time, energy and money only to discover that entrepreneurship is not the right career path for them. This realization can take months or even years, with financial resources depleted in the process.
It is often stated that 80 per cent of businesses fail within five years of startup. The top factors contributing to this statistics are lack of planning, insufficient capital and poor management.
The fact is, businesses don’t fail because the owner didn’t work hard. They fail because the owner never progressed on the entrepreneur scale to learn the “rules of the game.”
Those who strike out in new and unfamiliar territory are forced to learn, be open-minded, and rely on experts for assistance. These ingredients are the keys to entrepreneurial success. They force one to evaluate the entire business system from a new and fresh perspective.
That goal is to envision and develop a business that works for the owner, rather than the owner working for the business.
This concept is the key for rising through the ranks of entrepreneurship.
In my next column, I’ll present the four levels on the entrepreneurial scale that eventually lead an entrepreneur to the definitive result: a commercially profitable business that works without the owner.
John MacKenzie is a certified business coach and authorized partner/facilitator for Everything DiSC and Five Behaviours of a Cohesive Team, Wiley Brands. He can be reached at email@example.com.