Posts tagged ‘entrepreneurship test’

The Entrepreneurship test

kid selling stuffPeace everyone.

With more and more young, educated people joining the rat race every day, startups are the order of the day. despite over 16-20 years of schooling and professional education, its sad to note that not even one institution of the world trains people on how to start their own work. We are all taught how to be compliant, acceptable pieces of machinery that help the rich get richer each day.

Some basics of how/when/where to start a company are given below, it is hoped that it will benefit the reader in planning out  what is practically possible and what’s not. Its also a test, in terms of state of mind. Most of us don’t have the right reasons to start something commercial, which is why it blows up in our faces more often than not. So lets start with ten basic yes/no questions that all of us should ask ourselves before doing something on our own.


The TEN ‘yesses’ needed to enter entrepreneurship mode

1. Do you actually want to start something that will be completely dependent on you and no one else, for the rest of your life?

2. Aside from academics, do you have the practical experience of running something commercially viable in your business vertical? – simple version – Can you make it work all by yourself?

3. Are you financially capable of surviving the gestation period of your business (6 to 12 months)? Simple version – can you go without making a dime for a year?

4. Are you good at making your own decisions and seeing them through, regardless of the outcome, positive or negative?

5. Are you satisfied with what you are currently making with your current employment/commercial scenario?

6.In case you intend to borrow investments, have you ever taken a loan from someone that is 10 times greater (or more) than your monthly income potential, and paid it back within the agreed term?

7. are you good with numbers?

8. are you good with words? can you read /write /communicate perfectly well in at least one major tongue in your region?

9. are you aware of the legal/commercial rules and regulations applicable on your region of operation?

10. Can you make your start-up your number one priority (over family, friends and loved ones, sleep, food, entertainment etc) for the next one year?


In case any of the above is a ‘no’, or even ‘maybe’, wait until its a confirmed yes. Might take a while, but its better that way. An explanation of the questions is given below (for people who might not be sure regarding the answers).


1. Commitment - Your company/start-up is like a child, it cannot survive without you. once it is on its feet, its like a beautiful woman that no one other than you will be sincere with. Because its yours, not theirs. you know the rest :) So, don’t get into it if you cant commit to it for life.

2.  Expertise and Experience- If you don’t know how its done, stop fooling yourself that it will work. Even if it does, those that make it work will take it over, sooner or later. To retain authority, you need to be the best at what your’e doing. also, you need zero dependencies on people, from start to finish. You need to know how to do EVERYTHING yourself, so if in case someone leaves you down the road, your hands are not tied. This is why it is always recommended to work at least 5 to 10 years in the same business vertical before starting on your own.

As an example: the most successful businessmen in this world are jews and memons (a cast in karachi). Memons have a basic principle that they always have their children start their own businesses at age 20 or less, AFTER having them work at the root level (teller, clerk, accountant, shopkeeper etc) for at least 5 years in a business that DOES NOT belong to their parents directly. Similarly, you wont see Bill gates JR. in microsoft, or Jobs JR in apple etc. An Entrepreneur is self made, merit based. A son running his father’s business is a safe, employee mindset.

3.  Financials - perhaps the biggest mistake all start-ups make, they assume they’ll start making money instantly. If its not financially well timed, even the best business model will flop. Nothing works without money, not even your relationship with your parents :) . If you need money every month to ‘pay the bills’, you cant start something on your own, until you’ve hedged up at least an years worth of running finance.

4. Perseverance/leadership -  entrepreneurship is not for gullible people. You need to be obstinate, convincing and influencing, an individual that walks their path through even if they have to do it alone. If you’re not, don’t try to take up this responsibility. People can only follow a leader if he can follow his own set direction himself. People that switch plans mid-way, or go around in circles/are impulsive – they are better off finding someone they can follow. examples, Martin Luther King/Abraham Lincoln are leaders, Britney Spears/Michael Jackson are not (and never will be, despite being more popular among people).

5. Commercial viability - second biggest mistake – people make start-ups because they believe ‘they’re not getting paid enough’. By making a start-up you’re actually putting yourself in a  more severe position. When employed, you just had to convince one person to pay you more (your boss) – which did not happen. Now you’ll be at the mercy of 8 billion people, good luck :) . You can only make money in this world if you know how to get what you want in life, and it starts with negotiating a good employment deal. Anyone that can’t do that will never be able to do better as an entrepreneur. Also, you always make more for less effort in an employment. So if the objective is to make a lot of money and have a good time without working too hard, stay employed :)

6. Investments -  Third biggest issue (if you make it this far). Preferably, do it all yourself. if not, know who to involve and who not to. There’s no such thing as a ‘sleeping partner’, they only sleep until you go profitable, then they will grow brains and try to tell you what to do. Scale down your business, try to make a profit on a small amount first. once you have a cash cycle done/proof of concept completed, magnify the scale (ideally using the money you make from the business/your own investment). As an example, i’ve started 3 companies before my current one, and I’ve had to leave all of them after making them profitable owing to the fact that i had ‘sleeping partners’ financing me. Its only your business if its your own money, else its everybody’s business, in which you’re ‘somewhat employed’.

Its also advised that you have some experience of paying back on time , before starting a company. An example would be paying for an asset bought on instalments (you should be comfortable tightening your belt to pay back money you’ve borrowed in the past). If you’re not , you’ll just keep borrowing more and will never be out of debt.

A guy that makes 1000 PKR and saves 50 after running a rickshaw all day is richer than a guy that makes 1 Mill PKR and spends 2 million, and owes 3 million in debt already. Money doesn’t disappear into thin air, neither does it grow on trees. if you take money, you will have to pay it back, sooner or later. If you don’t, you’ll lose something equivalent. The financial institutions/people around you with money are not stupid, and they did not get rich by giving out money to random people and never asking back for it :)

7. Numbers -  the only absolute truth in our world is numbers. If you’re not good with numbers – join a math class somewhere. Don’t start a business (unless you want people to fleece you everyday). Musicians/celebrities are never good with numbers. which is why they are always under debt. which is why MJ lost everything, even after death. Not even one of his songs (or even one of his jackets) is his own property, every hair on his head was property of record labels. despite grossing more money than Berkshire Hathaway makes in an year, he never made it to even the fortune top 100 all his life. MJ as an individual= financial wreck.

8.Words -  Communication is needed, esp. written. verbal doesn’t count as much as written, but you need to be a man/woman of your word. Unless you can put things in writing (and abide by them), you can’t run a business. You also should be able to explain things to people, make them see reason in your words (not artificially, actually). Go by logic, not assertions. Sweet talk is a positive, provided its used in a positive context. People like being praised. But they are not stupid, they can see through empty words. They just don’t show it until they find an alternative.

9. Legal/rules/reg

Know how to start a business in a legal/morally accurate way.  Dont screw over your employers in the process. If you do, your employees will do the same later :) . Know the exact legal implications of your business and do everything legit. All the legit businessmen of the world are still the top 10 richest people, which is a clear indication of the fact that white money has more volume than black. I don’t know about other verticals, but having worked in software for 13 years now, I can tell you that you can make more money as a the CEO of a legit software company, than you can as the President of Pakistan :)

10. Priorities - Perhaps not a business killer, but screwed up priorities can hamper the growth of a business. The reason why everyone is not Steve jobs is that Steve destroyed a marriage and his health making Apple what it is today. Most of us lose impetus when the money starts coming in, and we start focusing on ‘where to spend the money’ rather than taking the business further. We start buying expensive things like property, gadgets, sports cars, doing world travel trips, dating expensive women, booze, parties etc. That’s not what we set out to do. If it is, we could’ve done much better doing it in someone else’s company. Screwing over your own creation just to have a good time is not justified.

Why entrepreneurship

The core reason (which we often lose sight of) why every one feels like doing something on their own is to prove that they can do it BETTER than its being done. Focus on that. If you’re starting a company just to become what you set out to prove wrong (exploitation of workforce wages, wrong processes, favouritism, owners taking massive cuts out of gross etc),  its better not to do it altogether. The world already has its fair share of screwed up companies that are screwing working, capable people like you to make the rich richer. It does not need more firms like that.

I’d like to close this with the mission statement from Engro Corp. – which is ‘To improve the quality of life of people around us’. +- pros and cons, Engro does what it can to make that happen. The world would be a much better place with more companies like that. Our gift of knowledge can be used to help make people’s lives better, esp. people like the kid in the photo (he’s an entrepreneur too, one exploited by the self interest of others). Lets do what we can to get him the quality of life he deserves.

Comments/questions welcome.