Every Sunday, The Simple Dollar reviews a personal finance or other book of interest. Also available is a complete list of the hundreds of book reviews that have appeared on The Simple Dollar over the years.
One of the biggest reasons that people fail in their entrepreneurial ambitions is that they simply didn’t lay the groundwork for their business venture. They didn’t ask themselves hard questions about what they were ready for, what their best skills were, what skills needed boosting from others, and what they needed to actually accomplish to make things happen. Often, entrepreneurs believe that they’re Superman. They’re not.
The premise of The Entrepreneur Equation by Carol Roth, then, is to guide you through that very process. Instead of asking “Are you really ready for entrepreneurship?” as almost an affront to someone’s skill, Roth is asking it in the sense of saying “Have you laid the groundwork to maximize your skills, cover the things you’re not strong at, and maximize your chances to actually make this work?”
It’s a powerful question and one that potentially separates Roth’s book from many other entrepreneurial books out there.
The Issue – The Assumptions, Myths, and Realities of Entrepreneurship
Many people associate entrepreneurship with some sort of fulfillment of the American dream. Everyone’s supposed to be a big success in business, right? The truth is that most businesses fail and the only people that see entrepreneurial success are either extremely lucky or have been hardened by repeated failure. The most important thing for a first-time entrepreneur to know is that you have a huge chance of failure and the most valuable thing you’ll get out of it is what you learn from the failure.
(Now that’s a rah-rah way to open a book!)
Simply put, not everyone is meant to enter into that grindhouse. Some people function best in an environment where they’re given straightforward tasks. Other people simply can’t handle the stress involved. Still others have a skill set that’s best designed for technical and specialty work.
Assessing Your Fit with Entrepreneurship
Is entrepreneurship the right situation for you? The book is divided into two major sections (with two smaller ones bookending it), the first of which addresses whether or not you have the mindset that works for entrepreneurial endeavors – and if so, whether it works best in a partnership and so on.
Much of the writing here comes in the form of imploring you to evaluate yourself and offering up a lot of ideas on how to really figure out whether entrepreneurship is right for you. Mostly, Roth seems to be trying to persuade you that it’s not right for you, which, again, is an interesting tack to take. The big difference seems to be that a true entrepreneur is willing to take on these problems and flaws and seek ways to correct them, either through partnership or self-improvement.
Assessing the Business’s Fit with You
The flip side of that coin is the question of whether or not the business idea you have really fits with you. Much of this section really comes down to a complete re-write of your business plan, because that is what it amounts to. Roth pushes you to look for every possible flaw in your plan (particularly ones that match up with flaws in your entrepreneurial style), then seeks out ways to correct those flaws.
My feeling, after reading this section, is that it should lead to a serious re-write of almost any entrepreneur’s business plan, particularly that of a first-timer. If a business doesn’t fit with your skill set or your style, it’s not going to work and it has an extreme likelihood of failure, so the key is to take what you know of yourself and make sure that the business you want to start matches it.
Assembling Your Entrepreneur Equation
Roth’s term “entrepreneur equation” mostly refers to your entrepreneurial elements and the things you’re going to need (mentors, partners, etc.) to make this business idea succeed. Assembling those elements and getting them in place as early as possible will pave your road to the level of success that you want to achieve.
Is The Entrepreneur Equation Worth Reading?
If you’ve ever considered starting your own business in even a halfway serious manner, Roth’s book will be a worthwhile read for you. For most of it, it will make you feel as though you’re completely not ready for this leap, but at the same time, it’ll also point you in the direction of what you need to do to be ready for the leap.
If you read it and actually follow through with the ideas within, you’ll find yourself in a much better place to succeed with your entrepreneurial plans.
Because of that, I would almost always encourage people to read this as one of their very first reads on entrepreneurship. Rather than jumping into a “rah rah everyone can do this” book on entrepreneurship, this one gets you ready so that when you read the cheerleading-type books, you’ll know there’s actually something behind the cheerleading.
I loved this book because it felt genuinely challenging, as if Roth wasn’t there to just cheerlead you and tell you everything was going to be okay. We all need that dose of reality sometimes.