By Debra Shigley, published on November 1, 2010 - last reviewed on June 9, 2016
After leaving her lucrative job as a real-estate agent and soul-searching for a full three months, Amber Schaub launched her dream business: designing baby clothes. When the first 40 boxes of her creations arrived, however, she found herself in a nightmare scenario. Schaub was surrounded by tens of thousands of ruffled baby bloomers—few of which were fit for sale. The leg openings were too small for a baby's legs. The ruffles were in the wrong position. Pieces sized for a 4-year-old would barely fit a toddler. For several weeks, Schaub sorted through the items for up to 10 hours a day, in hopes of recouping some of the $50,000 in life savings she had sunk into the project.
"I'm a pretty positive person, but as I picked through the clothes, I crashed," Schaub says. "I was lying awake all night, thinking about the money we'd potentially lost, and worrying about letting my husband down." Schaub even began seeing a psychotherapist. From a business perspective, she knew what needed to be done, but she didn't know how to handle her fragile mental state. "I didn't want to tell my family and friends about my feelings because they couldn't really relate—and I didn't want to admit weakness or failure."
Three years later, with annual sales approaching one million dollars, Schaub's Ruffle Butts designs are on their way to being a bona fide success story—the kind that ironically used to annoy her when she read them in typical "Follow your dreams!" articles. "Those stories inspire people to go for it, but at the same time, I think they set a lot of people up for disaster. There's the perception that running a business is glamorous from the beginning—but it's not." A bundle of savings and a golden idea are minimum requirements, yet people who keep ventures afloat rely on key personality traits and coping strategies, too.
Researchers agree that gilded tales present a skewed picture of what it takes to make it as a business owner. Part of the problem is hindsight bias, says Kelly Shaver, Ph.D., a professor at The College of Charleston who studies the psychology of entrepreneurship. Once a company has been around for a few years and gotten off the ground, its owner often selectively recalls how things were when he or she began. Memories suddenly get rosier.
Whether fed by glossy narratives or not, many would-be entrepreneurs have romanticized visions of a cozy pottery shop or bucolic bed-and-breakfast. That's why it's important to move quickly from the conceptual to the practical, says Pamela Slim, a career coach and author of Escape from Cubicle Nation, by testing your specific business ideas with real customers and setting concrete goals.
Slim finds that successful entrepreneurs are extremely self-aware about their strengths and weaknesses, and seek out those with complementary skills and traits to help them.
Career-changers might face an abrupt identity shift, with accompanying hits to the ego. Ben Lerer, cofounder of men's nightlife Web site thrillist.com, found it humbling to talk up his fledgling venture to skeptical family and friends. "As far as they were concerned, I was unemployed and lived with my parents!" he says. "There's a bit of just smiling and 'faking it'—propping yourself up to deal with those judgments."
Experts debate whether there is a personality type most suited to entrepreneurship, but they do agree that certain qualities help, says workplace psychologist Judith Sills. Those include a strong sense of autonomy and self-regulation, optimism, resilience, and a high tolerance for risk. Some of these traits are primarily innate, but others can be cultivated over time. "For example, you can become more emotionally resilient by experiencing failure," Sills says.
Someone engaged in outside activities can better manage ups and downs. A dream-chaser who coaches a kids' soccer team or volunteers at the local community center isn't wholly defined by her shop's profits.
Chris Brunsicki started his business—a vacation brokerage company—with his eyes fairly wide open. Before setting it up, the married father of two—and former Army officer and Goldman Sachs banker—had a series of deliberate discussions with his wife. "We created a budget and actually tested it for a couple months to see if we could stick to it," he says. His wife, whose parents have run a furniture business for 35 years, understands the tensions that inevitably creep into mom-and-pop operations, and has been a good sport. (She even uses homemade laundry detergent to cut costs.) Still, Brunsicki's late-night work sessions have taken their toll, leaving the whole family wishing for a dream perhaps even more elusive than entrepreneurial success: a long vacation.
Make sure you have these noncash assets in place before starting a business: