A certain level of optimism goes hand-in-hand with starting a new business. Such an endeavor requires significant dedication and planning, and a willingness to take a financial risk.
Small Business Trends brings us a story of optimistic entrepreneurs. A recent survey by the Ewing Marion Kauffman Foundation was conducted in January among 1,375 LegalZoom customers that had started businesses in the past six months.
Among the findings:
- A whopping 91 percent of entrepreneurs are confident that their businesses will be more profitable this year. That’s up 5 percent from the third quarter of 2013.
- Of 18-30 year-olds, 94 percent are confident or very confident in greater profitability. That’s down from its recent high in the third quarter of 2012 (98 percent) but up significantly from its low point at the start of that year (86 percent). For 31-40 year-olds, that confidence mark is at 95 percent, which is a new high for that demographic.
- Despite those cheery numbers, there is more tempered enthusiasm for the state of the economy. Those who believe it will improve (or significantly improve) stand at 47 percent, while 32 percent think it will stay the same, and 18 percent think it will deteriorate. Still, that means 79 percent think it won’t get worse, and that’s up 9 percent from the third quarter of 2013.
- The majority (55 percent) believe consumer demand will increase this year, which is up 13 percent from the third quarter of 2013.
- Hiring hopes are also on the rise, with 43 percent planning to bring on additional employees this year. That’s up 7 percent.
And it’s not the only study to reflect good vibes among small businesses. The Wells Fargo/Gallup Small Business Index, released in February, showed the highest score (+45) since the third quarter of 2008. That number is based on business owners’ expectations in terms of revenue, cash flow, spending, hiring and credit availability. Granted, the number is still below the lofty 100-plus ratings before the recession, but it’s on the rise.
Let’s look at a high-performing optimist. The New York Times recently featured a Q&A with Shafqat Islam, the CEO of content marketing platform NewsCred (which announced a partnership with Sharethrough). He’s been an entrepreneur since his high school days, when he ran a website about pop band Hootie and the Blowfish. You could say he goes a step beyond being just optimistic.
“I always talk about this notion of irrational optimism,” he said. “Certainly as an entrepreneur, but almost in any form of work, I feel like you need to be irrationally optimistic about barriers you can break through, or things you can get accomplished, or projects that you can deliver in a certain amount of time.”
As with any strong way of thinking, especially one that involves the word “irrationally,” there are going to be drawbacks. Islam acknowledges that hiccups can be expected, and that it becomes a balancing act.
“Because that’s my management philosophy, it often leads to taking on way too much — being way too aggressive, too ambitious,” he said. “Sometimes things are impossible. So it’s about learning the right balance between rallying the team and trying to accomplish the impossible versus being realistic and saying, ‘Hey, let’s really, really focus.’ In all honesty, it’s still hard for me.”