While starting a business is easy, becoming a successful entrepreneur requires more than just willpower. By assembling a team with complementary skill sets; having a well-researched and complete business plan for bringing your unique product or service to market; and establishing solid funding options, entrepreneurs increase their chances of creating sustainable success. See the following article from The Street for more on this.
Starting a business is both one of the easiest and most difficult things a person can do.
The easy part is there are few obstacles creating a business in its simplest form. It requires little more than printing a business card and identifying prospects. You are a sole proprietor and are up and running a “business.” From that point on, however, you’ll begin to discover the hardest part of starting business: the things you don’t know about, such as accounting, marketing, public relations and funding.
When we are employees of other firms, large and small, we typically have a specified role within the organization. We aren’t traditionally exposed to all the elements of the business. Even if we work for a small business, there will be decisions made by the owner, who meets with consultants, e.g., a CPA, tax attorney, investment advisor. Based upon personal and business factors, the business owner will make decisions. As an employee, usually we only see the implementation of a decision and not factors, criteria and input that went into the decision itself.
Starting a business is a daunting process on its own, but what about becoming an entrepreneur? An entrepreneur is more than a business owner. Entrepreneurs are innovators. They look at owning a business as the means to create new products and change the way business is done. They are adaptable, flexible and capable of recognizing opportunities.
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Entrepreneurs are change agents with ideas, innovations, and technology that they want to develop and sell. The founders of Google(GOOG) were entrepreneurs. Michael Dell of Dell(DELL) computers and Steve Jobs of Apple(AAPL) were entrepreneurs. They recognized a need, an opportunity and a direction the marketplace would be going. Then they took us there.
The successful entrepreneur possesses six critical items: a capable team; carefully researched market information; a product (technology or service) that a customer will buy; a plan to make money; a compelling story; and funding.
I’ve heard many successful entrepreneurs discuss their successes. One of the founders of Cree(CREE) described the company’s early days and operating according to the plan they had (which was initially not written). Decisions were made based upon the plan. They knew when and how much money they could spend; what the priorities, tasks, timelines and roles were for the team. They executed that plan, and did it well.
The other element they had was a team with complementary skills sets and expertise. Savvy entrepreneurs know they need the business expertise they may lack themselves (e.g., finance, accounting, human resources, law) for an organization to make the best decisions. Successful entrepreneurs identify where there are gaps in expertise and acquire team members to fill those roles.
A well-written business plan is the toolbox that holds your: market information on competition, customers, and other data that will support the design and development of the product (which can be technology, services, or a physical product); product that will be developed, designed, packaged, produced and priced; story that will facilitate fundraising and product message — why should someone invest in or buy your product; funding needed to accomplish the plan and bring a product to market.
A business plan is especially important to the first-time, inexperienced entrepreneur. It sets organizational benchmarks used to adjust course. The plan provides structure (although entrepreneurs tend to dislike structure) and a means of communicating to potential investors, employees and other stakeholders the vision, the capability and the potential for your business.
A good team writes the business plan, which is the mechanism for ensuring the organization is aligned in its objectives and use of resources. The process of writing a business plan brings the team together to answer the critical questions, set priorities and identify when and how much funding will be needed.
If you develop a compelling story supported by a plan, a team and a product designed for the market, then obtaining funding will be easier. Not every entrepreneur or business will want investors. However, a business that has the option to seek additional funding is a business poised for success. Furthermore, a viable, well-funded business is more attractive to customers.
Success doesn’t happen overnight. It requires a solid business foundation, a good team and a focus on understanding what the market and customer wants.
This article has been republished from The Street. You can also view this article at The Street, an investment news and analysis site.