Entrepreneurial success requires more than a good idea for a product or service; it requires a solid plan of execution, adequate resources, the ability to assemble and manage those resources, and perseverance. Before starting a business it is a good idea to take a look at both the benefits and potential drawbacks to entrepreneurship.
Know the Business in Depth
It is essential to have the right type of experience in the business. It's a good idea to get as much education as possible before starting a business. This doesn't have to mean paying ridiculous amounts for higher education. Read everything available about the industry, such as trade journals, business periodicals, books or Web pages. It's also a good idea to get personal contact with suppliers, customers, trade associations and others in the same industry. Learning is ongoing, even after the business is running successfully.
Prepare a Business Plan
It cannot be emphasized enough how crucial a business plan is. Companies without a business plan often stall at the first challenge and have no set direction. A business plan will help an entrepreneur overcome obstacles, grow as a business, make important decisions, receive external funding and numerous other benefits. There are some great software programs out there, such as Business Plan Pro, that can greatly aid in creating a solid business plan.
Manage Financial Resources
Developing a financial information system and using this information to make business decisions is the best defense against financial problems. In order to maintain control over a business an entrepreneur must be able to gauge the company's financial health.
The first step to managing financial resources successfully is to have adequate start-up capital. It almost always costs more to launch a business than any entrepreneur expects. It may be a good idea to establish a relationship early with at least one reliable lender. The most valuable financial resource to any small business is cash, which must be managed carefully. A business must have enough to pay it's bills and financial obligations and then hopefully make a profit.
Understand Financial Statements
The condition of a business is gauged by its records and financial statements. Too often these records and statements are only used for tax purposes, but they should be employed as vital control devices. A business owner must have an understanding of accounting and finance. These financial statements are a reliable indicator of a company's financial health when analyzed and interpreted correctly.
Learn to Manage People Effectively
The people an entrepreneur hires determine the heights to which a company can climb, or the depths to which it could plunge. It's important not only to attract but to retain quality employees. It's important to treat employees with respect, dignity, and compassion and the employee with then usually treat customers in the same fashion.
Set the Business Apart from the Competition
Copying what the competition is doing leads to almost certain business failure. Successful entrepreneurs must convince their customers that they are better than the competition even when selling similar products or services. This is especially important for small companies with larger, more powerful rivals. The basis for differentiating a company from its competitors is founded in what it does best. For small companies, this is usually customer service, convenience, speed, quality, or whatever else is important for attracting and retaining customers.
Maintain a Positive Attitude
Success is dependent on not only maintaining a positive attitude, but also sticking with it. The most valuable resource is time; it must be managed effectively to make a business more productive. None of this is possible without passion. A successful entrepreneur must have a passion for their business, products or services, customers and communities. Passion is what enables a failed business to try again and make it to the top.
Sources
- Stephanie Barlow, "Hang On!" Entrepreneur, September 1992, p.156
- Rhoda Abrams, "Building Blocks of Business: Great Faith, Great Doubt, Great Effort," Business 2.0, March 4, 2001, p.2
- Norman M. Scarborough, Douglas L. Wilson, Thomas W. Zimmerer, Effective Small Business Management. 9th ed. Upper Saddle River, New Jersey: Pearson Prentice Hall, 2009. 31-33. Print.
Maddison Newburg - Hi everyone! Here's just the basics about me- I'm into sports, cars and animals. I'm born and raised in the Tampa Bay Area of Florida. I ...
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