Your Guide to Becoming a Successful Entrepreneur
Firstly, we need to define what an entrepreneur actually is. People need to understand that there is a difference between a businessman and an entrepreneur. A businessman sets up a business on an existing idea about a certain product or service which he/she deem to be a profitable. An entrepreneur however, brings a new and innovative idea/solution about a product or service in the market. So, an entrepreneur is the one who creates a new business with his/her creativity while facing risk and uncertainty in order to achieve profit. He/she also wants to achieve growth by recognizing the opportunities and availing them by assembling necessary resources.
The term ‘Entrepreneur’ is seen as a very fascinating title by people all around the globe. Entrepreneurship is perceived as a difficult road with new challenges every day which is not untrue, but with hard work and resilience, a lot that was once a dream, can be achieved. Once a person embarks on this journey, the motivation is so intense that he learns to embrace uncertainties and has more willingness to make sacrifices. Regardless of the demanding nature of entrepreneurship, it is still very desirable because of its monetary and emotional rewards.
There are certain ways you can adopt to ensure the success of your entrepreneurial journey:
- Embark on this journey with the right mindset:
Mentally preparing yourself about what’s about to come in an entrepreneurial journey is more important than the business idea itself. The business will demand strenuous amount of hard-work, high level of forbearance and strong will to have tenacity despite setbacks. The pressure of meeting short-term goals, various deadlines and regaining the capital invested puts an unprecedented pressure, even on the most strong-willed people. So, it is imperial to know what to expect and prepare yourself for what’s to come.
The business idea is bound to suffer and even dissolve, if executed with a wrong mindset. The aim should be to make a difference with the product or service; in people lives and world instead of just making money. And with this mindset, money will be generated as a consequence.
- Have a Feasible Business Model:
Your business plan will help you and other stakeholders to visualize the idea as a viable business with an effective business model at the core of it. Business model explains how your idea is capable of generating revenue. Once you have identified the target audience for your product or service who are willing to buy it, the next step is to create a business model. It can be a plan outlay or a diagram depicting the activities with which the business will compete in the market. Your attention should be directed towards these four components for success:
- Core strategy: This entails the basis of differentiation with which your business will compete relative to its competitors. Scope and mission will also be added here.
- Strategic resources: Resources available to implement the strategy are of two types: Core competencies and strategic assets. These two combined will give a competitive advantage to the business.
- Partnership networks: For a new business, good network of key stakeholders like suppliers and partners is pivotal. They can perform key roles with their resources and do tasks you cannot at this stage.
- Customer Interface: Your business interaction with customers hinges on how it wants to compete. The three elements you need to focus in your customer interface are the target market, fulfillment and customer support(way product/service will reach the customers and channels used) and price structure
- Manage your Finances effectively:
Entrepreneurs should always be aware of the business cash flows and how to manage them to make efficient use of profit generated. Few tips I would like to give to the readers are:
- There is a reserve cash portion in the financial statements of many entities. By fixing an amount of let’s say 5% of sales to be set aside, businesses can have backup cash as a protection cushion, if losses are incurred. This practice is crucially important for businesses offering products and services having demand fluctuation in different seasons.
- Keep reinvesting the income generated until the business becomes financially stable. In the start, you can use your retained earnings in a way that gives long-term profit like allocating more money to marketing budget for promotion or buying machinery that will cut per unit costs in the future.
- Do not keep excess inventory and expensive substitutes of things. Not only does your money get stuck but also additional costs are incurred in the form of carrying costs and depreciation.
- Never stop learning and educating yourself:
As an entrepreneur you should always have the willingness to keep learning new things and expanding your knowledge pool. Being up to date with current market trends like inventions, consumer demands will help you stay relevant in a competitive market. You can go for further studies in form of higher degrees, certifications and diplomas. There are also seminars and workshops for learning soft skills. I would recommend reading books of renowned authors, specifically those catering to your weaker areas for instance a lot of people want to learn more about managing finance.
- Build a Dream Team:
To build a successful business, having a competent team is a key factor. You should hire skilled employees who are also compatible with your line of work. It’s imperial that they add value to the business which can be in form of bringing more customers or efficiently streamlining the work at the back-end. Keep in mind that your team members should always be on the same page regardless of their individual expertise. Hiring people who share your vision and leading them in the desired direction while making sure everybody conform to the ethical standards promises long-term prosperity.
- Be very economical while spending:
When starting a new venture, you need to spend every penny wisely. Before making a purchase, you should refer your business plan and model to see if the certain expenditure provides any benefit to the business. Don’t overspend on something you can get for less cost. Remember that buying expensive stuff that does not increase your sales would do more harm than good!
- Minimizing the Risk:
No doubt that risk is an inevitable factor in entrepreneurship but that doesn’t mean it cannot be reduced. Entrepreneurs can manage their risk and in turn maximize their returns. Due to such uncertainty that prevails around us, it is beneficial to purchase relevant and affordable insurances to protect against unfavorable outcomes. The important thing is to have good knowledge and research about various insurances before buying them.