Basics of entrepreneurship

Editor's Notes

• #8: MUST HAVE A SOUND GODLY VISION An idea from God that makes the unseen visible and the unknown possible It was the vision of light that possessed Thomas Edison to invent the light bulb It was the vision of giving every person access to people friendly software that inspired Bill gates to develop and invent the Microsoft global empire God created each person with a unique vision. He has tremendous plans for you that no one else can accomplish.
• #12: A Sound Business Concept: The single most common mistake made by entrepreneurs is not picking the right business to begin with. The best way to learn about your prospective business is to work for someone else in that business before beginning your own. There can be a huge gap between your concept of a fine business and reality.
• #13: The path to self-employment, owning and managing your own business, can come about quite fortuitously or it can happen by design. For example, a new mother builds a makeshift baby-carrier that frees her hands, keeps baby comfortable, and converts to a seat for grocery carts. When she goes out with it, she is asked so many times where she bought it that she decides she should go into the business of producing them. This mother has hit upon a market opportunity quite accidentally; for many entrepreneurs like her, their ideas came about as a result of hobbies or an out of the blue inspiration. But these revelations are few and far between and they require a lot of patience; waiting and hoping an idea will surface. So, for the rest of us, we need to force the issue and figure out where and how to look for business opportunities. The most common source of new venture opportunity arises from past work experience. Studies have shown that about 45% of venture ideas are formed while working in the same industry. Some good questions to ask yourself when searching for business opportunities are: Could I do my current job on my own instead of as an employee? How could this product or service be made better? A customer has asked about a certain product or service extension, is this something I can provide? Is there a business opportunity that my company has rejected that I could pursue independently? When searching for an entrepreneurial venture it is important to recognize that the discovery is not a result of random actions, it is a structured process that is based on solid observations about how to do something better or different. New product or service: This is the type of new venture strategy that most people think of first, but it also involves the most innovation, creativity and time. Parallel Competition: Do what others are doing; only, do it better. Buy a Franchise: No ingenuity required, but it is important to thoroughly research the franchiser, purchase price, and obligations including royalties. Geographic Transfer: Look for successful businesses in other cities or countries and bring the product or service to your own region before the original company expands. Exploit a Supply Shortage: Is there something that is hard for you, your customers, your friends, etc to get? If so, figure out how to supply it profitably. Buy a Business: This strategy requires systematic searching for the right opportunity: confirm that there is adequate cash flow and that the price reflects the cost of asset acquisition and a reasonable premium for profitability and goodwill. Regardless of the method used to uncover an exciting new venture opportunity, the real work has just begun. You now have the task of evaluating your idea and yourself to make sure that the prerequisites for success are there. With a good idea and good leadership, your entrepreneurial dream can come true. Start the process now, and begin observing the many ways you can serve the market directly
• #17: Understanding Of Your Market: A good way to test your understanding is to test market your product or service before your start. You think you have a great kite that will capture the imagination of kite fliers throughout the world? Then hand-make some of them and try selling them first.
• #18: A market in its entirety is too broad in scope for any but the largest companies to tackle successfully. The best strategy for a smaller business is to divide demand into manageable market niches. Small operations can then offer specialized goods and services attractive to a specific group of prospective buyers. There are undoubtedly some particular products or services you are especially suited to provide. Study the market carefully and you will find opportunities. As an example, surgical instruments used to be sold in bulk to both small medical practices and large hospitals. One firm realized that the smaller practices could not afford to sterilize instruments after each use like hospitals did, but instead simply disposed of them. The firm's sales representatives talked to surgeons and hospital workers to learn what would be more suitable for them. Based on this information, the company developed disposable instruments which could be sold in larger quantities at a lower cost. Another firm capitalized on the fact that hospital operating rooms must carefully count the instruments used before and after surgery. This firm met that particular need by packaging their instruments in pre-counted, customized sets for different forms of surgery. While researching your own company's niche, consider the results of your market survey and the areas in which your competitors are already firmly situated. Put this information into a table or a graph to illustrate where an opening might exist for your product or service. Try to find the right configuration of products, services, quality, and price that will ensure the least direct competition. Unfortunately, there is no universally effective way to make these comparisons. Not only will the desired attributes vary from industry to industry, but there is also an imaginative element that cannot be formalized. For example, only someone who had already thought of developing pre-packaged surgical instruments could use a survey to determine whether or not a market actually existed for them. A well-designed database can help you sort through your market information and reveal particular segments you might not see otherwise. For example, do customers in a certain geographic area tend to purchase products that combine high quality and high price more frequently? Do your small business clients take advantage of your customer service more often than larger ones? If so, consider focusing on being a local provider of high quality goods and services, or a service-oriented company that pays extra attention to small businesses. If you do target a new niche market, make sure that this niche does not conflict with your overall business plan. For example, a small bakery that makes cookies by hand cannot go after a market for inexpensive, mass-produced cookies, regardless of the demand.
• #19: Every business has a specific marketing strategy that usually works best and has already been proven by your most successful competitors. You can benefit from their experience by copying successful marketing plans, including selling methods, pricing and advertising. Make a list of the most successful businesses that fall within your field of interest and study them (and even go to work for them). Visit these businesses and be prepared to ask the questions that are most important to you. Learn as much as you can about the needs of your customers and how to gain feedback from them. For example, if you open a restaurant, a displeased patron will probably not complain because it is not a pleasant experience. Instead, he will not return. So, for example, you must take care to inspect the plates as they are returned to the kitchen. Will your customers be looking for convenience, pricing, quality and/or service? It will be difficult to make sound marketing and promotional decisions without being informed on their real wants and needs. If a specific geographical area defines your market, low cost demographic reports based on the census can be obtained that will furnish information on population by race, income and home ownership
• #20: . Most employers agree: the toughest part of being an employer is finding and keeping good employees. Begin your search for the good employee as soon as you decide that you are going to be an entrepreneur. Define what you need from an employee. List the characteristics you require. Network: get the word out that you are looking for help. Develop and maintain sources for building your workforce. Consider family members, retired workers and students. Your customers need to feel confident that they are dealing with people who are knowledgeable and helpful. Five characteristics customers like most when dealing with a sales or service person are: Product or service knowledge Presentable appearance Courtesy Honesty Sincerity To achieve these qualities, look for marketing employees who: Like what they do Are quick learners who have curiosity to expand their knowledge Project a pleasant and positive image Like people and relate well to them Are helpful to customers as well as to fellow associates Are ambitious and hope someday to have your job
• #22: NETWORKING Surround yourself with successful people Mingle with the rich and successful to make valuable contacts and to find out exactly how they got there and utilise their expertise to your advantage Be cost conscious and cut down on luxurious expenses Invest in more than one business Don’t put all your eggs in one basket Whilst your focus on running your own business also make investments in blue chip companies, funds that are solid and respected. Make savings a habit always put aside at least 10% of your salary into fund or stock SET PRICES FOR SUCCESS Your product or service must be priced to entice buyers and cover your overhead, production, distribution labour and marketing costs and most importantly make a profit Look at the shop rite concept – revolution in supermarket business and our prices – high volume
• #24: PRACTICE OPEN COMMUNICATION Communicate, communicate, and communicate. When you think you’ve communicated enough, do it again. Use several different channels to inform the people in your company. Company newsletter, town meetings, bulletin boards and plain old chat sessions are just a few. Do more listening than talking. Your employees have their fingers on the pulse of activity in your company. Help them help you.
• #30: Basic rules for Handling Serious Business Problems Identify and acknowledge your problems with brutal honesty. Immediately reduce your losses by unemotionally cutting your costs to maintain a positive cash flow and profitability. This is the first and most important action to take. Don't switch horses. Stay with the business you know unless its future is fatally defective. Take the initiative to explain to your creditors what your problems are and why slow or smaller payments will be necessary. Never write post-dated checks or send late payments without an explanation. Don't cut value or quality of your products or services. Make them even better. Improve every aspect you can of your performance and image. Look for opportunity in adversity. Sometimes there will be bargain opportunities during business slumps. Remember that businesses have cycles. So, hang in there and ride out the adverse periods. Suggested Activities Review case histories of the most successful businesses in your field. Review the case histories of failed businesses to determine their mistakes. Was it inadequate testing, planning and experience? Identify a typical business problem in your intended business and plan a solution. Identify a combination of problems in your business and plan a solution.