Entrepreneurship is an attractive career choice. But many decisions have to be made before launching and managing a new business, no matter its size. Among the questions that need to be answered are:
● Does the individual truly want to be responsible for a business?
● What product or service should be the basis of the business?
● What is the market, and where should it be located?
● Is the potential of the business enough to provide a living wage for its employees and the owner?
● How can a person raise the capital to get started?
● Should an individual work full or part time to start a new business?
Should the person start alone or with partners? Answers to these questions are not empirically right or wrong. Rather, the answers will be based on each entrepreneur's judgment. An entrepreneur gathers as much information and advice as possible before making these and other crucial decisions.
The entrepreneur's challenge is to balance decisiveness with caution – to be a person of action who does not procrastinate before seizing an opportunity – and at the same time, to be ready for an opportunity by having done all the preparatory work possible to reduce the risks of the new endeavor. Preparatory work includes evaluating the market opportunity, developing the product or service, preparing a good business plan, figuring out how much capital is needed, and making arrangements to obtain that capital.
Through careful analysis of entrepreneurs' successes and failures, economists have identified key factors for up-and-coming business owners to consider closely. Taking them into account can reduce risk. In contrast, paying them no attention can precipitate the downfall of a new enterprise.
● Motivation: What is the incentive for starting a business? Is it money alone? True, many entrepreneurs achieve great wealth. However, money is almost always tight in the startup and early phases of a new business. Many entrepreneurs do not even take a salary until they can do so and still leave the firm with a positive cash flow.
● Strategy: What is the strategy for distinguishing the product or service? Is the plan to compete solely on the basis of selling price? Price is important, but most economists agree that it is extremely risky to compete on price alone. Large firms that produce huge quantities have the advantage in lowering costs.
● Realistic Vision: Is there a realistic vision of the enterprise's potential? Insufficient operating funds are the cause of many failed businesses. Entrepreneurs often underestimate start-up costs and overestimate sales revenues in their business plans. Some analysts advise adding 50 percent to final cost estimates and reducing sales projections. Only then can the entrepreneur examine cash flow projections and decide if he or she is ready to launch a new business.
Popular posts from this blog
Twenty percent of small businesses fail within their first year. Entrepreneurship is no walk in the park. In fact, the amount of new businesses that fail exceed the number that succeed. That’s why it’s more important than ever to create a unique product or service that helps you stand out from the rest. However, don’t be discouraged. If you believe in your business, passion will prevail. On average, 75 percent of small-business owners are confident in their company. And why shouldn’t they be? They’ve turned their passion into profit. Yet, keep in mind it’s important not to be overly confident. Instead, take things one step at a time. Typically, 20 percent of small businesses fail in their first year, 50 percent in their fifth year and 70 percent after a decade of being in business. A number of factors play into a business’s closing, such as location, the current market, cash flow and more. The number of reason most small businesses fail is due to cash flow, and California cities such …
It is incorrect to conclude that pursuing Entrepreneurship is better or worse than pursuing a role of a senior corporate executive. Being an entrepreneur is not for everyone. However, not every successful entrepreneur has the skill set to thrive in a corporate environment. Life as an entrepreneur, especially during the early stages of a business, is very challenging. There is an element of uncertainty and risk that one will not face when he/she signs up for a stable job with a large corporate. Further, the perks at the office and the lifestyle are typically not as extravagant. There are various reasons why people choose to pursue the path of entrepreneurship. Solving a problem/Addressing a need - The root of entrepreneurship is often based in solving a particular problem. For many entrepreneurs, ideas are driven by real life problems that they have faced. A prime example for this can be Brian Chesky and Joe Gebbia, founders of Airbnb. The need for a pocket-friendly accommodation other t…
Africa is a growing continent that has great potential and natural resources. Because there are many business opportunities in Africa, most entrepreneurs are now venturing in the continent. They take this opportunity not only to gain money but also to improve the lives of the people in that region. To be a successful entrepreneur in Africa, you have to look beyond the resources the continent offers, the Gold, Diamond, Copper, Oil, Timber and many other resources. The term “millionaire” is taking on a new meaning in Africa. It’s no longer just about the size of your bank account; any shady politician, corrupt bureaucrat, or unscrupulous businessman on the continent can easily claim to be a millionaire. But Africa’s new and emerging generation of millionaires are not just excited about money. They’re also passionate about impact; they want to create value that touches and improves people’s lives. It’s called impact entrepreneurship. It’s the new way of making money and doing good, at the sam…