Startup Businesses - January 14, 2012
When an entrepreneur is struck by inspiration for a new business idea, there are many factors to take into consideration before the dream can become a reality. Not only does an entrepreneur need a brilliant concept to transform a given industry, but he or she must also have the determination and skills to translate the idea into a tangible business model. Without certain resources, qualities and opportunities, an entrepreneur may struggle to get a business plan off the ground. Many fantastic business ideas have never seen the light of day simply because the entrepreneur did not prepare properly, or take the necessary steps to build a strong foundation for the plan. A business venture will only be successful immediately and over the long term if business owners have the ambition, gumption and leverage to make an impact in the market.
While it may sound cynical to focus only on the money, entrepreneurs must develop a way to sustain long-term cash flow with a new concept to make it a fully evolved business strategy. There are many individuals who believe they have the next big idea in every industry, a new concept that will change consumers' lives forever. Not all of these entrepreneurs have business savvy, sources of capital or necessary contacts to lift the idea from imagination to reality. A business idea will be a sustainable model if it will engage customers immediately to build a strong consumer base, as well as produce returns several years down the road with opportunities for growth. As important as it is for entrepreneurs to brainstorm for the most creative concept in a given industry, it is also vital these ideas come with a strategy to help the business make money over time.
To be a successful entrepreneur, individuals must have skills in both categories: creativity and business. When developing new ideas, formulating marketing strategies and driving consumer responses, creativity is key. A ground-breaking concept that will transform an industry will only be presented to its target audience if the entrepreneur behind the idea knows how to raise money and maintain cash flow. Business skills such as pitching a business plan to potential investors or monitoring revenue cycle management are key characteristics entrepreneurs should demonstrate to support creative inspirations and help sustain innovation in the long term. The difference between a business idea and a business model is the entrepreneur's ability to make money, so both skill sets are important for sustainable success.
Entrepreneurs must be able to start a business venture from the ground floor, working their way up through the necessary stages to ensure profitable gains at the top. Because not all entrepreneurs have access to a small business loan, trust fund or significant savings to help support a new concept, it is important they have determination and strong tolerance for risk. Depending on the financial backing of venture capitalists, investors and lenders place significant pressure on entrepreneurs who are just starting to formulate a business idea. Many will have to bypass collecting a paycheck themselves for a while until the concept starts to grow wings and take off.
Entrepreneurs are the brains behind new business ideas, and therefore take on the most risk when first launching the enterprise. But they can also stand to benefit the most from profitable swings in the market as well, if the business is able to maintain growth. Small business owners must embrace the risk they take on and learn how to manage it effectively to remain productive and not distracted by financial concerns. Entrepreneurs must never lose sight of the monetary health of the business, or what risk level they are at personally, but cannot let potential losses derail operations from testing the limits and innovating within an industry.
Failure in a startup should not be seen as a final judgment on the business concept, model or owner. Rather, each setback should be embraced as a learning opportunity to guide future decisions and ensure profits down the road. Most entrepreneurs do not generate high returns on their first try, and may take many stabs at a single business venture before turning a profit. Consider each new idea as a growing process that includes great steps forward, but that still requires backward motion to determine the best strategy for business success. Risk and failure are common side effects of an entrepreneurial spirit and should not be seen as permanent roadblocks. When a business idea fails to meet certain goals, adjustments should be made and the company should try again. Entrepreneurs must lead the way in a small business to encourage perseverance and determination. Do not accept failure as a final determination on a concept's value or earning potential. Rather, learn from mis takes to increase growth opportunities in the future.
Another aspect of growing a business from the ground up that is key for most entrepreneurs is allowing themselves to be intimidated by the project, market or competitors. There are very few entrepreneurs who must seek out financial backing, research and develop ideas from scratch, and slowly build a presence in a market and who will still be comfortable with all aspects of the business. Many entrepreneurs are strong in certain areas of the enterprise operations such as creative, financing, marketing or development. Because a successful company requires all components to be functioning at optimal levels for growth to take place, entrepreneurs must take on and master new skills and qualities to make an idea successful.
Competitors in the field will provide ample amounts of intimidation for most entrepreneurs. Because a small business starts with a strong idea, with little infrastructure or market share to build a reputation upon, well-established competitors represent the end product entrepreneurs are striving for. Comparing a burgeoning business to operations of a competitor can make many entrepreneurs feel as if they will never reach the level of growth and development of other companies in the industry. Entrepreneurs must realize their current limitations while pushing the envelope toward expansion, always keeping one eye on the prize.
Competitors may be intimidating and discourage small-business owners from feeling confident in a new market, but entrepreneurs must remember most companies started on a very small scale. With time, dedication, hard work and business savvy, any company can evolve over time and grow into dominant forces in a field. Business owners should look at competitors as a challenge to overcome, and should also see how they represent a milestone to achieve in terms of market share and cash flow.
The more confidence an entrepreneur has in his or her business idea, the greater opportunities there will be for profits and sustained growth. Entrepreneurs should understand any business venture is a learning process that will evolve over time and may not prove to be profitable right out of the gate. Determination and resourcefulness will help any entrepreneur turn an idea into a money-making strategy.