Before you give it all up to follow your dream of becoming an entrepreneur, take off those rose-tinted glasses to see if you’re ready for it…
While there are lots of good business ideas out there, the real trick lies in being able to turn one of these into a viable enterprise. This requires a myriad of skills and, while many can be learned along the way, there are a few prerequisites.
The starting point
Would you buy yoghurt shampoo? How about deodorant tablets? Believe it or not, these products were not only conceived, but also trotted out to market and are now proudly displayed at an American museum for bizarre, failed products. So, regardless of your business savvy, the starting point for success is to establish if you have an idea that will work. Read more about evaluating the feasibility of your idea on p.14. Successful entrepreneurs aren’t afraid of researching the idea extensively and will even conduct trial runs. If the response is negative, it’s important to be able to detach and go back to the drawing board, rather than continuing with a concept that doesn’t excite consumers.
So what does it take?
While your concept will no doubt require specialist knowledge, a range of skills – both business and personal – are needed across most industries. Now is the time to appraise your knowledge, as well as your experience and ability. Assess what skills will be crucial for your business, what functions can be outsourced and if you will need to bring in consultants or other professionals to help.
As a business owner you’ll be responsible for everything from IT, finance and marketing to collecting the post every day and other administrative tasks. While you could outsource some of these activities, you can also consider picking up some of the necessary skills yourself and save money at the same time. Important functions that you will need to cover include:
1. Sales and marketing
You will need the skills and experience to identify your target market and know how to speak to them. A good marketer knows how to build a brand and establish its presence in the mind of the customer. A marketing plan is a great place to start and should at least cover the “4 P’s” of basic marketing: Product, price, place (distribution channels) and promotion. (For tips on developing a marketing strategy turn to p.78.)
2. Finance
You’ll need to prepare a business plan that you can use when approaching finance houses and venture capitalists. Thereafter, daily financial tasks will include:
- Budgeting and forecasting – keeping a tight rein on spending and realistically estimating income.
- Bookkeeping – basic accounts, wages, VAT returns etc. You can invest in bookkeeping software packages that will make these processes simpler.
- Managing debt and credit – maintaining cash flow; making sure you get paid on time and can in turn pay your bills on time.
- Stock control – keeping a tab on your stock and its value, which can fluctuate and have an impact on your profit.
3. People management
You’ll want to attract the right people for the job and then keep them motivated. This takes skill. Legal compliance, pensions and payroll issues are all part of the deal when you start hiring. Find out what you need to know on this front.
4. Legal issues
At some point you’ll need the services of a lawyer, especially for more complex issues like patents and copyrights. However, there are also websites and other resources that will assist you with things like employment contracts, partnership agreements etc.
5. Administration/technology
Where will you work from? Are you covered in the event of a disaster? Can you purchase, set up and network all your computer equipment?
The entrepreneur test
Now work on a “personal inventory” by listing all the skills, education and experience you’ve acquired over the years, and everything you feel you can contribute – no skimping on the personal praise. Focus on important areas such as your decision-making abilities. If your normal response is to hand problem-solving over to someone else, then you’ll probably find it difficult to make all the decisions in your own venture. Write down two situations where you solved a problem and the decision you made worked well, and then two where the decisions you made did not work so well. What did you learn from these situations?
Consider what motivates you and how much belief you have in yourself. Two important factors on the road to success are: the ability to be flexible and the ability to trust yourself.
Research has shown that successful entrepreneurs have the following characteristics (though this is not an exhaustive list):
- A strong desire to be your own boss. It is important that you can set your own goals and achieve them.
- The ability to learn from mistakes and not to let them get you down.
- Self motivation and confidence.
- Lots of energy and good health. Successful entrepreneurs must work long hours for extended periods and recover quickly when they get ill.
- A willingness to risk money and security.
- The ability to inspire and energise others.
- Problem-solving skills.
- The ability to be hard working in an environment with little or no feedback.
Published in Your Business Magazine
Related Content
