ASK US HOW | Entrepreneurs
Posted by Michael Derin
Published on October 16, 2013 under NSW Business Chamber Partnership
Studies have shown that most start ups begin because of an idea and a perceived opportunity rather than the plain desire to start a business. But it is one thing to have a great idea that could potentially make a lot of money or serve a social purpose, the difficulty is getting that idea off the ground.
QUALITIES OF A SUCCESSFUL ENTREPRENEUR
Creating wide business networks, focusing on your strengths and always thinking success are valuable characteristics that you should adopt in your quest to learn how to be a successful entrepreneur. Some important aspects of a successful entrepreneur include:
Be a risk taker - Entrepreneurship is all about taking risks and having viable business ideas with the potential to sell profitably when put into practice. People who are self-made millionaires all understand the basics of how to be a successful entrepreneur. Just like them, you should be bold enough to take risks and invest well in your prospective business ideas. Develop the belief that your investment will not fail and have the courage to seek capital from banking and microfinance institutions to fund your potential business plan.
Innovation and hard work - It is quite natural for a particular investment to run out of business even after enjoying long periods of success. If you want to understand how to be a successful entrepreneur, you have to appreciate the dynamics of business. Some ideas are simply outrun by time as newer and more efficient ideas are developed. This dynamism requires that you be innovative, always adding fresh ideas to your business to allow it change effectively with time. Hard work and determination are virtues when it comes to learning how to be a successful entrepreneur. It takes a dedicated heart to devote enough time for your establishment and hard work to ensure that the business is ever afloat, making vast profits.
Be passionate in what you do - As an entrepreneur craving for success, you have to be passionate about what you do. Do not be swayed away easily by ideas against your investments and business ideas. Having a deep passion for what you do will determine the amount of time you devote to your entrepreneurship.
Discipline and a willingness to learn - In learning how to be a successful entrepreneur, discipline is crucial. You have to show a willingness to learn mostly from mentors, people who have already been through your situation and have emerged successful. As much as you should have a belief in yourself, listening to the advice of other entrepreneurs will benefit you and your business.
THE DIFFERENT STAGES OF AN ENTREPRENEURSHIP
There are 3 phases an entrepreneur needs to go through, and each stage is challenging. With commitment and dedication, they can lead to success the success and growth of your idea. The phases include:
- Product development where you are more likely to require funding to get your idea off the ground
- Commercialization where you start to generate earnings. This is when it’s important to have the right people around you and when you will start marketing
- Business growth where you become sustainable and generate positive cash flow.
HOW CAN AN ENTREPRENEUR GO ABOUT FUND RAISING
Fund raising can be a challenging and daunting prospect, and to secure adequate funding you will need to show that your idea is viable. You should also have a prepared business plan and a financial model to outline what your idea is potentially worth and the anticipated rate for return. Some options for fundraising include:
Savings - If you already have savings, or money put aside somewhere, this is the advisable method of funding your entrepreneurial startup. This is because money that you work hard to put into a savings fund is not subject to any strings and conditions, except those you choose to impose on yourself to help you focus and streamline your personal funding.
Angel Investors - Angel investors are usually individuals who invest in businesses for a lot of reasons. Mostly they are looking for healthy returns from the business while helping the new entrepreneurs get their business out of the ground at the same time. There is no definite amount that an entrepreneur can expect to receive from an angel investor as it depends a lot on the individual.
Venture Capitalist - This could either be an individual or a firm that provides what is known as venture capital. Venture capital is money which is used to fund a new business. This money is provided by an outside investor (much like an angel investor) and could also be used for troubled businesses. The money is usually provided in exchange for an equity stake in the business so it is not a loan.
Microfinance - More entrepreneurs are turning to microfinance as a means of funding their business startups. Although there are banks that offer microfinance, you are more likely to get funding for your business from a financial institution that focuses on microfinance. There are also a number of nonprofit microfinance institutions that specialize in lending to entrepreneurs.
Government Grant - The government has a lot of grant schemes for small and medium businesses and as an entrepreneur you might be able to benefit from these programs. However, most government grants are restricted to a particular sector.
Crowdsourcing - This has become a lot more prominent in recent times because of the many Dot com businesses that have benefited from crowd-sourced funding. There are several websites which focus on helping entrepreneurs to raise funds.
ADVICE FOR ENTREPRENEURS TO KEEP IN MIND
- Focus on achieving controlled growth and managing costs.
- Make sure to do so research beforehand. It is important to identify the market for your offering and to assess the risks and the benefits
- Be realistic. It takes most businesses five years to gain any real momentum and become an established business so you need to be prepared to put in the hard yards before gaining any real return.
- Surround yourself with advisors who can help you realise your goals and that have the expertise that you don’t so that you have a complimentary role in developing the business.
- If the ingredients are right, go for it! Starting and owning your own business can be an extremely exhilarating experience.