BUILDING A SUCCESSFUL BUSINESS

Posted By: TimoStevens (2009)

The following are the top four lessons that has made the difference between success and failure in entrepreneurial ventures:

1. Focus, focus, focus, focus, focus.

When launching and growing a venture, tons of opportunities and obstacles arise. Entrepreneurs that succeed are typically the ones that see the forest from the trees. They remain focused on the prize. They consider new opportunities, but also note that pursuing them often takes them away from accomplishing what they set out to do.

2. Hire smart.

Companies succeed based on the people that comprise them. People in a small, growing entrepreneurial company make key decisions and take actions that can significantly impact the success of the venture.

Hire people with care, and they must be intelligent, responsible, possess the enthusiasm to succeed and the ability to work in a fast-paced, rapidly changing entrepreneurial environment.

3. Communicate.

So, you've set company goals and remain focused on achieving them. You've hired great people. And now, to communicate effectively, visions, missions, goals and objective, must be communicated to the great team.

Management must share information, instill company values and vision, discuss each employee's performance with them, and make employees feel that they are the company and that the company is them.

4. Win.

Entrepreneurship, like basketball or football, is a game. There are winners and losers. There are narrow victories and landslides. There are Davids and Goliaths. Competition should be hard work, but it should also be fun. The company should be instilled with competitive spirit and be committed to winning.

Winning may take many forms, such as hitting sales goals or turning a profit by a set date. Regardless of how winning is defined, it should be clearly articulated and everyone in the company should have a competitive, winner spirit instilled within them.

The above four lessons can help entrepreneurial ventures edge out their competition and enjoy the financial and emotional success that such ventures are capable of generating.

Source: Keys to Entrepreneurial Success: How to Build a Successful Business, Growthink

THE KEY ASPECTS OF BOOTSTRAPPING

By: TimoStevens (2009)

i) Learn to do more with less.

ii) Find another way to get access to what you would otherwise buy or lease.

iii) Conduct your bootstrapping activities in an ethical fashion and with integrity.

iv) Control costs.

v) Reduce your personal cost of living

vi) Know when it is really okay to ease up a little on the bootstrapper’s mindset.

vii) Remember that there is always a way to get things done; your resourcefulness, creativity and tenacity are your only limits.

viii) Focus on income-producing or market-expanding expenditures only.

ix) Understand the difference between wants and needs.

x) Buy (or lease) only what you need today – delay it if you can!

Source: Raising Capital, Andrew J. Sherman

SEED MONEY

Excerpted By: TimoStevens (2009)

Seed money is the capital raised by the entrepreneur from family and friends to fund the initial startup of a business.

A seed round, sometimes known as a friends and family round, is a securities offering whereby one or more parties that have some connection to a new enterprise invest the funds necessary to start the business.

Seed money is typically used to pay for such preliminary operations as market research and product development. Investors are often the business founders themselves, using savings, mortgage money, or funds borrowed from family and friends.

They may also be outside angel investors, venture capitalists or accredited investors who are acquainted in some way with the founders. Seed capital is not necessarily a large amount of money. Many people start up new business ventures with $10,000 or less.

Seed money can be distinguished from venture capital in that venture capital investment tends to involve significantly more money, an arm's length transaction, and much greater complexity in the contracts and corporate structure that accompany the investment.

Seed money may come from financial bootstrapping rather than an offering. Other means of raising seed money include purchasing second-hand equipment rather than new or leasing rather than buying; paying sales people or agents on commission rather than having people on the payroll; or otherwise deferring expenses.

Source: www.wikipedia.org

PERSONALITY CHARACTERISTICS OF ENTREPRENEURS

By: TimoStevens (2009)


An entrepreneur is a person who undertakes and operates a new enterprise or venture and assumes some responsibility for the inherent risks.
The following is John G. Burch’s list of the traits typical of entrepreneurs:

• A desire to achieve: The push to conquer problems, and give birth to a successful venture.
• Hard work: It is often suggested that many entrepreneurs are workaholics.
• Desire to work for themselves: Entrepreneurs like to work for themselves rather than working for an organization or any other individual. They may work for someone to gain the knowledge of the product or service that they may want to produce.
• Nurturing quality: Willing to take charge of, and watch over a venture until it can stand alone.
• Acceptance of responsibility: Are morally, legally, and mentally accountable for their ventures. Some entrepreneurs may be driven more by altruism than by self-interest.
• Reward orientation: Desire to achieve, work hard, and take responsibility, but also with a commensurate desire to be rewarded handsomely for their efforts; rewards can be in forms other than money, such as recognition and respect.
• Optimism: Live by the philosophy that this is the best of times, and that anything is possible.
• Orientation to excellence: Often desire to achieve something outstanding that they can be proud of.
• Organization: Are good at bringing together the components (including people) of a venture.
• Profit orientation: Want to make a profit; but the profit serves primarily as a meter to gauge their success and achievement.

Source: www.wikipedia.org

LEARNING FROM STARBUCKS

Excerpted By: TimoStevens (2009)

Starbucks uses a classic branding approach! Starbucks is not a trend, it’s a lifestyle. Although, Starbucks concentrates on creating value and customer service. Its emphasis instead has been more on building a network of alliances that make its products more widely available. For instance, it has established alliances with Barnes & Noble, Costco, Horizon and United Airlines.

Starbucks has also worked on a wide variety of spin-offs. There’s Starbucks ice cream with Dreyer’s Grand; bottled Frapucurio developed with Pepsi; and even a (nightmarish) coffee-laced beer with the Redhook Ace Company.

Starbucks has created an ambience that have been carefully assembled around its brand. It talks of “elevating the coffee experience” and is keen on new-page philosophizing.

Schultz, the espresso evangelist has developed a humanitarian management style, with the employee as the most important component of the brand. ‘The people have created the magic. The people have created the experience,’ – Howard Schultz; Pour your Heart into it. The company’s mermaid logo is now omnipresent.

BOOTSTRAPPING METHODS

Excerpted By: TimoStevens (2009)

Bootstrapping is a collection of methods the entrepreneur uses to minimize the amount of outside debt and equity financing needed to from banks and investors. Although, the use of private credit cards is the most known form of bootstrapping, a wide variety of methods exists.

The following are various methods of bootstrapping:

A. Owner Financing

i. Credit cards
ii. Second mortgages
iii. Personal savings
iv. “Friends, fools and family”

B. Minimization of Accounts Receivable

i. Factoring
ii. Reward fast payment
iii. Terminate relationship with slow paying customers

C. Joint Utilization

i. Share office, supplies, equipment
ii. Share employees

D. Delaying Payment

i. Negotiate terms
ii. Lease equipment
iii. Selling by commission instead of wages

E. Minimizing Inventory

i. Using formal routines to minimize inventory needed
ii. Seeking possible terms from suppliers

F. Subsidy Finance

i. Governmental grants
ii. Research grants

Source: www.wikipedia.org

UNDERSTANDING MARKETING

Excerpted By: TimoStevens

You see a fabulous girl/guy at a party. You approach them and say, "I'm fantastic in bed."

That's Direct Marketing.

You're at a party with a bunch of friends and see a fabulous girl/guy. You have one of your friends approach them, point at you and say, "She's/He's fantastic in bed."

That's Advertising.

You see a fabulous girl/guy at a party. You approach them to get their telephone number. The next day you call and say, "Hi, I'm fantastic in bed."

That's Telemarketing.

You're at a party and see a fabulous girl/guy. You get up, straighten your clothes, walk up and pour them a drink. You open the door, pick up their bag after it drops, offer them a ride, and then say, "By the way, I'm fantastic in bed."

That's Public Relations.

You're at a party and see a fabulous girl/guy. They walk up to you and say, "I hear you're fantastic in bed."

That's Brand Recognition.

EIGHT WAYS TO GET IDEAS FROM CUSTOMERS

Excerpted By: TimoStevens (2009)

“It will be up to the 21st century marketer to gather customer insights to help develop new products and services for achieving growth objectives.” And here the eights ways marketers can observe, digest and harness powerful ideas from customers:

1. Observe how your customers are using your product
2. Ask your consumers about their problems with your products
3. Ask your customers about their dream products
4. Use a customer advisory board to comment on your company’s ideas
5. Use websites for new ideas
6. Form a brand community of enthusiasts who discuss your product
7. Encourage or challenge your customers to change or improve your product
8. Let the users manufacture all the content

Excerpted From: The 21st Century Marketing, Mr. Philip Kotler

ANATOMY OF A SUCCESSFUL BUSINESS

Excerpted By: TimoStevens (2009)

Certain elements are necessary for a business to be viable. In order to attract investors, the entrepreneur must be able to demonstrate either that all of the elements are in place or that you have a plan to put them in place.

So what are the elements necessary for a business to succeed?

THE FRAMEWORK

1. Leadership

Provides the business with vision and decisiveness. It keeps the business focused on, and moving in the direction of the corporate mission.

2. Mission

Often spiritual in nature, defines the purpose, focus and direction of the business. Although, not always easily seen and can be intangible. Yet, entrepreneurs who are “on a mission” are driven to make their business a success.

3. Team

This provides the business with the different types of special expertise and skills necessary to operate in today’s complex marketplace. The team includes not only the principals and the employees, but also outside advisers.

The necessary expertise goes beyond the legal and accounting expertise, to incorporate skills necessary for day-to-day operations and management. Such as, manufacturing, marketing, human resources, customer services and warehousing, etc.

THE ELEMENTS

Product or Service

The business must have some type or product or service. The product or service should be consistent with the business mission. Nonetheless, it’s commonplace for the mission to be based upon the product or service. For instance, someone will have an idea for a product or service and then build a business around it.

Cash Flow

This is the foundation upon which the business is built. As such, the business must have a sufficient cash in order to meet operating expenses and to execute its business plan.

Cash flow includes, not only income generated by the business but also the money available to the business both on the company’s books (financial capital) and through immediate credit lines.

The timing of when cash comes in and when it’s needed to go back out can determine the success or failure of a business.

Communications

Represents the interfaces and interaction between the leadership and the team and between the business and the outside world – involving things like reputation and goodwill, public relations, marketing and sales.

The best product in the marketplace is worthless if no one knows about it or if your reputation for service is so bad that potential customers are reluctant to do business with you.

Systems

This element represents the underlying processes or standard procedures that define the way the business functions (i.e. the way it does business).
Typical business systems/procedures involve areas such as customer service, order taking, order processing, delivery and fulfillment, quality control, accounts payable, inventory control, marketing etc.

Legal

A business lacking a good legal foundation is at risk! The product or service provides no competitive advantage if your competitors can simply copy it.

Thus, it’s advisable when choosing the appropriate form of business entity, to observe the legal formalities associated with the particular form chosen; ensuring ownership of, and exclusive rights to, intellectual property assets and protecting those rights; negotiating and documenting agreements defining the relationship between the participants in the business and other entities.

Source: Other People’s Money, Michael A. Lechter (Esq.)

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Entrepreneurlogy, aims to educate, enlighten and empower people with the knowledge of business startup, development and enterprise. 


The wisdom shared here, enables the individual to successfully become his or her own boss.


The subjects professed here, centres around;


i. Finance
ii. Franchising
iii. Human Resource
iv. Management
v. Marketing
vi. Small Business
vii. Business Startup
viii. Personality Profiles


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