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I answered a question posed on Yahoo! and decided to add my answer to
this website. Basically, the question concerned what makes a
successful entrepreneur.
Whether your business exists as "bricks and mortar" or in the virtual
world like eBay, the information below applies to you. When you
finish reading my answer, be sure to click on some of the resources
shown on this page for more information and ideas.
As a CPA, manager, and part-time entrepreneur, I know that many
things go into making a successful business. Sometimes dumb luck and
sheer timing of entry are two of your greatest allies -- but you won't
make it if that's all you have.
Here are just a few of the questions that a successful entrepreneur
should ask -- and keep asking:
DO I
HAVE A MAP TO SUCCESS? You need more than dreams --
you need a strategic plan. It doesn't have to be written, and it can be
revised, but it should be firmly entrenched in your mind. The more
"flesh" on the plan the better, but it's up to the individual to decide
how much or how little detail to include based on the specific need. For
instance, a formal business plan will have to be in writing and be much
more specific about objectives, tasks, timeframes, and benchmarks than
say, a more personal, informal plan. On the other hand, there are those
who say creating a business plan allowed them to better understand their
business goals and how to accomplish them.
HOW IS
MY BUSINESS DOING?
Money
management is key to a successful business. Most businesses fail
because they start undercapitalized, they fail to keep debt to a
minimum, or they fail to maintain positive cash flow -- or all of the
above. They start out without fully understanding that it may take
awhile to see even the first dollar in revenue, much less profit. They
pile up debt. They buy without shopping or considering cost-conscious
alternatives.
They keep
insufficient records and thereby have insufficient financial and
operational information to make intelligent, informed decisions.
Eventually, they go out of business -- still shaking their heads and
wondering why their dream didn't work.
WHAT DO
I HAVE THAT OTHERS WILL WANT TO PAY FOR AT A PRICE I CAN PROFIT FROM--
AND WHY? A successful business has to have a viable
target market for a product or service that can be delivered at a
competitive price and produce an acceptable profit. Marketing is also
key. The world won't beat a path to your door unless they know where the
door is and why they should knock.
HOW BIG
IS THE MOAT? The higher the competition's barrier to
entry, the better, but this can also work against the start-up business.
Sometimes the best strategy is to find and exploit low-barrier niches
unknown to or ignored by the competition and then create or benefit from
your own barriers to entry for competitors as you grow. Some of the
largest companies in the world started out just this way.
WHAT
ARE MY BIGGEST ASSETS? Successful entrepreneurs have
to have drive and determination to succeed. They also have to have or
acquire (learn or pay for those with) relevant business skills.
One asset often goes overlooked. Even in a sole-proprietor "one-man
shop," people are one of the most important assets a successful business
has. Successful entrepreneurs know that employees, customers, and
suppliers are each the sum total of their experience, education,
personality, attitude, and other factors, and that one can learn
valuable information and lessons simply by paying attention. Often, just
by listening to those in the trenches the entrepreneur can gain advance
warning to problems that haven't yet bubbled up to the next level -- and
sometimes the greatest innovations can come from listening to the people
on the support and production front-lines talk about the obstacles they
have to overcome in order to do their job.
WHEN IS
A GOOD IDEA NOT A GOOD IDEA? Successful entrepreneurs
should be innovative, responsive, and always aware of opportunities.
They should have the business acumen to discern good opportunities from
the bad, and have the patience to realize that missed opportunities may
come again at a more appropriate time, or may allow other opportunities
to arise.
WHAT
HAS CHANGED -- AND WHAT SHOULD I DO? Last but not
least, a successful entrepreneur should be able to adapt to an often
rapidly changing business environment. Even a good idea may not remain
so forever.
In short, successful entrepreneurs know that a successful business is
not just one thing. It's the sum total of every person associated with
it, coupled with good ideas, good planning, good execution, and
sometimes a little dumb luck.
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