The Successful Entrepreneur

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.