What Factors Affect the Entrepreneur's Success?
Entrepreneurship can be a scary proposition because of all of the unknown factors that affect a new business’s chances for success. While many people have theorized on what it takes to be a successful entrepreneur, most explanations include the ability to create a viable product, knowledge of general business skills and ability to raise adequate capital. Assessing your situation will help you determine if you’ve got what it takes to start your own business or what you need to help you succeed.
Many people have ideas for products and services, but even if there’s a demand for an idea, an entrepreneur must be able to make it and sell it profitably. In some instances, consumers might want what you have to sell, but a competitor already offers something similar enough for less than what you could charge for your product or service. In other instances, the customer base that wants your product might not be large enough to pay for its creation, the running of a company and a profit. A written business plan, detailed marketplace analysis, product testing and consumer research will help you determine the likelihood you have a viable -- rather than just “great” -- business idea.
You might be the best chef in your area, but a catering business doesn’t succeed based on its food. To be a successful catering entrepreneur, you’ll have to create a marketing plan that includes developing a brand for your business, finding your target customer, choosing the best advertising and promotion methods in your budget, raising capital, creating budgets, managing employees and the host of other tasks associated with any other business. If you don’t have basic business skills or aren’t interested in learning them, you can still succeed as an entrepreneur if you’re willing to take on a partner or hire experienced businesspeople as employees.
It’s frustrating for many would-be business owners who have a viable idea, written business plan and business skills, but don’t have enough start-up cash to get off the ground. Even profitable companies can go out of business if they can’t manage cash flow. For example, if you book a large order that’s going to turn you a nice profit, you must have the upfront cash or credit to order supplies, pay your employees and take care of your bills until you ship your product and receive payment from the customer. Entrepreneurs often need significant investments to get their businesses off the ground and investors often want a large piece of the pie before they risk their money. Your business plan should include detailed financial projections that include your start-up budget, initial capital needs, first-year operating budget and different sales scenarios to help you project your financial needs.
Entrepreneurs must be risk-takers, willing to lose some or all of their investment. If you’re not willing to take a significant gamble, you might be too cautious to succeed as an entrepreneur. Gambling doesn’t mean taking rash risks -- with a well-researched business plan and help from groups such as SCORE -- formerly the Service Corp of Retired Executives -- you can increase your chances of success. Entrepreneurs must also be prepared to work long hours under considerable pressure. If you have family commitments that won’t allow you to dedicate a significant part of your life to your business, consider a scaled-back or part-time business venture. Selling is a key part of being an entrepreneur. New business owners must also be confident and outgoing, willing to pitch their ideas, ask for money and persuade others.