· Assessing the Opportunity
The first fundamental of entrepreneurship is opportunity recognition – understanding what it takes both to recognize an opportunity and to move from recognition toward assessing what is actually a good idea for a business. You need to realize that a viable business opportunity is not just about providing a product or service with better functions or more features than those that are currently available. You must understand the nature of the opportunity in terms of customer needs and market potential. This requires that you find concrete answers to a number of key questions. These are: Who and where are the potential customers? What needs of theirs are you addressing? What problem does your product solve for your customers, or what benefit to them does it provide? Has anyone else tried to fix the problem or address the need before, and if so, why didn’t they succeed? How will I reach my customers? How will I deliver the benefits my customers need or solve the problems they have? Is the market for my product or service large or rapidly growing? Is the size large enough or the growth strong enough to make this an economically viable business idea?
· Assessing the Competition
Understanding the basis for your competitive advantage is important to being successful. A product or service doesn’t necessarily have to be unique, but you have to think of yourself as providing a distinct set of benefits to customers. Even if it’s an advantage that won’t last forever, it has to last long enough to produce significant profits over the cost of your investments. So regarding the customer value proposition, you have to ask, “What benefits am I offering to the customer and what is the price? You also have to ask, “How do I compare on those dimensions to others who are providing similar services or products?” Good competitive analysis requires not just thinking about who your obvious rivals are, but about who else might provide a superior, albeit less traditional, way of satisfying your customers’ needs. It also requires thinking about what makes it difficult for others to copy your value proposition and what enables you to sustain your competitive advantage over a relatively long and rewarding period of time.
· Assessing Capabilities
Another basic ingredient of entrepreneurial success is a good understanding of the characteristics of successful individuals. You not only need cognitive skills that allow you to recognize worthwhile opportunities and take advantage of them, but also key personality traits of passion, commitment, and resilience. Do you have these characteristics? Do you know what it will take to be successful? You need to understand that the risks of new business failure are high; most start-ups do not succeed. You also need to be aware of your motivation – is your goal primarily financial wealth, or are you primarily interested in the personal fulfillment that you will achieve through your entrepreneurial journey?
Knowing the basics of financial and market planning and how to write a good business plan are important. You should consider getting help from people who have proven skills in these areas. You will need to be good at pitching your business plan in order to get funding support, so you need to develop those kinds of skills. If your business involves a new type of product, then you have to have a proof of concept. As soon as possible, you need to demonstrate some credibility in terms of what you have to offer – for example, securing an important customer or set of customers that will demonstrate that you have something valuable. That will allow you to get further financing to continue growing the business.
Finally, a key part of the company’s success will be based on the people factor, on leadership and team building. You need to recognize that a good grasp of organizational behavior issues and methods is at least as important as – if not more important than – a good grasp of financial and marketing issues and tools.
pf
