Startup planning refers to all the essential things you need to consider when starting up a new business.
As an entrepreneur, there are so many things you need to consider when starting up a new business. But of all these things, the 5 essential factors you need to focus on during your startup planning that will guarantee a successful launch of your new business are;
- Business Model
Let’s take a closer look at each of them.
Startup Planning: 5 Things You Fundamentally Need to Start A New Business
To build a great company, you definitely need a great team. Successful startups are not created by an individual. They are created by a team.
The first essential element of your startup planning is people. Your startup idea is not going to automatically create itself; you need people to make it happen.
I’m sure this is an obvious factor to you. Where most entrepreneurs miss out is determining what kind of a startup/founding team they need to put together.
A good startup team, according to entrepreneur magazine, should comprise the following people;
- The visionary and dreamer. Typically the core founder with the vision that leads the rest of the team.
- The customer champion. Someone who steps into the user experience role making sure the product is giving buyers exactly what they need and want.
- The innovation architect. This programming-savvy member is supposed to tie together the right technologies to build the product and keep the company on top of industry trends.
- The rainmaker. This is the financial and business wizard assessing the viability and profitability of the company and keeping a close eye on the burn rate.
The product/service you want to offer to your target customers is the second essential element of your startup planning. What are you going to sell?
Your startup is only as good as the problems it is being created to solve in people’s lives. Your product/service is the solution your startup created to the problems in the lives of your target customers.
There are certain criterion this product/service needs to meet to qualify as a viable product/service;
- Uniqueness: the product/service your startup has created must be significantly differently than all the existing options currently in the market. Why? Because no one needs another “me-too” brand. To get the market’s attention, you gotta stand out from the crowd!
- Usefulness: the product/service your startup wants to offer her target customers must be capable of meeting their needs and solving their problems. In other words, it must be useful to the buyers. Why? Because people don’t buy products/services, they buy utility – the solutions in your products/services.
The market you want to serve is the third essential element of your startup planning. Who are your target customers?
A very clear understanding of the people who have the problems your product/service can solve is crucial to your startup success.
If your product/service is great BUT there’s no market for it, you’ve failed.
So to ensure there’s a ready market for your product/service, you need to clarify the following;
Market Size: what’s the total addressable market? That is; what’s the total number of potential buyers/customers/users for your proposed product/service?
Growth rate: how fast or slow is this market growing? Is there an opportunity for expansion?
Demography: these are the average or typical characteristics of your target market. These characteristics might include age, annual income, educational attainment, type of occupation, region of the country they live in, or number of individuals living in their household. Demographics help you understand who buys your product or service.
Psychography: these characteristics go beyond the external to focus on your target customers’ psychology, lifestyles, and behaviors. Psychographics can include such factors as where your target customers like to travel on vacation, the kinds of hobbies and interests they have, the values or opinions they hold, and how they behave. Psychographics helps you understand why they buy.
Your business model is the fourth essential element of your startup planning. A business model describes the rationale of how an organization creates, delivers, and captures value.
The business model is like a blueprint for a strategy to be implemented through organizational structures, processes, and systems. Without one, your startup cannot succeed!
A good business model design according to the greatest book ever written on the subject, ‘business model generation’ should cover the following 9 building blocks which form the four main areas of a business: customers, offer, infrastructure, and financial viability.
1: The Customers:
- For whom are we creating value?
- Who are our most important customers?
2: Value Proposition:
- What value do we deliver to the customer?
- Which one of our customer’s problems are we helping to solve?
- Which customer needs are we satisfying?
- What bundles of products and services are we offering to each Customer Segment?
- Through which Channels do our Customer Segments want to be reached?
- How are we reaching them now?
- How are our Channels integrated?
- Which ones work best?
- Which ones are most cost-efficient?
- How are we integrating them with customer routines?
4: Customer Relationships:
- What type of relationship does each of our Customer Segments expect us to establish and maintain with them?
- Which ones have we established?
- How costly are they?
- How are they integrated with the rest of our business model?
5: Revenue Streams:
- For what value are our customers really willing to pay?
- For what do they currently pay?
- How are they currently paying?
- How would they prefer to pay?
- How much does each Revenue Stream contribute to overall revenues?
6: Key Resources:
- What Key Resources do our Value Propositions require?
- What Key Resources do our Distribution Channels require?
- What Key Resources do our Customer Relationships require?
- What Key Resources do our Revenue Streams require?
7: Key Activities:
- What Key Activities do our Value Propositions require?
- What Key Activities do our Distribution Channels require?
- What Key Activities do our Customer Relationships require?
- What Key Activities do our Revenue Streams require?
8: Key Partnerships:
- Who are our Key Partners? Who are our key suppliers?
- Which Key Resources are we acquiring from partners?
- Which Key Activities do partners perform?
9: Cost Structure:
- What are the most important costs inherent in our business model?
- Which Key Resources are most expensive?
- Which Key Activities are most expensive?
This is the fifth essential element of your startup planning. How much do you need to startup your new business? Do you have this money? If not, where will you get it?
There’s no denying it, every business needs money to run. So the availability of it or lack of it can mean success or failure for your startup.
But before you run off to raise money for your business, here are 9 brutal facts you need to understand about business funding.
And lastly, not every entrepreneur is qualified to raise money for their startup, especially from financial institutions like banks. So to assess yourself before heading out to banks, the following factors must be met;
The 7Cs of Credit
- Do you have experience running a business?
- Have you had this business for more than one year?
- Do you know this industry well?
- Do you have a good team working for you?
- Is the business operating well?
- Cash Flow
- Is your business profitable?
- Do you have a bookkeeping system that will allow you to demonstrate this to the bank?
- Can you produce financial statements from this data?
- Is your cash flow sufficient to make the loan payments?
Do you have sufficient reserves, or other people who could invest in the business, should unexpected problems or hard times arise?
- Do you have collateral (business and/or personal) which you can offer?
- Is the property you own yours, or do you share it with your husband or family?
- Can you show the bank that I am honest, and keep your promises?
- If I’ve had a loan or supplier credit before, did you always pay on time?
- Have you always paid your personal bills on time?
- Can you prove this to the bank?
- Do you have good references?
- Is the industry that you are in a good one?
- Do you have a unique product or service which makes you different from your competitors?
- Is there growing demand for my products? Does a loan make sense for my business?
- Are you committed to working hard so that your business will succeed?
- Do you really want it to grow?
- Have you put your own money into the business?
Starting up a new business requires a lot of planning on your part as an entrepreneur. This post has been able to highlight 5 of the essential elements you need to focus on during the startup planning phase of your new venture.
Under each element, I have highlighted the actionable process you need to take during your startup planning. Doing them is what will guarantee that you launch your new business successfully!
Over to you
Are there other critical factors entrepreneurs need to consider during their startup planning? Feel free to contribute through the comments section below.
What does it really take to achieve entrepreneurial success?
From my experience as a business development consultant and entrepreneurial coach, I have seen two different schools of thought on this issue.
1. It Takes WILL To Succeed As An Entrepreneur
The first school of thought believes that entrepreneurial success is a matter of determination –WILL.
The underlying assumption is this; if you are determined to succeed, you will succeed. This underlying assumption is built around the belief that the sheer doggedness of an entrepreneur largely contributes to their entrepreneurial success.
To this school of thought, success is achieved so long as you don’t give up. Entrepreneurial success follows this pattern; the longer you work, the harder you work and the tighter you hold on to your entrepreneurial dreams, success will be yours eventually.
2. It Takes SKILLS To Succeed As An Entrepreneur
The second school of thought believes that entrepreneurial success is a matter of education –SKILL.
The underlying assumption is this; if you are committed to continuous learning, you will succeed. This underlying assumption is built around the belief that the extent to which an entrepreneur acquires relevant business skills, largely contributes to their entrepreneurial success.
To this school of thought, success is achieved so long as you keep improving your knowledge of business. Entrepreneurial success follows this pattern; the more you learn, the smarter you work and the clearer your entrepreneurial dreams become, then success will come!
Entrepreneurial Success: WILL or SKILL?
From my own story and from personal experiences; both the ‘will’ and the ‘skill’ matter when it comes to succeeding as an entrepreneur.
The will is what got you started on the entrepreneur’s journey in the first place. The will is the passion you carry that you want to translate into reality by building a business that matters. The greatest calamity that can befall any entrepreneur is thinking that passion and determination [will] alone is all you need to make your entrepreneurial dreams a reality.
Beyond passion, beyond determination is education [skill].
Your passion, your determination and motivation needs direction. And that’s where education comes in. No matter how passionate you are about your business, no matter how determined you are about success, nothing will happen until you begin to take informed actions.
And the only source of informed action is education.
Informed action is the difference between entrepreneurs who succeed and those who fail in business. Trying to pursue your entrepreneurial dreams with only passion, determination and motivation –WILL, is what I call; “doing business”–hustlepreneurship.
It’s very counterproductive. Why? Because it is a business powered by energy, rather than strategy. Your energy can only carry you so far, sooner or later; you will run out of energy. Then what happens?
Your energy [will] is limited. There’s only so much you can do alone. That’s why you need strategy, to make sure that your energy is properly dispensed to achieve optimum results. The more you align your energy [will] with strategy , the more entrepreneurial success you will achieve.
EXECUTE your WILL with a SKILL
The will to prepare is the greatest secret to entrepreneurial success. The difference between entrepreneurs who dream and entrepreneurs who achieve their dreams is this; the willingness to prepare.
Your willingness to prepare, to acquire the relevant education, training, or information required to achieve your entrepreneurial dreams; is the secret to entrepreneurial success. Your will [energy] needs to be executed with a skill [strategy].
Without the right skill [strategy] to execute your will [energy], your entrepreneurial success is a gamble. You will keep trying and failing. Eventually, out of frustration or old age, you will give up the hustle.
It’s no use beating around the bush and hoping that your energy will carry you through. That’s the definition of entrepreneurial foolishness. As an entrepreneur, you need to be strategic in ALL that you do regarding your business.
You have to be CLEAR about where you are GOING –vision, goal, or objective.
You have to be DELIBERATE about what you are DOING –execution, action or activities.
You have to be KNOWLEDGABLE about how to DO it –education, information or training.
Entrepreneurial success is a double-sided equation of both willingness and skillfulness. You cannot succeed with only one side of the equation. Your willingness [energy] is the fuel for the journey and your skillfulness [strategy] is the map for the journey.
Without fuel [willingness], you’ll be stuck half-way and without a map [skillfulness], you’ll end up lost. In other words, you need business skills as well as a personal will to succeed as an entrepreneur.
Entrepreneurial Success = Willingness [energy] + Skillfulness [strategy]
Business revolution is what unusual entrepreneurs start.
They don’t just Do business, they START a business revolution.
I have always strongly believed that there’s more to entrepreneurship than just business as usual. I believe entrepreneurship is a test of your life seeking expression through an idea.
The idea is one that possesses you to do something about a problem, a need or an opportunity. It draws upon your passion, life experience, skills, and talents all channeled into creating a SIGNIFICANT company –a business that is different [unique] and making a difference [useful].
This is essentially our gospel here at naijapreneur. We are about changing the world and profiting from purpose. So anytime I come across a resource [book, person, website, tool, product, etc.] that will equip you more on this unusual entrepreneurial journey, I’m always very excited to share it with you.
The Business Revolution Manifesto
His clarion call was bold;
“Don’t just build a business, start a revolution!”
The underlying question that prompted the business revolution manifesto was equally bold;
“What if instead of fighting to build a traditional career, business or brand, you could tap the power of movements and revolutions to launch and build a fast-paced engine of growth and impact?”
The answer is what you’ll discover in this 66-page business revolution manifesto titled; The Art of Revolution™, a riveting, information-packed manifesto that reveals the 18-step Framework for building a business that MATTERS!
The business revolution manifesto covers the following 18-step framework for starting a business revolution;
1). Revolution Avatar: Who is your Revolution Serving?
2). Identify Shared Pain
3). Who is your Dictator?
4). Who is your Leader?
5). Create An Inciting Incident
6). Identify your “Away From” Rally Cry
7). Identify Unifying Beliefs
8). Define your “Toward” Vision
9). Building your Resonant Story
10). Craft your Manifesto
11). Define the Path
12). Deepen the Tribe Mentality
13). Assemble your Torchbearers
14). Identify Key Resources and Allies
15). Swarm the Launch
16). Mechanisms and Milestones [Measurement]
17). Design your Contagion
18). Ultimate Structural Goal: Tipping Point
Grab your Copy Now, It’s FREE!
To download your own copy of the business revolution manifesto, click here. In it, you’ll get the full 18-element framework, along with insights and case-studies to help you apply the framework to build a business that MATTERS!
One last thing, don’t be selfish with this. Freely you were given, freely you should share with others who need it. Thanks!
The fact that you own 100% of your time is your greatest advantage as an entrepreneur.
While others have to give up their time in exchange for salary, entrepreneurs make use of their time to create products/services that makes them money. I’ve previously written about this; how entrepreneurs create wealth in their spare time.
For an employee, there’s a limit to their income potential because there’s a limit on their working hours. For an entrepreneur, you own and determine your working hours and also get to choose the activities to devote your time to.
However, knowing that you have this advantage is not going to automatically make you a successful entrepreneur. Having 100% ownership of your time is only the beginning, a greater part of success depends on how well you make use of this time and on what activities you engage in with this time freedom.
So what are those critical areas you absolutely need to be focusing the bulk of your time freedom on as an entrepreneur?
The Key To Unlocking The Entrepreneurial Advantage
I partially answered this question in a previous post about how entrepreneurs should be spending their time. I identified 5 highly effective activities that you can focus on as an entrepreneur; I referred to them as the 5Cs of time management for entrepreneurs.
So in a way, this is a follow up post to that article as I will be sharing 9 key drivers of business according to Jay Abraham that you need to devote your time on regularly.
But before we dive into these 9 key drivers of business, I want to quickly talk about the key to unlocking the entrepreneurial advantage in your business.
The key to unlocking the entrepreneurial advantage of time freedom is to focus it on building your business rather than doing business.
This distinction is very crucial and needs to be clarified, if you spend all of your time freedom doing business, you will eventually end up as a worn out self employee. Your business will further entrap you instead of freeing you. The bigger it grows, the tighter its grip on your time and eventually your life if you failed to focus on building rather than doing.
Here’s a previous post that sheds more light on the need to build rather than do business; the paradox of business. You should read it!
Jay Abraham’s 9 Drivers of Business for Unlocking The Entrepreneurial Advantage
There are obviously a million things you should be focusing on as an entrepreneur, but not all of them will give you high return on time invested. But the following 9 areas have been tested and have been found to generate the highest possible leverage for your business by one of the greatest business minds alive; Jay Abraham.
While these 9 drivers of business may not be foreign concepts to you, the underlying mindset here is to spend your time freedom on continually improving and fine tuning them. The keyword is improvement. This is essentially the crucial difference between building a business and just doing business.
This is your number one priority as an entrepreneur because until you can consistently find, attract, convert and retain a profitable customer, you are not yet in business. You knew that already right?
But here’s the winning difference according to Jay Abraham;
“…if you can get people who were selling 1 out of 7 prospects to sell 1 out of 3. The sales leverage available to you is profound. If you can get sales letters that were pulling 0.5% to pull 4%…if you can people who were buying $250 to now buy $400…if you can get people who were buying once a year to buy once a quarter or once a month…if you can get people who weren’t referring anyone to you to start referring five new customers each a year…the combined effect of that kind of marketing leverage is exponential growth.
That’s exactly how you increase your business, your revenue, your sales, your profits, your wealth, and your net worth by factors of ten times or more. That really is.”
But how do you improve on your marketing to unlock this unfair advantage in your business?
Again, according to Jay Abraham, the answer is pretty simple;
“First thing you do is you do an internal marketing audit and inventory. You identify all the marketing activities, processes, and elements going on and then you start looking at the best performing ways to improve upon it. How do you find them?
There are three approaches:
- Look within your organization and see who else does what you want to do better. Model, codify and replicate the highest performing people in your company doing various selling or marketing processes. And get everyone else in the organization to start applying it or adding its best elements to their previous method.
- Go outside your company. Look at other enterprises in the same field outside your market (or even in your market) that have better ways of marketing, of selling, of lead generating, of conversion, of re-selling and of up-selling¾and borrow their success processes.
- Go outside your industry, to related industries, and look at their best practices. Look at the spectrum of opportunities out there that other people have found, uncovered, discovered, refined and are using each and every day with massive success¾to either identify prospects, sell direct, run ads that pull great response, make better sales presentations, get appointments, or attract people to trade shows.
Then borrow, adapt, adopt, and directly funnel and apply those processes and approaches to your business and start doing this exercise as a regular on-going process in which you measure, monitor, analyze, quantify and figure out how many different things you can add to your current success approach by either adding new additional elements or replacing the underperforming ones that are not justifying their time, their effort, their opportunity cost or their existence.”
Marketing without strategy, according to small business guru, John Jantsch of Duct Tape marketing, is the noise before failure.
Here’s how Jay Abraham defined it;
“Strategy is the master purpose your business is all about. It’s different than your business model. Strategy is literally the explanation of the entire operating approach your business is following and why and how every element of it integrates, advances and deploys the big picture outcome that you’re after.”
But how do you improve on your strategy to unlock this unfair advantage in your business?
Jay Abraham identified 3 key steps you need to take;
“1.) The first thing is by understanding that you do have strategy you are currently following even if it’s a reactive one. You’ve got to adopt, first and foremost, a proactive long-term strategy.
2.) You’ve got to figure out what it is you’re trying to do, accomplish, build and sustain with your business.
3.) You’ve got to figure what big operating approach will get you the greatest outcome you want in the fastest period of time on the most sustaining and enduring basis. Once you figure that out then you’ve got to think through your tactics.
These are the actions or vehicles that help deliver the strategic result you’re after. What actions, what activities, what concepts, what approaches will deploy your “big picture” strategy best. Meaning what are the best moves and maneuvers to achieve the big outcome you are after.”
For more tips on strategic marketing, read this unusual article; The Idiot’s Guide To Strategic Marketing.
I’m sure the first thing that came into your mind as soon as you saw capital was money, right? Well you are half right, but that’s not the only capital we are referring to here.
According to Jay Abraham; capital also includes your human capital, your intellectual capital, and yes, your financial capital.
- Human Capital:
These are basically the people working for you. If you can get everybody performing higher you’ve got incredible leverage. How do you do it?
Every dollar you spend in training will produce 20-200 times return annually in yield. So, do you train your people? If so how often or frequently?
- Intellectual Capital:
This is one of the hardest things for any competition to copy in business. It refers to the sum of all the knowledge, skill, talent and experiences of all the people in your company. So what do you all have between your ears?
- Financial Capital:
Are you questioning the yield you’re getting on the money you’re spending¾on the people you’re paying (both staff or contract services), on your marketing expenditures, inventory and technical services? It all ties in.
It’s your responsibility to question the capital expenditures you’re making and the ROI (Return on Investment), the ROE (Return on Effort), the ROP (Return on People), the ROA (Return on Activity), and the ROO (Return on Opportunity).
4). Business model
The business model is different from strategy. It’s basically the means you’re using to affect or achieve your strategy. It’s different than tactics. The model is the whole integrated approach.
The business model you follow can make all the difference in your profitability and there’s enormous leverage here because you can change one element and it could change everything.
Here’s an example by Jay Abraham;
“Let’s say that your business, basically, is a one-shot business. And your business model is you advertise or direct mail market to get leads. You convert them to a one-time sale. You do nothing else with them after they buy or even if they didn’t buy and that’s your business model.
Well, if you added one more dimension to it, after the people that didn’t buy from you and you figured out how to do something else with them for other products and services that are complementary to the need they came to you originally to help them solve or fill. And for the people that do buy, you figure out how to sell them other people’s products or services afterwards. You’ve just added two new dimensions, elements, or layers to your business model and that simple shift in thinking could triple or quadruple your profit.”
As an entrepreneur, time spent developing your professional network is a huge opportunity for potential growth.
According to Jay Abraham, these are the different sources of relationships available to entrepreneurs;
- Business Relationships: people you met during the course of doing business; clients, suppliers, employees, partners, etc.
- Professional Relationships: people in the same field as yourself; colleagues,
- Collegial Relationships: people you attended school with; course mates, school mates, etc.
- Mastermind Relationships: brilliant minds, mentors, business coaches, fellow entrepreneurs, you brainstorm together.
So what do you do with these relationships?
Jay Abraham says;
“If I were you and I had relationships in any kind of other business in any field of endeavor, I’d tap into it regularly. Anybody who, knowingly or otherwise, could be a vessel for you to gain greater expanded understanding or hone in on better performing approaches, strategies, etc., I would first and foremost start picking their minds.
I’d ask them questions. I’d tell them your problems. I’d tell them your goals. I’d ask them questions of whatever their area of skill was, what the highest performing thing they did to accept or solve the issue or objective you’re intent in learning about, what was the secret to be successful at it, what they saw, find out what their company or their employer or their industry did best that you don’t do well and learn how to improve from the discussion.
I’d ask them a myriad of questions that would expand my knowledge base proficiency and perspective. I’d write them down. I would record them. I’d add it all to my current operating system. I would keep borrowing the success processes I learned from these activities, from all kinds of different people I know, and apply them to my business opportunities or challenges.”
6). Distribution channels
These are the various means through which your products/services get into the hands of your target customers.
According to Jay Abraham;
“You have a number of unrecognized distribution channels you don’t fully maximize and there’s enormous leverage in them. For example, let’s say that you distribute your product through five hundred retailers. Well, that is a distribution outlet for all kinds of other products.”
By spending more time to maximize the value of your distribution channels, you open up your business for more growth. For example, if you are a retailer with a physical outlet and you decide to take your business online through eCommerce, your capacity to sell to more customers will be significantly maximized.
There are basically two ways of leveraging your distribution channels;
- Increase your distribution channels: this is quite obvious, just like the example above. If you have only one distribution channel, adding more will increase your company’s capacity to grow.
- Offer more products through your existing distribution channels: this is less obvious, and if well executed can increase your company’s growth potential with less investment on your part. Here’s a fantastic case study from Jay Abraham;
“We had a company that had two products in the athletic clothing field. They were doing about $2 million and making half a million in profit. They came to me because their products were starting to slow down. They wanted me to give them a breakthrough idea. I looked at their business and I saw that their real assets weren’t their two products. They had accounts with 5,000 retailers. Amongst them all were Nordstrom’s, K-Mart, Target, JC Penney and Parkway and Hosiery.
I showed them that all they had to do was secure the rights to other people’s athletic products then give those people a royalty for their clothes design, start having those products manufactured for my client, put their licensed products through the same distribution pipeline and they’d make ten times as much selling these other products through their distribution channel as they did from their main products. They did it and I was right. They made a fortune.”
7). Products and services
How many other places could you take your existing product, service or combinations or variations of them and apply it to other fields or other regions or buying groups. Or could you license other people to use it?
Could you package it in different ways sizes or combinations? Could you package other people’s things with it? Could you package your products or processes and make that a product or service? How many new products or services could you come out with that are your natural extensions, embellishments, top of the line premium versions, higher performing versions, or stripped down white label versions? Just by adding one or two or five different components you can create an entire new product and penetrate new market niches.
Every business mechanism can be broken down into its driving processes and sub processes. Once you figure out what the processes driving an activity are, they can be measured, they can be quantified, and they can be vastly improved.
When you figure out how your given processes currently perform, (which is nothing more than a function of analysis, monitoring and measurement), you can then find other people in your organization or other people in your industry or other people doing the same function outside the industry who are doing it much better, faster, easier, safer, more productive, more effective, more profitably. Then simply adopt it to your business.
If you’re very introspective and you’re anti-social, you’re not going to be able to go and build mastermind groups and pick people’s minds and borrow success processes. If your ideology is: You only like what you like; you’re not going to be able to travel outside your comfort zone and study other people, other business philosophies, other mindsets, other ideologies.
You’ve got to figure out what your ideology is, what your belief system is, what your whole value system is and how it either helps or hampers your current business activities. Then it needs to either be strengthened and fortified and connected to and or replaced, based on your current business model and your strategy.
You also need to study other people’s ideology to compare how yours is better, different or worse and what elements of other’s you can borrow and add and what elements of yours you could teach to others. When you do that, you’re going to expand your capability and your sense of what’s possible.
The entrepreneurial advantage is time freedom and the key to unlocking it is focusing on building rather than doing business. We’ve identified 9 key drivers of business according to Jay Abraham that can help you fully maximize the entrepreneurial advantage of time freedom at your disposal.
The nine drivers discussed above are excerpts from Jay Abraham’s ebook, you can download the full version here.
Can Everyone Become An Entrepreneur?
To effectively answer this question, we’ve got to go back to the very beginning; what is entrepreneurship? We need to understand the very meaning of the word –entrepreneurship.
Entrepreneurship is derived from the French word ‘Entrepreneur’, dating as far back as 1723. It means an individual who undertakes, organizes and manages any enterprise, especially a business with considerable initiative and risk.
In other words, entrepreneurship is simply the practice of being an entrepreneur – a person who takes the initiative and risk to start a new business venture.
Since this is so, then the next logical question should be this; is everyone capable of taking the initiative and risk to start a new business venture?
The keyword here is capable.
That is, do we all as humans possess the capabilities to become an entrepreneur?
The answer as you will soon find out is YES!
But don’t just take my word for it, let’s dig in deeper to unveil this mystery. To do that, we will be looking at the 3 major paths research has revealed people take to become an entrepreneur.
How To Become An Entrepreneur
According to Bill Aulet, the professor of entrepreneurship at the MIT Sloan School of Management and the Author of Disciplined Entrepreneurship; there are primarily 3 ways of starting a new business venture.
Meaning, there are basically 3 ways of becoming an entrepreneur;
You have a breakthrough technology
You have an idea
You have a passion
You Have A Breakthrough Technology
This is perhaps the most celebrated form of becoming an entrepreneur. Names of great inventors such as; Henry Ford, Thomas Edison, Larry Page and Sergey Brin of Google, Mark Zuckerberg of facebook, Elon Musk of Tesla, Bill Gates of Microsoft, and of course the legendary Steve Jobs all come to mind.
These are extraordinary people whose inventions have moved the world forward. They have literally changed the way the world works through their breakthrough technologies. Entrepreneurs in this category are the exceptionally gifted minds.
When people think of the word entrepreneurship, they are the very first kinds who come to mind, naturally. Permit me to say this; they are the standard when it comes to entrepreneurship. Their breakthrough inventions are not response to existing market needs. Rather, they just create new needs and new markets that absolutely never existed.
Their ability to invent breakthrough technologies often leaves the rest of us to wonder if we could ever become an entrepreneur. The impact they make in the world as a result of their breakthrough technologies, make the rest of us seem like we are just playing.
We cannot help it but to wonder if we could ever accomplish such feats in our life time. I don’t know about you, but I certainly ask myself this. I mean, this people are simply out of this world, they literally invent the future!
You Have an Idea
Closely following the people who become an entrepreneur by creating new business ventures from their breakthrough technologies are those with great business ideas.
They don’t invent any breakthrough technology, they simply think up breakthrough ideas that completely change the way a product or service or industry works. These breakthrough ideas are then translated into new business ventures.
As a matter of fact, their ideas are usually a radical improvement or alteration of an already existing business model. They literally turn the old on its head and come up with unusual ways of solving the same problem faster, better or cheaper than all the existing players in the market.
Their genius lies in thinking up new ways of combining different processes or approaches of solving a particular problem or creating a particular product or delivering a particular service.
Popular examples include; DELL, Fedex, eBay, Wal-Mart, McDonalds, CNN, SouthWest Airlines, Starbucks, Amazon, Spanx, etc.
These are the kind of ideas you call the million dollar idea. They are not your everyday ideas. They are not seen by the average Joes. They come only to those whose minds have been prepared for it!
You Have a Passion
The last, but certainly not the least way of becoming an entrepreneur and starting your own business venture is by having a passion.
Of all 3 ways of becoming an entrepreneur, this is perhaps the easiest entry level for everyone. Anyone willing to take the initiative and risk entrepreneurship requires will do just fine with this 3rd option. This is the kind of entrepreneurship for the rest of us!
When compared to the other two options, it is far less intimidating to become an entrepreneur by starting a new business venture around your passion.
The first requires a great level of creative genius in a particular field.
The second requires a great level of insight and opportunity.
But starting a business around your passion doesn’t require any rare gift besides the ones you’ve already been given from birth. You don’t need to be a creative genius to have a passion. You don’t need insight and opportunity to have passion.
All you need to have passion is to be alive.
All living souls have passion. It is there whether you choose to admit it or not.
People who become an entrepreneur by starting a business around their passion are seemingly ordinary people who do what they do extra-ordinarily well.
The secret lies in their decision to do something significant with whatever they are passionate about. They simply take what they have been given from birth and consciously make up their minds to do something meaningful with it. They build businesses that matter!
It’s not so much about the invention, technology or idea, but fundamentally about their passion to solve a particular problem. Their secret is their passion to make a difference in a particular field, industry or society. They are driven by change and their passion is their only weapon for creating that change.
Think about successful entrepreneurs like; Oprah Winfrey, Richard Branson, Tommy Hilfiger, Mohammad Yunus, Donald Trump, Robert Kiyosaki, Rupert Murdoch, Seth Godin, Gary Vaynerchuk, Brian Clark, etc.
They are not exceptionally gifted than the rest of us, they are just ordinary people who love what they do and do what they love extra-ordinarily well. They are simply using their God-given talents to create multi-million dollar businesses.
They are the entrepreneurs who want to make a difference using their passion to create unusual products/services for solving humanity’s problems. They don’t wait until they create a breakthrough technology, in fact, in most cases they can’t. Neither do they wait to strike a breakthrough business idea, in fact, in most cases, they don’t.
I belong to this category of entrepreneurs. For me, entrepreneurship is all about changing the world and profiting from purpose/passion. I created this site, naijapreneur to help as many out there who also belong to this category to discover entrepreneurship for the rest of us.
As you might have now realized, there isn’t anyone who can’t become an entrepreneur. The problem in most cases is trying to become a different kind of entrepreneur following a path you weren’t created to function.
Finding your own category of entrepreneurship is crucial to your entrepreneurial journey. You shouldn’t force your way into a category you don’t have what it takes to function, rather, flourish in your category.
Nevertheless, there’s no law that restricts you to any one of these 3 ways of becoming an entrepreneur. I wrote this unusual article to point out that there are other approaches to becoming an entrepreneur than you might be aware of.
What’s most important is that you know which one of them you started or is starting your entrepreneurial journey on. And make sure you enjoy the ride; after all, no one forced it on you!
For every new subscriber to naijapreneur, in the welcome email, I often encourage them to write me back telling me about what they are currently struggling with in their business.
In other words, what’s their business status quo?
Exactly 3 days after their subscription, they get another email from me asking them to tell me what they are currently struggling with in their business.
Why do I insist on you sharing your business struggles with me?
Because I know you wouldn’t be reading naijapreneur if there wasn’t something bothering you as an entrepreneur. That you are here is enough proof that you have a problem that you don’t want or lack a result that you desperately want.
I am glad many new subscribers respond to this and share their current business struggles with me. And to everyone who did, I replied with specific action steps to take to change the situation of things in their business.
For some, I ask a couple of questions to better understand their unique situation and for others; I point out likely causes for their struggle and then offer action steps to improve their situation.
This is fair enough, right?
But what happens next after replying these emails has never ceased to amaze me, —SILENCE!
You would think that for someone to have taken the time to reply and point out what their business struggles are, they would eagerly implement the recommended ideas. But alas, nothing happens!
At first, I used to be bothered about this, but as more and more people repeated this same thing, it finally dawned on me what the real issue was; CHANGE IS PERSONAL. Your Status in life is solely determined by YOU!
As much as I want to see changes in the businesses and lives of my readers, I cannot make these changes happen for them without their involvement.
As much as I want to change the status quo of their business, I cannot do so until they make up their minds and take the necessary steps to change their status quo.
Define Your Status
Generally, people when in problem, fall into one of 3 categories in life;
- Status quo – they know they have a problem, but want the problem to solve itself. Avoid them; you can’t convince them of anything.
- Away from – they want to fix something, cure something, alleviate something, get unstuck. They want a way out from their problem. Support them.
- Toward – they want to achieve something, gain something, be something. They see problems as the test they must pass to get ahead to the next level. Encourage them.
Which One Are You?
A man was walking through a forest when he saw a crippled fox. “I wonder how it manages to feed itself?” He thought.
At that moment, a tiger approached, carrying its prey in its mouth. The tiger ate its fill and left what remained for the fox.
“If God helps the fox, he will help me too,” The man thought. He went back home, shut himself up in his house and waited for the Heavens to bring him food.
He lay there in bed waiting for God to provide for him as he had for the fox, but instead just starved.
Just when he was becoming almost too weak to go out and work, an angel appeared.
“Why did you decide to imitate the crippled fox?” asked the angel. “God has given you gifts and abilities to contribute to the world and make a living, while looking after the crippled foxes of the world. Get out of bed, pick up your tools and follow the way of the tiger!”
I only have one question for you today. Which one are you, the fox or the tiger?
Who is the Status Quo Entrepreneur?
You will know them when you see one;
They are the tigers who envy the fox
They are the dreamers that never do
They are the pessimists who never see good in anything or anyone
They are the know-it-all with no results to show
They are the fast talkers who never really listen
They are the full-of-idea types with no clarity of what to do next
They are the planners who are too scared to execute
They are the busy-bodies who rarely pay attention
They are the cheerleaders who never participate in the game
They are the copycats who never take the time to find their own thing
The most obvious sign of the status quo entrepreneur is stagnancy –they are stuck in their inaction. Neither going forward no going backward, they are just exactly how and where you last saw them.
There’s very little you can do to help the status quo entrepreneur. The way out lies in his/her hand.
Action is the Antidote for the Status Quo Entrepreneur
You can complain all you want about the state of your life and the state of your business. You can consume all the motivational self affirmation materials in the world while hoping that positive thinking will bail you out.
Nothing much will change, until you decide to take action.
The most effective way to change anything is to do something about it.
All the information you have been gathering from reading naijapreneur BUT never putting them to use will not change your business.
You can keep on following the path of the status quo entrepreneur or you can become like the tiger and forge your own pathway in life and in business.
The choice, as always is YOURS!