The dream of being an entrepreneur is very appealing to many. Over 30 years of experience has taught me that the following items (in no particular order) are essential for entrepreneurial success:
1) Unlimited energy – being an entrepreneur only sounds easy.
2) Always market your product – a bane of the entrepreneur is the large customer order. The business owner loses focus on developing business for short term production or services.
3) Understand product cost – too many business owners sell below cost (don’t realize it) and then try to make it up in volume (dooming the company.)
4) Increase their understanding of business concepts – a lack of understanding about working capital will also derail a business. The new entrepreneur will be so excited with a sale that he/she might establish unacceptable terms in regards to payment. Remember a sale is not a sale until the cash is collected.
5) Identify the right product and the right market – an entrepreneur can be infatuated with the concept of being in business. So much that he/she does not take the time to choose the right product or right market.
Note: many people will say that small businesses fail due to being undercapitalized. This is not correct. Small businesses fail because they do not understand the mechanics of running a business. They take the wrong actions and create situations that lose money. The continuous loss of money eventually eats up their capital. Their mistake is not running out of capital, it is making bad business decisions that cause the erosion of capital.
© 2010 - Jim Lindell