How to Set-Up an Enterprise - Decision to be an Entrepreneur
It All Begins with
an Idea
The overriding reason for anyone to
think of establishing a SSI unit can be summarised in
one word - opportunity. An opportunity to be your own
boss, to provide a product or service, to implement
your ideas which can generate sufficient surplus is
reason to think of starting up a SSI unit.
Starting a small business takes a
lot of courage. To be successful - to stay in business
- you need a combination of hard work, skill and perseverance.
Generally, people who start their
own businesses can be grouped into two broad categories.
The first group consists of people who know exactly
what they want to do and are merely looking for the
opportunity or resources to do it. These people may
have already developed many of the skills necessary
to succeed in their chosen field and are also likely
to be familiar with industry customs and practices,
which can help during the startup phase of a new business.
The second group consists of people
who want to start their own business, but don't have
any real definite ideas about what they'd like to do.
They may have developed skills in the course of their
employment or education, but may not be interested in
opening a business in the same field of endeavour.
How a person will proceed depends
on, mainly, to which group they belong to. To evaluate
the aptitude for small business ownership, an entrepreneur
needs to:
Understanding the Responsibilities
of Ownership.
Before starting a business entrepreneur
should know what's involved in owning a business and
what are the roles s(he)'ll have to play if they start
on their own one? Most important fact to keep in mind
is - Owning a small business is not just another job
but a lot more than that. You are totally and completely
responsible for its growth, development and its future.
It's a completely different lifestyle. Entrepreneurs
have to ask themselves whether they are ready for a
complete commitment to the success of their business.
As a small business owner, entrepreneurs
are going to have less time for their personal life
and probably be using much of what they own as collateral
to raise money for the business. The pros and cons of
owning a business are listed below.
Pros:
You'll be your own boss and the
boss of other people and make the decisions that are
crucial to the business' success or failure.
You'll have the chance to put
your ideas into practice.
You will make money for yourself
rather than for someone else.
You may participate in every aspect
of running a business and learn more about every aspect
of a business and gain experience in a variety of
disciplines.
You'll have the chance to work
directly with your customers.
You'll have the personal satisfaction
of creating and running a successful business.
You'll be able to work in a field
or area that you really enjoy.
You'll have the chance to build
retirement value (for example, by selling the business
when you retire).
Last but not the least no one
can fire you.
Cons:
You may have to take a large financial
risk and will probably have to work long hours and
may have fewer opportunities to take vacations.
You may end up spending a lot
of your time attending to the details of running a
business and less time on those things you really
enjoys.
You may find that your income
is not steady and that there are times when you don't
have much income coming in at all.
You may have to undertake tasks
you find unpleasant, such as firing someone or refusing
to hire a friend or relative.
You may have to learn many new
disciplines, such as filing and bookkeeping, inventory
control, production planning, advertising and promotion,
market research, and general management.
Special Pros And Cons Of The Home-Based
Business:
Your startup costs will be lower.
Your operating costs will be lower
than they would if you were renting space and paying
utilities.
Your commute will be shorter.
If your location is unimportant
to your business, you can theoretically live anywhere
and still operate your business.
You may be more flexible in your
schedule if your business can be conducted at your
convenience or outside "normal" weekday business hours.
On the other hand, you're much
more vulnerable to interruptions from family members,
neighbors, and door-to-door salespeople.
You may have trouble attracting
qualified employees.
You may be less accessible to
suppliers.
You may have an image problem,
although with the growing popularity of home businesses,
that's less common.
You may run out of space at home
if your business grows.
What do you want from your business?
If you want to "succeed," how will you know if you get
there? What should be the next goal once you reach the
initial goal. Knowing what you want from your business
permeates all of the other decisions you'll have to
make in starting a new business. It will affect which
business you choose, how you evaluate your chances for
success, and how you determine if you have the right
skills.
Estimate The Impact On Your Everyday
Life
Your life will change completely once
you start your own business. Try to comprehend the degree
to which your life is going to change when you become
a business owner? Many of the more "secure" aspects
of employee life does not exist/ will vanish once you
open up your own business. You might have to be perform
more than one function, work at all irregular hours,
juggle between business and household demands. You will
need to reprioritise your schedule, work and personal
life.
Evaluate Your Skills
Evaluate your own skills and make
judgments about whether you're ready to own your own
business. There are many entrepreneurial quizzes available
on the net and with Entrepreneurship Development Institute, which test your entrepreneurial capabilities.
Assessing Your Strengths
Successful small business owners know
their own strengths and weaknesses. They build their
businesses around their strengths and they compensate
for their weaknesses. If you're to succeed, you'll have
to be able to identify what you do well and what you
don't do so well.
While evaluating yourself, be honest
otherwise you'll only hurt yourself if you're not. Also,
don't panic if you discover that you have weaknesses.
Every one including small business owner has them. The
key to success is not so much in having every skill
as it is in finding ways to compensate for those weaknesses.
By evaluating yourself, you are making
a list of what you like to do and what you don't like
to do. Generally, you like to do things you are good
at and you don't like doing things you're not good at.
It's a simple approach, but it should help you start
to focus.
Though the list is not exhaustive
it does tell you about the major characteristic of a
entrepreneur.
Good health
Entrepreneurs keep themselves physically resilient and
in good health. They need to work for extended periods
of time, and while they are in the process of building
their business, good health is a must.
In small businesses, where generally
management resides in hand of 1 or 2 person, the leader
must be there. In a new start up entrepreneur cannot
afford a support staff to cover all business functions,
and therefore he will need to work long hours. At the
end of the eight-hour day, when everyone else leaves
for home, you have to continue to work into the evening,
developing new business ideas, checking out days work
and chalk out strategy to deal with challenges and problems.
Self-Control
Most entrepreneurs believe they can do the job better
than anyone else and will strive for maximum responsibility
and accountability. An entrepreneur needs to maintain
his/her calm even in face of adversity. Entrepreneur
realises loosing temper won't help the situation.
Goal setting
Entrepreneurs enjoy creating business strategies and
thrive on the process of achieving their goals. Once
they achieve a goal, they quickly replace it with a
greater goal. They strive to exert whatever influence
they can over future events. They have a compelling
need to do their own thing in their own way. They need
the freedom to choose and to act according to their
own perception of what actions will result in success.
Self-Confidence
Entrepreneurs are self-confident and tackle problems
immediately with confidence and are persistent in their
pursuit of their objectives. Most are at their best
in the face of adversity, since they thrive on their
own self-confidence. Before anyone else you have to
believe in yourself and your product or services. It
will show when you will meet your future customer, and
suppliers.
Sense of Urgency
Entrepreneurs have a never-ending sense of urgency to
develop their ideas. Inactivity makes them impatient,
tense, and uneasy. They thrive on activity and are tireless
in the pursuit of their goals.
Comprehensive
Awareness
Successful entrepreneurs should have ability to comprehend
complex situations that may include planning, making
strategic decisions, and working on multiple business
ideas simultaneously. They are farsighted and aware
of important details, and they will continuously review
all possibilities to achieve their business objectives.
At the same time, they devote their energy to completing
the tasks immediately before them.
Realism
Entrepreneurs are realistic, they accept things as they
are and deal with them accordingly. They will change
their direction when they see that change will improve
their prospects for achieving their goals. They will
verify any information they receive before they use
it in making a decision.
Conceptual Ability
Entrepreneur should possess the ability to identify
relationships quickly in the midst of complex situations.
They identify problems and begin working on their solution.
They are not troubled by ambiguity and uncertainty because
they are used to solving problems. Entrepreneurs are
natural leaders and are usually the first to identify
a problem to be overcome. They quickly identify an alternative
problem-solving approach.
Status Requirements
Entrepreneurs like the business they have built to be
praised. When they need help, they will not hesitate
to admit it especially in areas that are outside of
their expertise. During tough business periods, entrepreneurs
will concentrate their resources and energies on essential
business operations. They want to be where the action
is and will not stay in the office for extended periods
of time.
Entrepreneurs are more concerned
with people's accomplishments than with their feelings.
They generally avoid becoming personally involved and
will not hesitate to sever relationships that could hinder
the progress of their business.
Entrepreneurs are impatient and drive
themselves and everyone around them. They don't have
the tolerance or empathy necessary for team building
unless it's their team, and they will delegate very
few key decisions.
Entrepreneurs need good interpersonal
skills to be able to adjust and survive as their organization
grows and becomes more structured.
Entrepreneurs should have a considerable
amount of self-control and should be able to handle business
pressures. They should learn to relax in stress situations
and are challenged rather than discouraged by setbacks
or failures. Entrepreneurs are uncomfortable when things
are going well. They'll frequently find some new activity
on which to vent their pent-up energy. They are not content
to leave well enough alone. Entrepreneurs tend to handle
people problems with action plans without empathy. Their
moderate interpersonal skills are often inadequate to
provide for stable relationships. However, the divorce
rate among entrepreneurs is about average.
You might possess three or more of
the characteristic listed above, you don't necessarily
need them all use your strengths to compensate for your
weaknesses.
Once you've decided that you have
the right stuff to be an entrepreneur, check out the
following prime considerations for determining if your
business idea has a chance to succeed before you pump
your life savings into a small business.
Does the idea fire up your motivation
and is it adequate enough to keep you going for next
1-2 years?
Is it a viable business proposition
in your area?
Does it match the needs of your
clientele, local or otherwise?
Check it out with basic market
research.
Test it out at market place
Consult with the experts
Look out for competition in the
field
Is it a sunrise industry?
Your business opportunity
Project conceptualisation
In short, ideas need to be
filtered through a 5-layer sieve of
Researching
your industry-how can you learn more
about your chosen industry and about the resources that
are available to help you?
Market assessment-is there a market for your product or service? If
so, how much income can you expect to derive from it?
Profitability
assessment-how much will starting a new
business cost you? Can you afford a lengthy "red ink"
period following startup, as well as periodic lulls
in cash flow? Can you afford to fail?
Financing assessment-will you be able to obtain the necessary financing
for your business? If so, from where?
Legal assessment-
what potential legal liabilities are you exposing
yourself to by starting a new business? Are the costs
of protecting yourself worth the trouble?
Once the ideas are screened and a
viable business opportunity emerges the project has
to be conceptualised in all its dimensions. The 4 P's
of Project Conception are:
Product (Shape, Size and Nature)
Process (Technology to produce
the product)
Place (Location of Plant)
Partner (Technological or Financial
Collaborator)
Having a business plan will
help you in defining these 4 P's and chalking out the
strategy for future of your business. It will help you
establish goals, targets and identify the strengths
and weaknesses.
