The first step in pursuing an entrepreneurial dream is to start with a viable idea and plan like crazy. Once someone has a new idea in mind a business plan must be drawn and decisions must be made about legal structure, financing and basic tactics, such as whether to start the business from scratch and whether to pursue international opportunities from the start.
New business Idea:
To some people the idea for a new business is the easy part. They do not even consider entrepreneurship until they are inspired by an exciting idea. Other people decide they want to run their own business and set about looking for an idea or opportunity. Note that 37 per cent of business founders got their idea from in depth understanding of the industry, primarily because of past job experience. Interestingly almost as many 36 percent spotted a market niche that wasn’t being filled.
Sources of entrepreneurial motivation and new business ideas:
Reasons for starting a business:
Joint Family business – 41%
To control my figure –36%
To be my own Boss – 27% ‘
To fulfill a Dream – 25% ‘
Downsized / laid off — 5%
Source of non Business Ideas:
In depth Understanding of industry:
Profession – 378%
Market Niche spotted – 36%
Brainstorming — 7%
Copying someone else – 4%
Hobby – 4%
Others – 17%
The trick for entrepreneurs is to blend their own skills and experience with a need in the marketplace. Acting strictly on one’s owns skills may produce something no one wants to buy. On the other hand finding a market niche that one does not have the ability to fill does not work either. Both personal skill and market need typically must be present.
The business Plan:
A document specifying the business details prepared by an entrepreneur prior to opening a new business:
Once an entrepreneur is inspired by a new business idea, careful planning is crucial. A business plan is a document specifying the business details prepared by an entrepreneur prior to opening a new business. Planning forces the entrepreneurs to carefully think through all of the issues and problems associated with starting and developing the business. Most entrepreneurs have to borrow money, and a business plan is absolutely critical for persuading lenders and investors to participate in the business. Studies have shown that small businesses with carefully thought out written business plan are much more likely to succeed than those without one.
The details of a business plan may vary, but successful business plans generally share several characteristics:
1) Demonstrate a clear, compelling vision that creates an air of excitement.
2) Provide clear and realistic financial projections.
3) Over detailed information about the target market.
4) Include detailed information about the industry and competitors.
5) Provide evidence of an effective entrepreneurial management team.
6) Pay attention to good formatting and clear writing.
7) Keep the plan short – not more than 50 pages long.
8) Highlight critical risks that may threaten business success.
9) Spell out the sources and uses of start up funds and operating funds.
10) Capture the reader’s interest with a killer summary.
The business plan should indicate where the product or service fits into the overall industry and should draw on concepts that will be discussed throughout, for example competitive strategies that entrepreneurs can use. Detailed suggestions for writing a business plan are provided in the Manager’s Shoptalk box.
Source: New Era management