Introduction to Entrepreneurship
In recent times, entrepreneurship has been defined in several ways. Some call it the art of starting a business, while others see it as a means to capitalize on innovative solutions. With both views being equally right, entrepreneurship has come to be the process of creating, developing, and managing a new business venture in order to make a profit. This definition isn’t new at all, in fact, if you searched on Google for the definition of ‘Entrepreneurship’, this is what comes out.
In spite of the fact that the entrepreneurship concept is well known, it’s only a few people that have grasped the full scope of entrepreneurship. Entrepreneurship as a whole is a challenging and rewarding journey that requires dedication, hard work, and a willingness to take risks. As the father of Management Thinking, Peter Drucker said, successful entrepreneurs always search for change, respond to it, and exploit it as an opportunity. These entrepreneurs possess a unique set of skills and qualities, such as creativity, innovation, passion, persistence, and adaptability, that enable them to turn their ideas into successful businesses.
The Process of Creating a Startup
Newly established businesses are like newborn babies, they both require close attention. Creating a startup involves a series of steps that must be followed in a specified order to increase the chances of success. These steps are practical guides to launching a successful startup and they are highly crucial to a successful launch of any start-up.
The first step in creating a startup is to identify a problem or a need in the market. Market research is an initial and pivotal step in starting a business. This can be done by conducting market investigations, analysing industry trends, and talking to potential customers. This needs assessment and market research are done to determine the needs, or "gaps," between current and desired outcomes in the market. By identifying these problems, gaps and needs, entrepreneurs can develop products or services that provide a solution and meet the needs of their target audience.
The second step is creating a business plan. A business plan is a comprehensive document that outlines the goals, strategies, and financial projections of a startup. The term “Business Plan” sounds so technical and the definition given may concede with this view, but this is not always the case for startups. For a startup, the business plan document should contain details of the company's objectives and how it plans to achieve its goals from marketing, financial, and operational standpoints. This plan should be simple, concise, flexible and focused on problem-solving. A good business plan must consist of an executive summary, a company description, a management team description, a product or service description, a market analysis, a marketing strategy and a financial plan. With this detailed and practical business plan, startups can refer back to this document as an internal guide to keep the executive team focused and work toward short- and long-term objectives. A very critical tool for securing funding, attracting investors, and guiding the growth of the business is a good business plan. Some of the elements of a good business model plan will be highlighted.
The first element is to develop a unique value proposition. A unique value proposition (UVP), also known as a unique selling proposition (USP), is a statement that clearly explains what makes a product or service distinct or unique and why customers should choose it over competitors. UVP should not be confused with a business slogan, tagline or motto. Slogans and taglines just give a brief description of the business and what it has to offer, UVPs state the same but also point out distinguishing features of the product or service in comparison to the competitors. The significance of a unique selling proposition may seem minute to many but advertisement through mainstream media is gradually getting shorter with time and your ability to state the peculiarity of your brand in very few words has taken the pedestal in this fast-paced media. Most likely, there are other companies that sell goods that are comparable to your own. For your target customer to understand how your product is not only different from the competition but better than the competition as well, your unique value proposition is crucial. Additionally, when you successfully convince customers that your product is superior to that of your rivals, higher prices become less of a barrier. This is why developing a strong and compelling value proposition is critical to the success of a startup.
In addition to developing a strong UVP and raising the expectations of your target market, a practical plan is then needed to meet up to the standards communicated. Securing funding is an essential step to launching a startup. Funding is needed for two main reasons; startup capital and expansion finances. Startup capital is needed to pay for any or all of the required expenses involved in creating a new business while expansion financing is capital used to enlarge a company's assets by internal or external means, such as the addition of new products and services or new production systems. All these expenditures need to be funded and there are several sources to meet this fund requirement such as bootstrapping, friends and family, angel investors, venture capitalists, and crowdfunding. When selecting the source of finance that will be used for a startup, entrepreneurs need to factor in the required amount of funds, duration of finance, type of the business, size and status of the business, gearing level, flexibility and external influences before making a decision. It is important to choose the right type of funding that aligns with the needs, capacity and target of the business.
Yet another critical element of a good business model and a step for the successful launch of a startup is team building. Building a team is critical to the success of a startup. When building a team, it is recommended to begin with oneself and be prepared for the role of leadership. Being the foundation and primary team lead of a startup, the first responsibility as a team leader is to get a full understanding of the business, know one’s personal weaknesses and strengths and then build on them to ensure productivity. After adequate self-development and growth, the team-building process can now commence. As the leader, it is paramount to establish a positive corporate environment that supports healthy team interactions. This promotes creative thinking and a supportive atmosphere for expression. It is also important to ensure that the team recruitment process is not stinted. Be economical instead, look out for top-tier personnel who are affordable and not simply the cheapest you can acquire. Be highly open to diversity amongst the team but most importantly, ensure the whole team has a single purpose which is, the continuous progress of the business. Hiring individuals who share the vision and values of the business and are committed to its development is one of the key ingredients to the successful launch of a startup. This team should consist of individuals who possess the necessary skills and expertise to help the business grow.
Another factor to consider is the location. Location is a very critical ingredient in the dish of a successful startup. The location of a business considerably impacts visibility, accessibility, brand image, marketing strategies, financial aspects, and even employee satisfaction. This could either be a physical location or an online store depending on the position of your target market. With the extensive market survey carried out at the inception of the startup, customers’ demographics are derived. With this information, businesses can decide whether they want to run physically or digitally and select the optimal business location to attain maximum profits.
With a good product or service, UVP, business model, funding and location, amongst others, launching a successful startup will not be beyond reach. Once the startup is launched, it is important to focus on growing the business. The launch of the business is only great when the success is sustained through expansion. This can be done by developing and executing effective marketing strategies, improving the product or service, expanding the customer base, and increasing revenue. Yes indeed, launching a successful startup requires dedication, hard work, and a willingness to take risks but entrepreneurs need to also be adaptable. It is necessary to have a curious mindset and be quick to seize opportunities but also patient enough to identify viable ones. By following this structured approach, entrepreneurs can increase their chances of launching successful startups.
Joshua Ejim is a research analyst with a B.ENG in Civil Engineering who develops articles, research reports, white papers, and other published documents. An ethical hard worker that strives to be the best through learning and a fixed dedication to the course. He also enjoys photography, writing, and traveling in his leisure.