Elements of entrepreneurship

Different people define entrepreneurship in different ways. Some say it is about selling new things in news ways, some say it is about working for your self, some say it is starting a business. Whatever is your idea about entrepreneurship, this blog will help you.

I have listed out the important aspects of entrepreneurship. They can be useful for established businessmen and CEOs also because sustainable business is all about adapting to the changes in society and economy. Businesses have to keep reinventing themselves.

1. Business Model: This part of business planning is most vital and has to be very rigorous. Entrepreneurship starts with a business idea and the first thing you have to decide is the business model. Let us try to understand term "Business Model". Business model is the abstract concept about how you are going to make money and relationship between building blocks of the business like cost, pricing, delivery, infrastructures etc. Read this Wikipedia page. Remember the fact that same product or service can be sold using different business models. For example software can be sold to individuals as well as corporates, there can two flavors of same software meant for different client base. There can be various permutations and combinations of sales-marketing, pricing, manufacturing and procurement of same product or service. Please do your homework here. A lot of clairvoyance and analysis is needed here.
2. Homework on Product or service: You have to make sure that your product or service is of good quality. Before plunging, ask your self 10 times whether it will be absorbed by market or not. It has to be cheaper and better if you are operating in some existing business model. If your business model is totally new then you can decide your own pricing depending on consumer's expenditure capability and cost of product and service. Do not be very greedy in the beginning. One more fact that if you are going for existing sustainable business model you will face great competition as most of the other businesses would like to invest in this area, on the other hand if your product is innovative there will be associated risk also, so choose options wisely.
   
3. Target market: Market is like a pond and business is like fishing. So larger the consumer base, better the chances of getting business. You will have to do demographic analysis and make sure size of market is big enough. Sometime market is not there but it can be created by enticing consumers.
   
4. Sales channel: A business without proper sales channels is a vehicle without wheel. You have to calculate cost of sales and way of selling in very beginning. Sales is the most important part of the business.
   
5. Sustainability: Choosing a sustainable business model is another important aspect. You do not want to become a businessman for few months. Understand the fundamentals of economy. There are always cycles when saturation of demand and supply takes place. You can not monopolize, even if you are first to start a product or service, there will always be competition. If your business model looks sustainable for at least 2 or 3 years then you should go ahead.
   
6. Working Capital: Finance is another important aspect. Raising funds for working capital is a on going exercise. It is said that break-even for a startup takes near about 12 to 18 months. So be ready to run your business without profit for at least one year. One of the important lesson I have learned from the book "The road ahead" by Bill Gales that you should always have working capital for one year means, you should be able to meet business expenses for one year at any point of lifespan of business. Money can be raised by different means like Venture Capitalist, Banks, Friends, Stock options etc.
   
7. Marketing: Market is equally important as other aspects of business. You should always keep some money aside for marketing or branding your product or service. People like to go for a famous brands. One should be careful while choosing media for advertising. The media where there is no way to know that promises were kept or not, should be used least. For example you have no way to know that SMS was send to given number of people but you know that your ad is printed on the newspaper.
   

You will always be successful if you understand what society needs and predict the socio economical changes. In the beginning you have to be very gritty and tough but if you sustain, world is yours. If you like, you can refer this model of strategy and change about business.



"Entrepreneurs are risk takers, willing to roll the dice with their money or reputation on the line in support of an idea or enterprise. They willingly assume responsibility for the success or failure of a venture and are answerable for all its facets."
- Victor Kiam, best known for his "I liked it so much, I bought the company" ads for Remington electric shavers

"The cover-your-butt mentality of the workplace will get you only so far. The follow-your-gut mentality of the entrepreneur has the potential to take you anywhere you want to go or run you right out of business--but it's a whole lot more fun, don't you think?"
- Bill Rancic