Posts Tagged ‘small business survival’

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Aspiring entrepreneurs can at least take heart in the fact that not all of the available stats about business failure are credible. One of the foremost of these invalid stats is attributed to a study done by Bloomberg and which declares that 8 out of 10 businesses fail within the first 18 months. The stat has been widely referenced including here. It’s sort of reassuring that this particular study is non-existent.

According to the SBA approximately 50% of new businesses survive for 5+ years while about one-third survive for 10+ years. There is however sufficient reason to question this statistic as well and this has to do with how the reason for failure is defined. Indeed, businesses close down for a variety of reasons, apart from failure. The SBA’s stat is therefore inaccurate.

This position is supported by a University of Tennessee 2013 study which showed that only 25% of businesses failed in Year 1 while just 36% failed in Year 2. An alternative independent study estimates the number of closures at 3% to 25%.

I digress though. This post isn’t about business failure stats but rather the reasons why new businesses fail.

Hopefully you are now more upbeat about launching your business venture. Don’t let your optimism cloud prudence though. Here are some reasons why your startup could make the annual damned 25% list:

1. Your motivations for entrepreneurship are misguided

To succeed in an entrepreneurial career you have to be pragmatic right from the get-go. In addition to having a passion for what you intend to do, your reasons for starting a business should be based on a practical foundation. Your startup must be focused on providing a practical solution for an identified need in the market.

Business failure is a harsh reality...

Business failure is a harsh reality…

If your reasons for starting a business are to make more money, escape the 9-to-5 lifestyle and be answerable to yourself only, etc, you clearly need to rethink things. These are the perks of a successful entrepreneurial lifestyle and they don’t come easy. In entrepreneurship things typically get worse before they get better.

2. Lack of a unique value proposition and innovativeness

Deciding to offer a product/service that virtually everyone else is providing and doing this in the exact same way is really business suicide. Naturally you will have to contend with poor revenues month after month. The probability of making real progress is virtually zero – how can this happen when you are barely able to make enough?

Many businesses offer the same products/services but the most successful among them are the ones that do this in a unique way. Think about your business – what can you do to set it apart from the rest? Once you find the answer make sure that this uniqueness is well communicated to the target market.

3. Ignoring customers feedback

One adage that you must never forget as a business owner is that the customer is always right. The reason is simple – without customers your business is useless. Engaging with your customers therefore will give you a firsthand opportunity to learn about those things they feel will make their buying experience better. Customers feedback, whether offline or online, will give you hints about what to improve on with regards to your product/service, business practices, pricing, etc. Ignore feedback at your peril – when customers decide to ignore you back the failure list could be where you are headed.

Ignoring customers feedback is the one-way street to business oblivion...

Ignoring customers feedback is the one-way street to business oblivion…

4. Incompetent management

Being the owner of a new small business often means that you are in charge of just about every aspect of running the enterprise. You are therefore supposed to handle or oversee the critical roles of production, sales, purchasing, finance, marketing, customer relations, hiring and managing staff, etc. Don’t forget that you are the custodian of the company’s mission and vision – in charge of providing direction and strategically steering the company forward.

Business success depends on how well an entrepreneur handles the managerial role...

Business success depends on how well an entrepreneur handles the managerial role…

The characteristic volatility of the workplace and marketplace ensures that no two days are the same. To be successful as a manager therefore you must learn how to be proactive and to stay on top of things. Indecision, neglect, lethargy and other qualities of this ilk are the hallmarks of a poor and dysfunctional leader.

5. Insufficient capital and poor cash flow

One very significant reason why many startups fail is the lack of sufficient funding. Before launching a business you must ensure that you have enough funds to cater for startup costs and to support operations until the venture becomes self-supporting. Clearly one needs to be realistic. Businesses do take some time to get going. Having enough funds to cater for operational expenses for a year or two is advisable in order to give the business ample opportunity to establish itself in the market.

6. Financial mismanagement

Failing to properly account for business money is a sure path to early failure. From a financial perspective, effectively running a business means that you’ve got a grip on cash flow, expenses, taxes, employee salaries and benefits, etc. Many business owners opt to delegate this aspect of running a business to accountants or bookkeepers out of sheer reluctance to learn the basics of money management. Opt to not be ignorant. At the very least you should be able to understand simple financial documentation including a balance sheet, P&L statement account and a cash flow statement.

7. Poor location

Even the best funded and managed startup will find it difficult to survive and thrive if the location is wanting.

Consider the spot where you intend to open shop. Is it easily accessible for your target customers and suppliers? Is it secure? Are all the necessary amenities provided? Is the local community receptive or hostile to new businesses? Is the cost running the business from there manageable? Would it be wiser to relocate to a cheaper neighborhood?

An unsuitable location does your business a major disservice

Are you sure that your business’ location can’t be better?

8. Failure to adapt to market changes

The marketplace is typically dynamic – never static. Your initial business model may be working wonderfully for now but moving forward you’ll need to adapt to the changes in the marketplace in order to remain relevant. Many a business owner has opted to adamantly maintain status quo in the face of changing times only to make a belated realization that in the business world it is “adapt or die”.

9. Ineffective marketing

It’s no good to have a superb product or service if no one knows about it. If they don’t know about it they won’t buy it and if they don’t buy it you’ll be out of business. Marketing is therefore imperative for business success.

Marketing doesn’t have to be all complicated and expensive. Depending on what you are offering you definitely have several cost-effective options to consider starting with word-of-mouth which is absolutely free. How about using social media to spread the word even further?

10. Overambitious expansion

Upon achieving early business success many entrepreneurs erroneously embark on an expansion spree without adequately thinking about whether the move could be premature. The reasons for success vary and could indeed be temporal. For this reason, steady business growth is most advisable. Expansion efforts should be based on well observed and deliberated business realities as well as marketplace trends and opportunities. Steady growth will allow you ample time to secure the required systems and people that will give the new addition to your business a fair shot at success.

11. Hiring the wrong team

Successful entrepreneurs will tell you that nothing quite beats having a good team. Your staff should be individuals who are equally motivated to succeed and see the business grow and go places. It is therefore important for you to hire people who can talk and walk the part. Getting such people won’t be easy but once you find them make sure that they have a good reason to stay.

Hiring a dysfunctional team is catastrophic for business sucess

Hiring a dysfunctional team is catastrophic for business success

12. Lack of a website or any online presence

The number of people with Internet access globally is at an all-time high and continues to rise by the day. As such, conventional methods of conducting business searches are being tossed aside in favor of online convenience. The lack of an online presence is therefore counter-effective for a modern-day business. Even though your business doesn’t sell goods/services online it is of utmost importance that people know about its existence. The site must of course be presentable enough so as not to put off potential customers.

It's of the essence to ensure that your small business has an online presence

It’s of the essence to ensure that your small business has an online presence

The least you should do in case you don’t have a website is become part of the social media conversation. Starting a company Twitter or Facebook account is a more than sufficient way to guarantee your business’ visibility and relevance.

13. Underestimating the competition

For a new business, gaining customer loyalty is quite akin to wooing a beautiful lady – the loyalty has to be earned, and the suitors are plentiful. As such, you cannot afford to take your customers for granted assuming that they’ll always come back for more. Remember that the competition is eyeing the same target market; up the game best and the customers will come in droves, remain mediocre and stare failure in the face.

14. The belief that you can do it all

However high your motivation and energy levels are it will be foolhardy for you to believe that you can alone deliver success for your business. It’s prudent therefore to seek advice from persons with longer and better experience about how best various aspects of business operations can be handled. Delegating tasks to capable staff is equally vital.

Why risk burnout and the failure of your business when all you have to do is ask for a little help?

Why risk burnout and the failure of your business when all you have to do is ask for a little help?

15. Unwillingness to take responsibility

As the business owner you must be willing to admit and own your mistakes without exception. Apportioning blame to others or to circumstances will only briefly soothe the ego but the realities of the situation will still need to be addressed. Running a small business successfully is about the ability to remain objective and goals-oriented.

Hope springs eternal though. Things may be really grim for your business venture right now but hopefully it isn’t too late for you to turn things around. It’s not going to be easy but if you are committed to the cause your entrepreneurial dream need not be added to the “crashed and burnt” list. Here are some tips for how you can turn around the fortunes of your business for the better.

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During an economic downturn or recession like the one we experienced a few years ago our survival instincts urge us to cut down on spending. This in turn impacts negatively on business owners, some to a greater extent than others. Those businesses that somehow keep thriving during such times can be described as being recession-proof.

While there are some obvious examples, looking at the situation from another perspective can help you to identify even more ideas for your startup.

Think about the new lifestyle changes that people adopt in order to cope with salary cuts, loss of employment, change of work status from full-time employee to independent contractor, and so on.

Generally, there are four traits that can help you to identify a recession-proof job or business idea.

  • A business that provides essential/critical products and services – Here you can think about healthcare provision, pharmaceuticals, education and tuition, plumbing services, etc.
  • A business that is clearly positioned – Here the focus is on businesses that have a strong competitive edge over others in their industry niche. Such competitive edges may be based on effective pricing, excellent customer service, superior expertise, etc.
  • A business that keeps abreast with technological and social trends – The most obvious of such businesses are the ones that provide IT solutions, communications and access services, etc.
  • Businesses that will always sell despite the economy – Such businesses don’t really feel the pinch because what they offer is essential. Restaurants, liquor stores, debt collectors, and the like, fall into this category.

Now therefore, what are some of the recession-proof business ideas you can start making money with?

NB: For some of these business ideas selling online is now the way to go; here are some handy tips about how to go about doing this.

1. Internet marketing

Thanks to the internet, virtually every product and service you require is just several clicks away.

Thanks to the internet, virtually every product and service you require is just several clicks away.

Thanks to widespread and ever-increasing internet accessibility, more and more business opportunities suited for solopreneurs aka webpreneurs are being created. Reading the profiles of some of the blogging industry’s most iconic names you might be surprised to know what these guys were doing before they became big.

Before getting started you’ll want to get acquainted with web traffic optimization. You can then proceed to earn money by doing what you love, say running a fashion advice blog or offering content writing services. There are indeed a slew of jobs available online for freelance specialists and you can make good money offering some of these in-demand services.

2. Food and beverages

People will always appreciate the taste of a fine meal regardless of the times.

People will always appreciate the taste of a fine meal regardless of the times.

Not surprisingly, people kept eating and drink during the recession years…hey, was there an option?

Nevertheless, your decision to start an eatery must be carefully conceived and implemented. After all, just like in any other business, there are plenty of risks to consider.

Making your restaurant’s theme a fit for today’s healthy lifestyles may be a good place to start. A restaurant that promotes healthy eating can do well in recession times because people will identify with the need to reduce consumption, stay healthy, and cut down on unimportant purchases. The “stay healthy” theme will also work well for a restaurant that serves organic food products or another that targets vegetarians.

If you don’t fancy running a restaurant then you might as well consider starting a food catering business.

3. Selling cosmetics

Ladies have and will always want to look beautiful.

Ladies will always want to look amazing.

Regardless of the poor state of the economy you can bet that every lady will always try her best to look gorgeous. A man will grumble and mumble about how unnecessary spending on beauty products is but the mere memory of how beautiful the woman he loves looked during an unforgettable date will be enough reason to make his thin wallet a tad poorer.

The impressive sales volumes of nail polish and mascara in recession-hit 2009 is an apt example of a cosmetic business’ viability.

4. Providing laundry services

Our need for clean clothes is really second nature.

Our need for clean clothes is really second nature.

To avoid looking shabby and unkempt people will always want to wear clean clothes. This is why starting a laundry business is an idea that makes so much sense and cents. It’s hardly complicated. You just need washing machines, dryers, pressing irons, detergent, a good team and effective word-of-mouth advertising.

5. Candy store business

M&Ms were first sold in 1941...

M&Ms were first sold in 1941…

Thanks to the Great Depression of the 1930s we now enjoy tasty treats like Snickers and Three Musketeers. Somehow, our liking for candy surges during economic recessions. Not surprisingly, Nestle and Cadbury reported 11% and 30% profit rises respectively in 2008.

6. Alternative healthcare services

There are plenty of business opportunities in the health sector - even for entrepreneurs who don't have a medical background.

There are plenty of business opportunities in the health sector – even for entrepreneurs who don’t have a medical background.

People interested in the healthcare business but lacking the requisite credentials to offer primary healthcare services, say opening a general medicine practice, can still make good money in alternative healthcare.

There are plenty of other options too. How about designing healthcare software, supplying medical equipment to practices, repairing and maintaining medical equipment, etc?

7. Provision of wedding services

A catalog of different wedding services jointly help to make such a day brilliant and memorable.

A catalog of different wedding services jointly help to make such a day brilliant and memorable.

However gloomy the times are, a nicely organized wedding will always help to ease people’s worries, albeit for several days.

The scope of business ideas in this niche is quite varied. You can think about becoming a wedding and honeymoon planner, offering wedding photography and video recording services, designing customized wedding invitation materials, designing bride and bridal party gowns, offering wedding catering services, etc.

8. Selling baby products

Perhaps it needs a fresh diaper or medical attention...new babies bring new business.

Perhaps it needs a fresh diaper or medical attention…new babies bring new business.

Babies will always be born; baby products will therefore always be in demand. Whether you decide to sell baby wear, toys and gear, baby products like oils and powders, etc, the potential for profitability will always exist.

You can also opt to offer allied services like babysitting (and daycare services later on).

9. Running a funeral parlor or offering funeral-related services

The entire process of laying the dead to rest ensures that several entrepreneurs will get paid.

The entire process of laying the dead to rest ensures that several entrepreneurs will get paid.

Successful undertakers are a unique breed. For them special days like holidays and anniversaries don’t really exist. Why, you ask. It’s quite simple.

Everyday people are always dealing with the demise of family members and friends. As the proprietor of a funeral parlor you will need to respond to the requirements of bereaved people day and night and get the job done; all this while maintaining the desired quality of service and empathy. Providing this service definitely makes for a viable idea – the industry was worth $15.9 billion in 2013.

Apart from being an undertaker, there’s also money to be made in funeral-associated jobs including providing cremation services, making caskets and coffins, designing epitaphic tombstones, etc.

10. Selling beer, wine and liquor

During happy or depressing times you can always expect bars and pubs to enjoy good business.

During happy or depressing times you can always expect bars and pubs to enjoy good business.

Don’t expect people to stop drinking when times get tough. They’ll simply ignore the pricier options and guzzle down the affordable stuff.

During the recession some interesting observations were made in support of this stance. In 2009 bar revenues and restaurant sales of wine by the bottle dipped drastically. Nevertheless, wholesalers of beer, wine and liquor enjoyed good business. Restaurants also saw a rise in sales of wine by the glass.

11. Property staging

Can you make a house look worth its price tag? Real estate agents and house sellers will readily pay for your expertise.

Can you make a house look worth its price tag? Real estate agents and house sellers will readily pay for your expertise.

The work of a property stager is to ensure that a house which is to be sold off looks the part. Basically, you, as a property stager, need to advice the seller on how best the things in the property must be arranged and presented in order to maximize the likelihood of making a good sale.

For starters, you need to have a keen sense for style, décor and detail. Next, you need to make a name for yourself. Making acquaintances with real estate agents and independent sellers is a good place to start.

This business can really thrive in recession times. We can all recall the many property sales that characterized the aftermath of the property market’s fluctuation.

12. Virtual assistance

Reputable virtual assistants are almost always in demand all year round.

Reputable virtual assistants are almost always in demand all year round.

Becoming a virtual assistant is yet another viable business idea that has resulted from increased internet access. This will be a worthwhile option for you if competent administration and organizational acumen are your forte.

Opportunities abound for such persons considering that many companies, in a bid to cut down on operational costs, are retrenching conventional assistants and instead outsourcing the position to qualified persons around the world.

If you are one of those who have been retrenched then making the switch shouldn’t be too hard. After working with several clients you may even think of training and then hiring others with the aim of expanding your business.

13. Tutoring and coaching

Skills are passed down successive generations hence the need for tutors and coaches services.

Skills are passed down successive generations hence the need for tutors and coaches services.

This is especially applicable for people who excel at teaching or instructing others, be it in academia or other skills e.g. playing the piano. If you also can coach/train players in soccer, tennis, baseball, or indeed any other sport, there is money to be made by turning your skills into a business. Despite poor economic times learning, music, acting and sports always thrive.

14. Pet care services

Pet lovers don't hesitate to spend good money on excellent pet care service providers.

Pet lovers don’t hesitate to spend good money on excellent pet care service providers.

The love that people have for their pets doesn’t wane even when the times get tough. The reason is simple – for many people, having a pet helps to soothe them through hard times. Accordingly, pet care service providers enjoyed soaring business during the recession years. Additionally, the low cost of business setup was a boon for service providers, as was the large target market – estimated at 62% of Americans.

Veterinary service providers also enjoy good business from pet owners. Industry estimates for 2014 put the figures at $15.3 billion.

15. Tax accounting

Expert accounting services are especially sought after during lean times because business owners are keener to save more money.

Expert accounting services are especially sought after during lean times because business owners are keener to save more money.

You’d be wrong to assume that during recession business owners’ start doing their own bookkeeping in an attempt to lower operational costs.

It was business as usual for tax accountants during the recent economic slump. The reason is quite interesting – business owners were keen to get maximum refunds while avoiding any errors that would prove costly.

16. Thrift stores

Flea markets and thrift stores will always exist because we all love a good bargain.

Flea markets and thrift stores will always exist because we all love a good bargain.

People will carry on shopping during an economic recession but instead of doing it at elite shops like Nordstrom they will opt for thrift stores.

The numbers tell the story. In 2008 just 14% of Americans shopped at thrift stores on a regular basis; this rose to 20% in 2012. The country’s premier thrift store company, Goodwill, reported a 10% rise in sales volumes annually between 2007 and 2011.

So, do you have a passion for selling secondhand goods at affordable prices? Why not set up now? You may be just in time for the next recession – they do say we expect one roughly every six years, right?

17. Security services

The need to feel safe and secure always necessitates the hiring of security personnel.

The need to feel safe and secure always necessitates the hiring of security personnel.

When times get tough many people become desperate and frustrated. Eager to make quick bucks, many people resort to various forms of crime. Burglary is especially prevalent in these circumstances.

In response to the threats posed by perpetrators of the vice, homeowners and proprietors of valuable establishments, commercial or otherwise, hire the services of security firms. Of course, these services are always in demand even when the economy is thriving.

18. Garbage and/or waste collection

Without garbage collection services our homes, offices and streets would be a mess.

Without garbage collection services our homes, offices and streets would be a mess.

Keeping your house free of garbage and waste remains a priority every day of the year. This is therefore a business idea you can implement – if you don’t mind the dirt, variety of unpleasant aromas, and the typical low regard many people have for this job. No worry, no one will look down on a garbage collection firm millionaire CEO.

19. The sale of contraceptives

To enjoy safe sex people will always need pills and condoms...

To enjoy safe sex people will always need pills and condoms…

Having sex is a natural urge that must be fulfilled. Procreation is not always the agenda though. For this reason people will always purchase contraceptives, be they couples, young adults or teenagers. As the owner of such a business an economic recession will be the least of your worries.

20. Repair services provision

The constant need for repair services at home, in the office, etc, means that handymen will always be in demand.

The constant need for repair services at home, in the office, etc, means that handymen will always be in demand.

Whatever the economy looks like there will always be business opportunities for repair experts. However much you hold off on having your broken window panes replaced, your leaking roof re-tiled, your car’s gearbox replaced, or your blocked pipes and/or sinks unclogged, you’ll eventually have to pay someone to make things right.

If you have the training, skills and equipment required for offering repair services in or more niches you might as well set up shop now. Using word-of-mouth you should soon get a few clients; make a good reputation by offering top-notch services and then keep growing.

There are lots of other recession-proof ideas. How about some suggestions from you?

There's a lot to think about before starting a business. Success will require entrepreneurial prudence.

There’s a lot to think about before starting a business. Success will require entrepreneurial prudence.

In the planning and starting-up of a business enterprise a novice entrepreneur will certainly have to contend with multiple tasks and problems.

With respect to these realities it is worth appreciating the usefulness of having a checklist in helping the individual to cover most, if not all, of the variables that are involved in starting a business. With such a checklist you will be able to address two main concerns i.e.

  • Evaluating your preparedness in terms of starting the planned venture and
  • Ensuring that you get off to a great start once you launch the business

The following are some of the most crucial questions that you must find answers to as a prospective entrepreneur:

1. How is your reaction to business opportunities like?

Successful entrepreneurs are known to react quickly to seize business opportunities whenever they arise. These reactions require a good measure of instinct since pursuing such opportunities does entail some form of risk-taking.

Like successful hunters, successful entrepreneurs make the most of opportunity...

Like successful hunters, successful entrepreneurs make the most of opportunity…

Poor business people, on the other hand, are known for their procrastination which results in missed opportunities and general poor business performance.

In this regard, would you describe yourself as proactive or reactive?

2. How good is your management of energy and time?

The old adage “Time is money” holds true for any entrepreneurship activity. Ideally, you should be one who is willing to commit energy and time to activities that will profit your business venture.

Building your business successfully will require lots of time and effort - it's going to be hard work...

Building your business successfully will require lots of time and effort – it’s going to be hard work…

The start-up stage is extremely crucial. Creating a successful business from the ground up will require 101% of your involvement, no compromise.

Are you ready for self-sacrifice?

3. How prepared are you in terms of saving money, making business contacts, and learning / training about your prospective business engagement?

Most of the successful entrepreneurs we know are people who had taken time to get prepared financially, mentally, and emotionally, for the task ahead. Prior to starting a business you must fully understand what the decision implies – it is a process that will require you to be wholly committed to the cause.

Start from the bottom and build upwards with the work-ethic of termites...

Entrepreneurs start from the bottom and build upwards with the work-ethic of termites…

Think about how termites build their nests. Individual grains of earth are gradually pieced together and the result is an imposing structure so rigid and strong. Likewise, you will need to prepare a solid foundation upon which to grow.

4. How well or how badly do you take discouragement or failure?

Successful entrepreneurs are those who have thoroughly understood that both discouragement and failures are realities in the business world. They are however pragmatic and work hard to make their business ventures successful. While being persistent in their efforts they also don’t over commit themselves and their resources to an extent that initial failures will ground them for good.

You might be tempted to quit - but this shouldn't be an option for you...

You might be tempted to quit – but this shouldn’t be an option for you…

Are you ready to be persistent or will you quit as soon as things start going wrong? What will you do if customers don’t show up as anticipated?

5. Do you have a competent adviser or team of advisers?

Prudent entrepreneurs seek the advice of seasoned business people in different lines of enterprise. They do so in order to have their ideas vetted before they embark on them. Doing so has spared many novice entrepreneurs undue financial and psychological hurt.

Having a good advice and support team is definitely vital in the early stages...

Having a good advice and support team is definitely vital in the early stages…

There’s no substitute for experience, and a problem shared is a problem solved.

Do you have a group of persons that you can consult with moving forward?

6. Have you established that the demand for your products and services actually exists?

This holds more so for innovative ideas. Talking to people about the idea may give some form of encouragement but the crucial consideration is ideally whether the intended product or service will actually be bought and become profitable.

Eureka! But is there market demand for your product?

Eureka! But is there market demand for your product?

Have you studied the marketplace and confirmed that there’s indeed a demand for what you plan to start selling? What similar solutions already exist? How does your solution stand out from the rest?

7. Have you established the financial implications required in starting up?

It is important to have a clear picture of what your business’ start-up costs are. Additionally, you’ll need to factor in money estimates that will help the business run well for at least six months after its inception.

Starting, running and sustaining your business will need money...

Starting, running and sustaining your business will need money…

8. Do you have enough to go on for at least a year?

Apart from the start-up and operating costs highlighted in point 7 above you must have a sufficient income or savings to maintain your upkeep for at least a year. This is so whether or not you have a family to support. These monies should be sufficient until a point where the business venture starts earning you a good income.

9. Do you have any external sources of funding in mind?

Sometimes it so happens that individual savings are exhausted before a business takes off. It is therefore prudent that you have reliable sources of potential financing backup in case such a scenario arises. How well prepared are you for such an eventuality?

10. What form of business organization do you have in mind?

There are quite a number of business forms that you can create including a sole proprietorship or a partnership.

Will yours be a sole-proprietorship where everything depends on you?

Will yours be a sole-proprietorship where everything depends on you?

All these forms have different implications and you are well advised to clearly understand these before you settle for any. A lawyer’s advice may come in handy here.

11. How do you plan to maintain your records?

Successful entrepreneurs have an efficient system of knowing what their incomes and expenses are, and how much their businesses owe or are owed. Such a system need not be complicated in design – it just has to serve the purpose.

Proper record-keeping will ensure that information about your business is always readily accessible...

Proper record-keeping will ensure that information about your business is always readily accessible…

Record keeping is an integral part of any successful business. Effective accounting will only become possible if there are accurate records to start with.

Is the record-keeping system you have in mind going to be appropriate for your type of business?

12. Will the venture need personnel?

Entrepreneurs whose businesses have to hire personnel understand the importance of having a skilled team. Prior to establishing your business you must first ascertain that the kind of people you need exist and that you can afford to pay them.

What type and number of employees will your business require?

What type and number of employees will your business require?

Where will you find the sort of personnel you require? Will you need full-time employees or will freelancers be appropriate?

13. How will your pricing be organized?

It needs to be clear from the onset that a correct pricing of your products and services is of the essence. Basically, successful entrepreneurs set prices that will help them cover all their production expenses as well as earn them a viable profit.

Product price has to reflect the production costs incurred and the expected profit margin

Product price has to reflect the production costs incurred and the expected profit margin

What considerations have you weighed in arriving at your proposed price? Will the revenues you’ll earn as a result of selling at this price be adequate to sustain the business?

14. How soon can the initial investment be recouped?

One aspect of successful businesses is such that they are able to recover their costs of investment in a reasonable time-frame. Such costs include items like machines and equipment, any construction and design work, etc., and they are recovered from the profits the business earns.

From your own estimations, how soon do you think this will take?

15. Does your business satisfy the legal requirements?

Successful entrepreneurs make a thorough background research into all legal aspects that are required for their ventures to operate within the law. You should therefore identify all the permits and licenses that you should secure before starting off.

Eventually, running an unlawful or illegal business is not worth the entrepreneurial effort...

Eventually, running an unlawful or illegal business is not worth the entrepreneurial effort…

Will you be operating within the law when you open your doors for business?

This checklist is neither conclusive nor does it suffice for every type of business. It however offers a general idea of what prospective entrepreneurs must bear in mind if they intend to be successful at the nascent stage of their business ventures.

Counterfeiters are so good nowadays, it's almost impossible to distinguish between originals and imitations...

Counterfeiters are so good nowadays, it’s almost impossible to distinguish between originals and imitations…

Counterfeit goods are also known as imitations. They are products that are manufactured and sold under another company’s name and without permission from that company. Today, the counterfeiting problem affects virtually every industry. Commonly counterfeited goods include car parts, electronics, personal care products, handbags and wallets, computers, shoes, jewelry and clothes. There are even imitations for medication.

Counterfeiting is big business around the world. It is estimated that $700 billion worth of fake merchandise is produced every year. Losses incurred in the U.S. as a result of counterfeit trading are estimated at $1 trillion annually and in excess of 75000 jobs. The Organization for Economic Co-operation and Development (OECD) has estimated that counterfeit trading may cost the global economy as much as $250 billion every year.

Closely associated with counterfeiting are two similarly despicable practices – tampering and diversion. Tampering involves altering of product ingredients. The consequences can be lethal. In 1990, for instance, 89 children in Haiti died after ingesting pharmaceuticals laced with antifreeze.  Diversion, on the other hand, involves the selling of a manufacturer’s product via an unauthorized seller or channel.

What risks does counterfeit trading pose for your business?

Well, in addition to lost revenues, counterfeits can potentially ruin your business’ reputation and erode its goodwill.

So, what are the various techniques that you can employ to fight the counterfeiting menace?

1. Registering your trademarks

Federal trademark registration is a vital aspect of brand protection. Doing this will enable you to enforce your trademark anywhere around the country. You will also get access to federal courts. You should also ensure that your trademark is registered in all countries where you do business. Foreign registration can assist in stopping the exportation of counterfeits that bear your trademarks.

Registering your intellectual property will help you to enforce anti-counterfeiting measures legally

Registering your intellectual property will help you to enforce anti-counterfeiting measures legally

2. Registering your trademarks with customs agencies

Your trademarks should also be registered with customs agencies, both locally and in countries where you do business. The U.S. Department of Customs and Border Protection (CBP) runs the Intellectual Property Rights (IPR) Enforcement program tasked with preventing the inflow of counterfeit merchandise into the country. Based on the information you have provided, the CBP will be able to curb the trade of counterfeits as it carries out its shipment monitoring mandate.

3. Investigating the market

As a proactive business owner you should regularly monitor the market to ascertain that what is being sold as your merchandise is actually genuine. Regardless of where you sell your products, online or through brick-and-mortar retailers, three factors should be able to inform your curiosity: price, packaging, and location.

You should regularly scour the market to see if imitations of your brands are being sold

You should regularly scour the market to see if imitations of your brands are being sold

Don’t hesitate to take immediate enforcement action in the event that counterfeit goods are found. Pursuing civil litigation will send out a strong deterring message to other potential sellers of counterfeits.

The following are some of the legal measures and settlements you (the plaintiff) can demand of a person (the defendant) caught selling imitations bearing your trademark:

  • Monetary compensation
  • A recall of the counterfeits sold
  • Ongoing audits of the defendant’s inventory and records
  • A permanent injunction preventing the defendant from importing and selling imitations

To practically distinguish your products from counterfeiters’ merchandise you can employ the following technological defenses:

4. Placing brand-specific patterns on clothing

The use of a partially invisible thread to produce brand-specific patterns on fabrics can help clothing manufacturers to identify and nab counterfeits. The thread used for this purpose is produced cheaply but is not easily reproduced. The customized patterns made with the thread are only visible under special lighting.

5. Using iridescent security images

Courtesy of Nanotech Security it is now possible to emboss a security image of your choice on your merchandise. This image can be applied on a variety of surfaces, ranging from metals to fabrics. This anti-counterfeiting measure will set you back a few pennies per unit. For counterfeiters, however, replicating your security image will be quite impossible.

6. Adding pigments to plastics

You can also opt to include custom additives or pigments in the plastics that your company produces or uses. Being specific to your company, these additives, and which can easily be identified with the help of a handheld device, will help to separate genuine merchandise from market imitations.

7. Using the uFaker app

With the help of the uFaker app you can be able to monitor counterfeiting activities that involve your brand. This information can then be forwarded to law enforcement agencies, private investigators and lawyers.

8. Using the Authenticateit app

You can use the Authenticateit smartphone app to identify, track and deter counterfeiters from selling imitations. Consumers can use the same app to ascertain the authenticity of a product prior to making purchase.

9. Using the Black Market Billions app

Yet another useful solution is the Black Market Billions crowdsourcing app. Users use the app to take photos of possible imitations and upload the images to an online map linked to a GPS locator. Alerts are then sent to consumers of counterfeited merchandise in specific locations.

10. Consumer education

Providing consumers with information about your product will help them to make informed purchases and effectively protect them from the risks of using imitations.

Effective education will help consumers to identify and buy original merchandise

Effective education will help consumers to identify and buy original merchandise

You can use various websites to share information about your product and where genuine merchandise can be purchased. These sites include:

DesignsFauxReal – A website that sells fictitious counterfeit goods. It educates consumers about the negative consequences of purchasing imitations.

The Counterfeit Report – A website through which manufacturers pass information about counterfeits to consumers. Consumers are encouraged to report counterfeits.

Unreal Campaign – This teen-focused website teaches young people about the economic, health and social risks that result from using counterfeits.

A business that offers diverse products/services is almost always doing business

A business that offers diverse products/services is almost always doing business

After successfully steering your small business from existence and through survival, you are now at the success stage. It is now beyond doubt that your business idea was a winner right from inception –the naysayers are now eating lots of humble pie.

You are now thinking about the next stage of growth for your business enterprise and are considering two options:

  1. Whether you should grow the current business to the next level OR
  2. Whether you should venture out in a new direction while using the current business as your support.

If no.2 is what’s on your mind then you are basically planning to diversify your business.

Business diversification does make a lot of sense. After all, we all concur with the old adage “Don’t put all your eggs in one basket”.

Like for many other critical business decisions, you need to approach and implement diversification from an informed point of view. Whatever the proposed implementation will involve, there is a single rule: Your core business should remain as it is.

Why does diversification make so much business sense today?

The need to always expect the unexpected can hardly be overstated.

However much your business may be thriving currently, there is always need to ask “what if”.

Business diversification will in this context help you to:

1. Avoid becoming too dependent on a single customer

There are many small (and large) businesses whose entire operations are based on serving a single very profitable customer. Things are typically very smooth for as long as this symbiotic business relationship exists, so much so that these business hardly see the need to source for other clients.

What will you do if your only client is suddenly no longer available for business?

What will you do if your only client is suddenly no longer available for business?

If your business fits this description you need to start imagining what would happen if for some reason your client is no longer available for business. You would definitely need to find other clients, the failure of which would likely compel you to wind down your operations.

Start making hay while the sun shines. Seek out alternative clients or make sure that substantial sums of your income are being saved for the proverbial rainy day.

2. Avoid becoming too dependent on a single supplier

Similar to having a single customer, there are many positives that come with having a single supplier, more so when the business relationship is mutually beneficial. Likewise, the negatives of such a relationship can have a crippling effect on your business.

What will happen if the only source of your raw material is shut down?

What will happen if the only source of your raw material is shut down?

What happens if your supplier can no longer provide the raw material you need for production? In case you can’t find an alternative supplier you’ll have no choice but to halt operations and think about introducing a new product altogether.

3. Ensure you have multiple revenue streams

Ideally, if ¾ of your current business revenue is generated by a single product/service, you should start thinking about additional revenue streams.

Why, you ask?

Well, if your cash cow takes a hit, your revenues will most likely dip severely, at least in the short-term. In the worst case scenario you may have to start an entirely new business.

Multiple sources of income will add more stability to your business...

Multiple sources of income will add more stability to your business…

Diversification in this case can be done through the introduction of new products/services that are complementary to your cash cow. For example, if you run a bread bakery, you may want to introduce alternatives like cakes, cupcakes, buns, donuts, etc.

Doing this will also help you to have an extra edge on the competition.

4. Avoid depending on a single distribution channel

If your business has just a single way of getting things to the marketplace, or a single way of making sales, you need to start thinking fast. What will happen if your current distributor is suddenly acquired? What if your door-to-door sales technique is blacklisted by the government in the wake of terror threats?

What if the authorities start enforcing this ban strictly?

What if the authorities start enforcing this ban strictly?

In both scenarios it is likely that a completely new approach will have to be thought up and implemented. Knowing just how much time such new approaches may require before becoming effective (if ever) these are scenarios you don’t want for your small business.

What are the motivations for small business diversification?

5. The need to reduce financial risk

Some of these will most likely break or crack...

Some of these will most likely break or crack…

Many business owners resort to diversification in order to secure their financial assets.

Borrowing from “Don’t put all your eggs in one basket” you may find it prudent to put your money into different investments. This is done in the hope that should some investments flop, others will thrive.

6. The need to harness new market opportunities 

If your idea feels viable then go ahead and test it...who knows what may come of it?

If your idea feels viable then go ahead and test it…who knows what may come of it?

Every once in a while you may discover a market opportunity that you feel is potentially profitable and therefore worth exploring. Whether or not this proves worthwhile, your focus should always be on your core business. Ensure that the distractions of your new pursuit won’t result in the demise of your primary source of revenue.

7. To create more appeal amongst current and potential customers

Business diversification results in customer base diversification.

Introducing new products/services into your business portfolio will firstly allow you to earn more revenue from additional sales to your current clientele. Secondly, the new products/services will help you to break into a new market segment thus adding to your overall customer base.

Expanding on an original idea will most likely make your business more relevant to your target market...

Expanding on an original idea will most likely make your business more relevant to your target market…

There is immense risk in undertaking such diversification; a sober-minded approach is required considering that a new product/service may either do well or flop. In case it flops you will have to contend with the effects of losing substantial cash flow.

8. To improve your business’ profile and appeal for potential buyers

A diversified business makes for a more valuable proposition for potential buyers

A diversified business makes for a more valuable proposition for potential buyers

Perhaps you are considering selling off your business at some point in the future. Businesses that have diversified portfolios tend to have an edge with regards to potential buyers. Such buyers would love to know that their financial risk will be spread out across multiple market segments. You will therefore have additional bargaining clout when a buyout arrangement materializes.

What should you consider before embarking on business diversification?

9. Ensure that your new product/service has a value proposition for the customer

How about this for a new business idea?

How about this for a new business idea?

Your diversification efforts are guaranteed to achieve success if customers perceive the new product/service you are offering to be relevant and valuable. Creating a new product/service that customers need to use very regularly is a good way to approach diversification.

10. Have expertise in your proposed area of diversification

Success will also be guaranteed if you have the expertise and know-how required for providing the new product/service. Ensure that the relevant systems and personnel required to deliver your new product/service to customers are in place.

Your new business direction should also be a fit with your overall business model thereby ensuring that you won’t be entering into completely uncharted territory. This way it will be easier for you to penetrate and expand within the new market segment.

Diversification tends to be more successful if the entrepreneur is knowledgeable about the proposed idea...

Diversification tends to be more successful if the entrepreneur is knowledgeable about the proposed idea…

11. Leverage on your business’ strengths

If you are thinking about diversification it means that you already have a successful business model in place. Using this as the scaffolding for your next stage of business growth will make it easier to explore and implement the new ideas you have in mind. Of course you must be thoroughly knowledgeable about the ins and outs of the proposed business field.

12. Find the right people for the job

You must ensure that you have a competent team in place before you implement the proposed transition. You’ll most likely be required to hire personnel that have the required skills, as well as train the current team to ensure that everyone is on board with the new direction the business will be taking.

Introducing a new offering may require you to engage a skilled team - ensure that everyone is competent

Introducing a new offering may require you to engage a skilled team – ensure that everyone is competent

Creating passion about the new direction amongst your employees is guaranteed to make implementation far much easier and more successful.

What types of diversification can you consider for your current product/service?

13. Adaptation

This will involve tweaking and/or adjusting your product/service so that it can become useful to a new type of clients.

The same product or service can be adapted to suit new and different types of clients

The same product or service can be adapted to suit new and different types of clients

For example, if you create top-notch premium-priced anti-virus software you may think of introducing two new versions of the software, say basic and advanced, that will cost cheaper and attract two new categories of consumers. This is an example of a diversified sales strategy.

14. Introducing complementary products/services

Here you will be introducing a new line of product/service that is related to what you offer, but that your customers currently have to purchase from a different vendor or competitor.

For example, if you manufacture pencils, you may decide to introduce erasers and pencil sharpeners. This is an example of related and/or concentric diversification.

You can diversify your business by offering a portfolio of related products or services...

You can diversify your business by offering a portfolio of related products or services…

Some of these approaches may require you to purchase a company that produces the sort of product/service you wish to introduce. This typically results in a diversified business portfolio and the elimination of a potential competitor from the market.

15. Introducing an integrated product/service lineup

Quite similar to the previous strategy, this is about finding out what more your business can offer the market with regards to its current offerings. The pencil manufacturer can think about adding color pencils, crayons, ballpoint pens and fountain pens to its product portfolio. This is an example of horizontal diversification.

...or by offering an integrated portfolio of products or services

…or by offering an integrated portfolio of products or services

16. Strategic partnerships

It may be the case that there are viable opportunities to be accrued by partnering with another company that is related to but not directly competing with your business. The pencil manufacturer can perhaps partner with a stationery manufacturer resulting in a win-win alliance.

This is an example of unrelated and/or conglomerate diversification.

17. Anticipating future market requirements

The last thing you would want for your business is to be rendered obscure as a result of failing to keep up with industry advancements. As a proactive business owner you always want to be among the ‘early adopters’ as this will allow you to earn significant returns on investment before the rest of the market catches up.

18. Launching new stores

This is the conventional way of reaching more of your target customers. You can invest in opening a new store/s in another town(s) or state(s). This is described as geographical diversification.

It doesn’t have to stop there. Venturing to neighboring countries and other continents is a possibility you can pursue in future.

Establishing new stores and venturing into e-commerce is an effective way to reach more of your target customers

Establishing new stores and venturing into e-commerce is an effective way to reach more of your target customers

19. Embracing e-commerce

The online marketplace is where the big players are doing splendid business. Make a point of taking your product/service online if you aren’t there yet.

Considering that people are increasingly embracing the conveniences of online shopping, your business will definitely expand its reach by targeting a global audience. Again, considering how expansive the online marketplace is, who says you can’t open multiple stores? This is a good example of market diversification.

While you may as a small business owner feel the natural inclination to maintain your business’ current status quo (and enjoy the risk-free and safety advantages of doing so), it is worth appreciating that sudden events can result in the stalling or complete demise of your enterprise.

Business diversification is a proactive way to forestall such eventualities. It is also an effective way of growing your business and adding to your revenue.

In what ways have you diversified your operations? If you haven’t done this yet, what are some of the ideas you may consider implementing?

Growing a startup into a mega-company makes for an epic entrepreneurial success story

Growing a startup into a mega-company makes for an epic entrepreneurial success story

Just in the way a person passes from childhood through to adulthood, the growth of a business can be categorized into 5 stages.

Humans and businesses don’t develop in the same way though.

For humans growth is a well defined continuous process that we can estimate by using pointers such as age and physical appearance.

On the other hand, not all businesses make it to the fifth stage of growth despite being advanced in age.

In fact, many “mom and pop” businesses remain in the first stage for as long as they exist and generally cease existing when the founders decide to close shop. The point here is that businesses go through successive stages of growth at their own pace.

Some businesses never grow past Stage 1 - Existence...

Some businesses never grow past Stage 1 – Existence…

...others, however, grow all the way to Stage 5 - Maturity

…others, however, grow all the way to Stage 5 – Maturity

As the owner of a new small business you perhaps nurse ambitions of following in the path of iconic brands like McDonald’s, Facebook and Sony.

You need to find out what each stage of growth involves and what challenges lurk. You also need to find out what to do to ensure you’ll make it through each stage.

Stage 1: Existence

At inception, the main concern for you as the business owner is to find customers to whom you can sell your product/service. The big question on your mind on every waking day is whether you’ll ever get enough customers, and if so, whether they’ll buy enough to make yours a viable business.

You are also very concerned about your financial resources and capacity. Time and again you reflect on whether the cash you have will be enough to cover all of your startup’s requirements, and if not, where you are going to source for more.

At Stage 1 a lot of your effort goes into finding customers and raising cash to sustain operations.

At Stage 1 a lot of your effort goes into finding customers and raising cash to sustain operations.

Doubts begin to ease when you realize that you’re no longer testing your idea but are actually beginning to make headway in your target market. Business has started to trickle in and you are now able to scale; get ready for stage 2.

Lessons to learn:

Effective research and planning are imperative here. You need to be fully aware of who your target customers are and what niche of the market you have to focus on. Armed with these insights you should come up with a purposeful action plan for initial market penetration.

You are testing systems here to find out what can work and what won’t. Many responses will tend to be negative but if you tie the sparse positives together you will see the makings of the path you should follow.

Stage 2: Survival

At this point it is really evident that the basics of your business idea are workable. Your business is on its feet and concern has now shifted to monitoring your revenues and expenses. Now those terms you have been reading about like “cash flow” and “break even” are beginning to make sense.

You begin to look at the equipment or assets you used to start the business with the aim of repairing or replacing them. After all, you now have some cash.

At Stage 2 the business is growing and cash flow is steady. It is now possible to re-invest in the business so as to improve productivity.

At Stage 2 the business is growing and cash flow is steady. It is now possible to re-invest in the business so as to improve productivity.

A little later you realize that by investing in some more equipment or hiring some labor your productivity and income can be increased.

Lessons to learn:

After making it through the typically harrowing existence phase and clawing your way to survival, you do have a reason to smile, albeit cautiously.

You have at least proved that there is market demand for your product/service.

Nevertheless, this demand is at first quite meager; you are just making enough to survive.

A proactive entrepreneur won’t be comfortable with mere survival though. Now more than ever you need to refine your market research and penetration strategy.

Consider feasible action plans that will help you to make much more than ‘survival money’. Approach more potential clients, let them know what you are offering, and let them know what value they’ll get by consuming your product/service.

The sure way to fail at this stage is deciding to be content with the little business your initial clients bring.

Stage 3: Success

At this stage your business is vibrant and profitable. Demand for your product/service is steadily increasing by the day. You are no longer as committed to finding new clients because your customer base is suitably sufficient. In fact, a considerable portion of new business is coming your way courtesy of referrals from current clients.

At Stage 3 business is very vibrant. Demand for your product is high and customers are plentiful.

At Stage 3 business is very vibrant. Demand for your product is high and customers are plentiful.

In the case of an online business, your website has become pretty familiar in target market circles. Your marketing strategies are really paying off.

Thinking about future growth, two options come to mind.

Scenario 1:

You consider using the business as the platform of your growth. This will involve pooling resources for purposes of funding the next stage of growth, whilst ensuring that the business remains profitable.

Scenario 2: 

You consider using your resources to fund the growth of a new business, whilst using the current business as a support. This means that you’ll have to appoint managers to run operations in your place, trusting that they’ll be competent enough to achieve increasing growth and profitability.

Lessons to learn:

This is the stage where things have finally started to sort themselves out.

Unlike in the two previous stages, relaxation time actually means that you have ‘left work at the office’. Revenues are good and profits are healthy.

You nevertheless have a decision to make.

You can opt to be content with serving your current customer base without committing resources to more growth.

OR

You can opt to grow to the next level, again by researching, planning, and implementing a well informed course of action.

Stage 4: Take-off

The assumption here is that you have opted for Scenario 1 as has been outlined above.

You soon realize that success at this stage depends on adequate funding and quick growth.

Planning is being done on two fronts i.e. for operational and strategic purposes (current business and future expansion respectively).

The need for managers becomes very evident and you seek competent professionals who’ll be in charge of various departments. An organizational chart is also drawn up to clearly illustrate how duties have been delegated.

At Stage 4 it becomes imperative to hire a skilled management team and to delegate duties accordingly

At Stage 4 it becomes imperative to hire a skilled management team and to delegate duties accordingly

Since operational and strategic interests are being simultaneously implemented, the business is soon forced to contend with a high debt-equity ratio. You are also forced to adopt aggressive measures aimed at maintaining sufficient cash flow and controlling expenses.

Failure at take-off stage is normally attributed to three reasons:

  • Insufficient cash flow,
  • Trying to grow too fast, or,
  • Ineffective delegation of authority/responsibility to the managerial team.

Lessons to learn:

Success or failure at this stage depends on how well or poorly you plan and implement business operation systems, delegation of authority, and implementation of growth.

A below par execution of any of these three factors will not only compromise the other two but can ultimately lead to business collapse.

What a shame that would be having come so far.

Yet again you will need to research, plan and implement well informed concepts, systems and processes, and ensure that you continuously monitor and evaluate them.

More importantly, now is the time to look for and hire experts who are more knowledgeable in these three significant focus areas. Consult widely with business owners who have successfully progressed to the next level – it could make the difference between success and a crash and burn fate.

Stage 5: Maturity

At this stage your business is most likely being referred to as a company. The management structure is now decentralized and efficient organizational systems are running the show like a well-oiled machine. Finances are also in good order.

It is now easier to proceed with further strategic and operational ambitions.

You and the business are now distinctly separated as regards operations and finances.

At Stage 5 the business is now a company, and a household name

At Stage 5 the business is now a company, and a household name

Further success is more or less assured provided that the business’ entrepreneurial traits and tendencies are sustained. Henceforth, keen focus must be paid to continuous innovation and risk-taking, subject to effective market research.

Lessons to learn:

Your business is finally at the apex; now you are a big player.

Savor your success but don’t get carried away.

Now it’s all about running an organization that has a tried-and-tested capacity to adapt to constantly changing internal and external requirements.

Looking at various industry top-dogs, continuous improvement can only be achieved through sustained researching, planning, implementation, monitoring, evaluation and re-evaluation.

We all know of several examples where people have started with mere ideas and successfully transformed them into mega corporations. Such transformation can never be instantaneous – it takes shape in gradual stages. Getting from one stage to the next requires increasingly greater input that’s markedly different in scope. One thing remains constant though – the need for thorough researching, planning, implementation, monitoring, evaluation and re-evaluation.

Entrepreneurs have what it takes to go up and over the mountain - just like the little engine that could

Entrepreneurs have what it takes to go up and over the mountain – just like the little engine that could

Overnight success is a myth, at least in the world that we live in.

To be successful at achieving your objectives you must be prepared to put in lots of hard work, have perseverance, and continually strive to make yourself even better.

These are sentiments that successful entrepreneurs live and breathe every day; these thoughts dominate their psyches, they are the fuel which helps them to keep chugging forward even when the track uphill seems insurmountable.

The successful entrepreneurs of today and those of years past all have remarkable stories of what they had to endure on their way to the top. Lots of these success stories are staple textbook contents that many people know almost word-for-word.

Naturally, success stories are compiled way after entrepreneurs’ achievements become legendary.

Is it possible though to appreciate what goes through the mind of an entrepreneur on every waking day when every attempt at making progress is thwarted back by an assortment of obstacles, frustrations, disappointments, short-lived joy, success-before-another-setback, and the like?

In my opinion, the entrepreneurial mindset is what keeps such men and women going forward even when the proverbial dawn seems like a far-fetched concept.

Thinking about it, these mindsets must surely comprise of the traits below.

1. Passion

Entrepreneurs zeal for success really knows no bounds...

Entrepreneurs zeal for success really knows no bounds; hitting “impossible” shots is quite normal…

Entrepreneurs are absolutely committed to succeeding at what they set out to do. Doing what they have to do to get there is a personal challenge that must be taken by the horns.

Shying off or running away from the challenge is just not an option; taking it head-on is the only way out. This is the way they know how to live and so what’s necessary has to be done.

2. Self-belief

Its entrepreneurs immense self-belief that urges them to work even harder and eventually succeed...

It’s entrepreneurs immense self-belief that urges them to work even harder and eventually succeed…

To excel at what other people and the school of common thought perceive as “too difficult, impossible, or a struggle in futility” you must have an abundance of self-belief. You must also have abundant belief in your ideas of how the challenge can be tackled and overcome.

Entrepreneurs have tons of both; enough to buoy them up and forward even when the odds are stacked high against them.

Belief and faith become especially invaluable when it gets so bad and the pessimists are sneering and laughing behind your back saying “we told you so”.

3. Courage

Say what you may but there's just no way to stop entrepreneurs from doing what they love...

Say what you may but there’s just no way to stop entrepreneurs from doing what they love…

Entrepreneurs often need to face new challenges that are quite impossible to get through using conventional approaches.

In the face of such a challenge many an ordinary person would hurriedly close shop, turn back, and declare the task impossible.

It is not so for entrepreneurs – not as long as their minds are instinctively urging them forward towards success. They therefore venture into paths unknown and boldly ready themselves to overcome anything that would dare prevent them from reaching their goals.

4. Determination

For entrepreneurs, getting the job done often calls for resoluteness, endurance and grit

For entrepreneurs, getting the job done often calls for resoluteness, endurance and grit

This quality is never too far away from courage. Staying the course even when the road ahead is clouded with doubt and raging with winds of despair requires lots of determination.

Faced with discouragement and seemingly unending setbacks entrepreneurs employ grit to pull forward at times when simply walking away looks like the best thing to do.

5. Instinct

The entrepreneurial journey is a blend of thoughts, actions, consequences, instincts, gut feelings, etc

The entrepreneurial journey is a blend of thoughts, actions, consequences, instincts, gut feelings, etc

Charting one’s course forward where there’s no structured path to follow means that many of the approaches you’ll have to consider when handling different situations will be unconventional.

Entrepreneurs face lots of these situations and because there’s no manual to refer to they simply go with their gut feelings.

It’s not as simple though.

Entrepreneurs weigh up several courses of action and ponder about what the consequences of each may be. Sometimes these decisions have to be made quickly. Making the wrong call isn’t anything new though. Nevertheless, being in such situations time and again does sharpen their decision-making ability.

6. Risk-taking

Entrepreneurs take calculated risks on their way to the top...

Entrepreneurs take calculated risks on their way to the top…

The need to get what they want compels entrepreneurs to step away from their comfort zones and make a pursuit of their objectives.

Many people feel that it’s safer to stay with what works, and will gladly do so, instead of taking risks to find out if a new approach will work similarly or even do better.

Entrepreneurs, on the other hand, understand that the pursuit of their objectives requires them to take risks. They however strive to make decisions based on calculated risks.

7. Vision

Entrepreneurs figure out how to turn their dreams into reality

Entrepreneurs figure out how to turn their dreams into reality

Entrepreneurs begin by dreaming and forming mental pictures of whatever it is they need to achieve. They then identify what the goals and objectives of this achievement are.

Based on these they are able to map a strategic course and plan of action that will lead them to the desired achievement. Having a vision helps entrepreneurs to remain focused and result-driven.

8. Discipline

Entrepreneurs are focused individuals. Don't expect them to quit just because things are hard...

Entrepreneurs are focused individuals. Don’t expect them to quit just because things are hard…

It takes discipline to remain committed and dedicated to getting things done. This is more so when success isn’t forthcoming and the task is fraught with setbacks.

Entrepreneurs are human beings too and in such circumstances they also think about how pleasant it would be to lie on the beach and sip on pinacoladas.

Discipline however prevails on them to continue getting things done every day and to not call it quits until the desired result is attained.

9. Resilience

Despite failing severally, entrepreneurs will stay on, learn the ropes, and eventually succeed

Despite failing severally, entrepreneurs will stay on, learn the ropes, and eventually succeed

Failure is for entrepreneurs not a scary monster but rather just another thing that must be taken in stride.

Recurrent failure is not enough to deter entrepreneurs from achieving their goals and objectives; it just gives them a new motivation to keep working until success is theirs.

Situations that are seemingly hopeless are turned around in the nick of time and quite often innovative solutions for similar bottlenecks are born.

10. Adaption

Expect entrepreneurs to succeed anywhere regardless of how tough conditions are

Expect entrepreneurs to succeed anywhere regardless of how tough the conditions are

Entrepreneurs are not afraid of change and whatever consequences this may have for their businesses. They quickly accept the reality of the situation and proactively think of solutions and approaches that they can employ to make the best of the new environment.

Quickly reacting to new opportunities as they arise, they forge ahead with belief and foresight.

11. Learning

With every small step forward entrepreneurs always seek to learn new things

With every small step forward entrepreneurs always seek to learn new things

Personal development and advancement are things that entrepreneurs continually invest efforts towards. They are almost always thinking about new ways to grow and will take up opportunities that will teach them something new even if it’s outside their current scope.

They select mentors and other figures of inspiration aiming to learn new things that will make them better.

12. Inspiration

Entrepreneurs and their achievements spark a light in many people and urge them to pursue success

Entrepreneurs and their achievements spark a light in many people and urge them towards their own success stories

As a result of their successes entrepreneurs are looked up to by many people who then use their examples to excel in their own lives. In interacting with others, entrepreneurs identify useful talents and qualities in different people and they often take to helping them to achieve their potentials.

These are some of the characteristics of the entrepreneurial mindset. Do you feel that most of these qualities describe you? Do you feel that you have what it takes to be an entrepreneur?