· Be prepared to learn from your mistakes and never to repeat them again.
· Be emotionally prepared for the rise and falls of entrepreneurship. DO not allow them to waver you from your goal.
· Be willing to live with fear, risk and a occasional failure in the course of your entrepreneurial ventures.
· Comprehend, cultivate and refine the vision of your business
· Align your business with your passions in life.
What are the 8-point test to qualify as an entrepreneur ?
1. An undying obsession to succeed.
2. Guts to build the business against all odds.
3. Taking the risk to plunge without knowing what lies beyond.
4. Staying motivated and resilient towards changing tides of the business.
5. A Non-quitter even when the going gets tough.
6. Always prepared and organized in efforts to achieve the goal.
7. Clear and well-thought road map of the business.
8. Enjoy the support of the masses.
Six steps to creating a winning business idea
Step 1: Infinite triggers that fuel the supply of ideas.
· passion for a subject may be the genesis of a compelling idea
· a new product may result from a visionary who sees opportunity to transpose an existing concept to a totally new concept.
· Ideas are to be seen and pursued by those who seek them.
· Know there are ideas with your name on them. Seek them out.
· Look for problems and opportunities within your environment. They exist
Step 2: Knowledge
· Ideas are generated from known facts; not thin air
· Ideas are born by listening to customer needs and their perspective on new concepts
· Data gathered from existing products manufactured or sold
· Results retrieved from pilots of programs
· Observation of established procedures
· Based upon knowledge, imagine solutions to what you seek. Ideas are born.
Step 3: Connecting the Dots
· Cognitive ability to connect two or more different but related facts.
· Connected, they become a novel idea that has never been conceived, developed or commercialized.
· Formulating a thoughtful prediction which address a problem or creates a new opportunity
· Be zealous and passionate about your ideas. They are yours.
Step 4: Test the Idea
· Testing the formulated prediction to collect data
· Analyzing and interpreting the tested results to conclude if the prediction is a viable solution
· Test your ideas to see if it will work and customers will want to buy them.
Step 5: Timing of Ideas
· Ideas conceived may meet the needs of the consumers of the present time
· Some may not be anticipated or appeal to consumers at present time but may be of value in the future
· Is the market ready for your ideas? Now or later?
Step 6: Was it a good idea?
· An idea alone is worth nothing without commercialization and paying customers
· Some may reap in profits, some could turn out to be failures
· Eliminate possible failures quickly without further wasting time, effort and money
What is the purpose of a Business Plan ?
1. It serves as a blueprint for how will your business be run.
2. Organize your thoughts and action plans in making your business a success.
3. Outlines the short and long-term goals of the business by spelling out your purpose, vision and means of operation.
4. Prepares you for the future by projecting future needs of your customers and your ability to meet those needs.
5. Keep you in track of your goals and ensures you do not steer away from the outlined goals when you make daily decisions
6. Serves as a resume of your business to seek investors or get a loan to finance the start-up, operations or expansion of it.
How to conduct Market Research ?
What is Market Research ? It provides the business a picture of products and services that are profitable for the budding entrepreneur. For products and services already in the market, the market research provides insight to the business if its products and services meet the needs and expectations of the customer.
Before beginning a new business venture, conduct a market research to derive the direction and the blue print of you’re the business. The results of a good market research provides information as who would likely be your customers, what would be their expectations and how well will your products and services be received .
The results derived from a market research can be used to create a business or marketing plan. It can also serve as a tool to measure the likely success of your current plan. A poorly conducted market research can steer a business to failure or even worse financial loss, no matter how brilliant the product or services may be.
Types of Market Research
Primary Research: Gather and analyze data collected from current sales and the effectiveness of current practices. It also takes into account the competitor’s plans and strategy, giving you the edge over your competitor. Methods involved in collecting information:
· Interviews (face-to-face, by telephone)
· Surveys (online or by email)
· Questionnaires (online or by email)
· Focus groups or sampling of potential clients or customers and getting a direct feedback
Questions you may want to ask:
· What factors do you consider when purchasing this product or service?
· What do you like or dislike about current products or services currently on the market?
· What areas would you suggest for improvement?
· What would be the reasonable price for the product or service?
Secondary Source of Research: The secondary research involves analyzing of data that has already been published. With secondary source of research, you would be able to identify competitors, established benchmarks or standards and target segments. Segments would be customers who fit the targeted demographic i.e. people of a certain age group, of a certain earning capacity, exhibit particular behavioral patterns or who live a certain lifestyle.
Data collection done for most types of research fall under any one of the two categories; quantitative and qualitative. Quantitative method of data collection would require a large sample data and employs complex mathematical analysis. Information derived here, sheds light on the statistically significant differences found in the researched item.
Qualitative methods on the other hand helps to fine-tune the results obtained from the quantitative method and usually involves a smaller sample size. This method helps the business owner to identify problems or gaps in products and services that can be attuned to meet customers’ expectations and requirements.
Common Pitfalls in Marketing
1. Relying entirely on secondary source of research. This can cause you dearly as secondary source of research targets a large spectrum of similar businesses with varying operation needs and environment which may not necessarily suit yours. Research data obtained could be outdated and irrelevant to your business.
2. Relying only on web resources. Information gathered in the common search engines are common to everybody and may not necessarily be accurate. Use other resources like industry related societies, journals, local libraries, community centers etc. to gain a deeper insight.
3. Conducting survey with the people you know. Friends and family may not always be the best survey subjects. To get real and accurate information, you need to reach out to actual customers to learn about the needs and preferences and expectations.
Successful Entrepreneurs, what it takes to be one ?
What is accounting ?
The Basic Accounting Equation
The rule which is always true is that:
Capital = Assets – Liabilities
Assets = Capital + Liabilities
Capital + Profit – Drawings = Fixed Assets + Current Assets - Current Liabilities - Long Term Liabilities
The fact is that however you may present the accounting equation, the totals of both sides will always be equal and this will always be true no matter how many transactions there may be.
The accounting equation is expressed in a financial position statement in the way of the Balance Sheet.
A field of accounting that treats money as a means of measuring economic performance instead of as a factor of production. It encompasses the entire system of monitoring and control of money as it flows in and out of an organization as assets and liabilities, and revenues and expenses.
Financial accounting gathers and summarizes financial data to prepare financial reports such as balance sheet and income statement for the organization's management, investors, lenders, suppliers, tax authorities, and other stakeholders.
Management accounts are used to help management record, plan and control the activities of a business and to assist in the decision-making process. They can be prepared for any period (for example, many retailers prepare daily management information on sales, margins and stock levels).
There is no legal requirement to prepare management accounts, although few (if any) well-run businesses can survive without them.
There is no pre-determined format for management accounts. They can be as detailed or brief as management wish.
Management accounts can focus on specific areas of a business' activities. For example, they can provide insights into performance of:
· Separate business locations (e.g. shops)
· Departments / divisions
Management accounts usually include a wide variety of non-financial information. For example, management accounts often include analysis of:
· Employees (number, costs, productivity etc.)
· Sales volumes (units sold etc.)
· Customer transactions (e.g. number of calls received into a call centre)
Management accounts largely focus on analyzing historical performance. However, they also usually include some forward-looking elements - e.g. a sales budget; cash-flow forecast.
Financial accounts describe the performance of a business over a specific period and the state of affairs at the end of that period. The specific period is often referred to as the "Trading Period" and is usually one year long. The period-end date as the "Balance Sheet Date.
Companies that are incorporated under the Companies Act 1989 are required by law to prepare and publish financial accounts. The level of detail required in these accounts reflects the size of the business with smaller companies being required to prepare only brief accounts.
The format of published financial accounts is determined by several different regulatory elements:
· Company Law
· Accounting Standards
· Stock Exchange
Financial accounts concentrate on the business as a whole rather than analyzing the component parts of the business. For example, sales are aggregated to provide a figure for total sales rather than publish a detailed analysis of sales by product, market etc.
Most financial accounting information is of a monetary nature. By definition, financial accounts present a historic perspective on the financial performance of the business
The process of preparing management reports and accounts that provide accurate and timely financial and statistical information required by managers to make day-to-day and short-term decisions.
Unlike financial accounting, which produces annual reports mainly for external stakeholders, management accounting generates monthly or weekly reports for an organization's internal audiences such as department managers and the chief executive officer. These reports typically show the amount of available cash, sales revenue generated, amount of orders in hand, state of accounts payable and accounts receivable, outstanding debts, raw material and inventory, and may also include trend charts, variance analysis, and other statistics. Also called managerial accounting.
What is Financial Accounting ?
What are Financial Accounts ?
What is Management Accounting ?
What are Management Accounts ?
What must a business plan contain ?
A business plan is an essential roadmap for business success. Ideally the following information should be included in a well written business plan:
A snapshot of your business plan as a whole and touches on the company profile and goals.
This section provides information on what you do, what differentiates your business from others and the markets your business serves.
Before launching your business, it is essential for you to research your business industry, market and competitors
Organization & Management
Every business is structured differently. Find out the best organization and management structure for your business.
Service or Product Line
What do you sell? How does it benefit your customers? What is the product lifecycle?
Marketing & Sales
How do you plan to market your business? What is your sales strategy?
If you are seeking funding for your business, find out about the necessary information you should include in your plan.
If you need funding, providing financial projections to back up your request is critical.
An appendix is optional, but a useful place to include information such as resumes, permits and leases.