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Reprinted from growvc.com. See original post here.
By Isaac Bullen
Growing up in Austin, Texas, I have encountered numerous brilliant minded businessmen who have gone on to create successful companies on their own. Michael Dell is the most notorious; he founded one of the largest computer manufacturing companies in the world. One of my contemporary college graduates went on to form Hey Cupcake, which started as nothing more than a food trailer, and has since grown to several locations. So, the question is, what makes these businesses successful?
Here are a few things I’ve learned from talking to other entrepreneurs, developing my own business ideas and listening to guest lectures:
1) The most important thing behind any successful entrepreneurial idea is a good concept. However broad that term may be, what is known is that the idea must feasible and money needs to be accounted for; pardon the pun. Know how much everything will cost to set up, use accurate figures to estimate returns and search for investors that will likely give the amount of money you need to begin. Keep this in mind before you start your actual business.
2) Often times, many guest lecturers are extremely vague in their wording. This just happens to be the nature of the business; again, no pun intended. Whether they are trying to protect their idea or they have nothing to say but broad generalizations, many lecturers tend to speak in ways that really do not contribute anything when speaking to a large audience. I find the best thing to do when attending a guest lecture with very vague information is to ask for specifics at the end. Make sure your question demands thought and could not be answered by just anyone, rather, specifically requires the knowledge of the person talking. They should be lecturing because they are experts; make them show their expertise.
3) Practice before you begin your business. I took an entrepreneur class in which we came up with the idea for a double sided peanut butter jar that would allow for access to either side of the container. The project took a lot of work without requiring the investment of any money. I was faced with challenges I could not have conceived of before I started actually doing the work.
Specifically, the question came down to would it be viable to charge extra money for a container with two lids. The cost of the extra lid would have to justify allowing access to all the contents of the jar. This question involved calling peanut butter manufactures as well as jar producers. Much of the information we hoped to get was classified as confidential, but by the end, we were able to conclude that it was not a viable concept.
4) As demonstrated with the previous point, your practice concept does not have to be a good idea. In fact, the idea really does not matter because this is just a test to fine tune your skills. Where you start to learn is how you go about collecting information, mitigating potential problems and estimating how much capital is required from investors in your idea. The key point here is entrepreneurial endeavors requires more work than initially meets the eye, and properly preparing for things that can happen will save you both money and time.
5) One of the most sobering pieces of advice I ever received was the fact of the matter is that most businesses fail. All the preparation in the world combined with a great concept does not guarantee success. Entrepreneurial endeavors are risky by nature. If, at the end of the day, your business fails, do not lie to yourself and pretend that there are feasible options when there clearly are not. Be honest with yourself and know when to cut your losses.
Keep in mind that good preparation, getting the most out of guest lectures by asking hard questions and developing a unique concept are some of the best ways to prepare for a life as an entrepreneur. It’s risky business, but the potential reward certainly can justify the required leap of faith.
Isaac resides in the UK and works in search marketing for companies like AON Hewitt, specialists in Auto Enrolment, fiduciary management and human capital consulting.
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