Entrepreneurship is something many people dream of, but only few bring to fruition. Why is owning your own company so hard to achieve? The difficulty in this journey, for most people, lies in identifying the starting place and answering the question, What can I do to become a successful entrepreneur? The process involves discovering a gap in the current marketplace and then exploiting that gap to your own advantage, which can seem like an overwhelming challenge. The key to finding the gap is to break the process down and think about it logically.
The path to self-employment, owning and managing your own business, can come about quite fortuitously or it can happen by design. For example, a new mother builds a makeshift baby-carrier that frees her hands, keeps baby comfortable, and converts to a seat for grocery carts. When she goes out with it, she is asked so many times where she bought it that she decides she should go into the business of producing them. This mother has hit upon a market opportunity quite accidentally; for many entrepreneurs like her, their ideas came about as a result of hobbies or an out of the blue inspiration. But these revelations are few and far between and they require a lot of patience; waiting and hoping an idea will surface. So, for the rest of us, we need to force the issue and figure out where and how to look for business opportunities.
The most common source of new venture opportunity arises from past work experience. Studies have shown that about 45% of venture ideas are formed while working in the same industry. Some good questions to ask yourself when searching for business opportunities are:
- Could I do my current job on my own instead of as an employee?
- How could this product or service be made better?
- A customer has asked about a certain product or service extension, is this something I can provide?
- Is there a business opportunity that my company has rejected that I could pursue independently?
When searching for an entrepreneurial venture it is important to recognize that the discovery is not a result of random actions, it is a structured process that is based on solid observations about how to do something better or different.
- New product or service: This is the type of new venture strategy that most people think of first, but it also involves the most innovation, creativity and time.
- Parallel Competition: Do what others are doing; only, do it better.
- Buy a Franchise: No ingenuity required, but it is important to thoroughly research the franchiser, purchase price, and obligations including royalties.
- Geographic Transfer: Look for successful businesses in other cities or countries and bring the product or service to your own region before the original company expands.
- Exploit a Supply Shortage: Is there something that is hard for you, your customers, your friends, etc to get? If so, figure out how to supply it profitably.
- Buy a Business: This strategy requires systematic searching for the right opportunity: confirm that there is adequate cash flow and that the price reflects the cost of asset acquisition and a reasonable premium for profitability and goodwill.
Regardless of the method used to uncover an exciting new venture opportunity, the real work has just begun. You now have the task of evaluating your idea and yourself to make sure that the prerequisites for success are there. With a good idea and good leadership, your entrepreneurial dream can come true. Start the process now, and begin observing the many ways you can serve the market directly.
David Gass is President of Business Credit Services, Inc. His company publishes a weekly e-newsletter on Small Business Consulting at their web site http://www.smallbusinessconsulting.com