The backbone of striving economies is entrepreneurship, i.e. people who go the extra mile building a business, providing services and creating jobs. In the UK, 96% of businesses have fewer than 10 employees (UK 2018, Parliament UK) and other countries have similar numbers.
In recent days, the start-up concept and independent contracts are popular. Those come with many upsides, such as taking responsibility for one’s personal growth and tapping into market opportunities; and also some downsides, such as economic uncertainties and additional business functions to be fulfilled.
Many people want to become an entrepreneur – but few try, and only some succeed. How to be a successful entrepreneur or businessman? Based on my experience of building my businesses and working with others, you have to know what type of entrepreneur you are to set your strategy accordingly.
Entrepreneur Strategy Framework:
|The kind of business you have / desire||Your background and motivation as an entrepreneur||Your Strategic goal|
|Innovation||Entrepreneurial DNA – it runs in the family||Full-time job|
|Smarter and better||Take responsibility||Side business|
|“Me-too”||Want to be your own boss||Grow it and sell it|
This framework allows the categorisation of a business start-up, it can be applied in any industry and for endeavours of any size. Therefore, the benefit of this classification is that it gives guidance on the likeliness of the business idea to flourish, as well as, the required funding for the team involved in setting the business up and the skills that need to be acquired externally.
Successful entrepreneurs will set their strategy according to their personal combinations of the above characteristics. For instance:
- Good example: “An innovative business proposition or product, combined with an entrepreneurial DNA and running it as a side business.” It is a perfect combination as the entrepreneur can focus on the business proposition and the acquisition of funds required for developing a prototype; in many industries, a decent source of funding are platforms like Kickstarter and Crowd Cube.
- Problematic example: “A combination of me-too, the desire to be your own boss and wanting your business to be your full-time job.” This pattern is found more often than not in the service industry – the service and the workforce are easy to exchange, there is little to no lock-in for customers, and the staff turnover is high. Despite having an established market and its demand, the challenge here is to leverage economies of scale to run a decent operation efficiently – this is an underestimated uphill battle.
Typically, businesses start with the proposition but with too little consideration of the mid-term and long-term factors. It is vital that once you establish the circumstances, to analyse the likeliness of success and how enduring you are regarding your funding. So, once you have identified your situation honestly, then it is time to focus on the business proposition and its timing (read more on the importance of timing) while building your “engine room” (Watch Now our guide to Entrepreneurial Freedom).
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