The truth is that many businesses are started as a flash of entrepreneurial endeavour. However, once the entreprenreur is living comfortably, the fear of losing it all is deemed to be too high a risk, and so the entrepreneur simply resorts to managing the business rather than by seeking continous entrepreneurial opportunities.
It is simply required that the business owner recognise that the owning/managing of a business is not an entrepreneurial event. Entrepreneurship is an action not a state of being.
Small business owners need to find and rekindle the entrepreneurial spark that got them going. They need to understand that the risk associated with doing nothing is much higher for the business, than the introduction of entrepreneurial activities would be.
Growth and new ideas do carry risk, but the more experience you have the lower this risk is, and it is definitely a lower level risk than doing nothing represents.
In a word, surviving the recession requires ACTION. Do something. Stop whining and complaining about how tough it is. Remember that it is tough for everyone, and if your competitors are hurting, they could represent opportunities, either directly or indirectly.
Dr Rob Smorfitt
Showing posts with label entrepreneurial. Show all posts
Showing posts with label entrepreneurial. Show all posts
Saturday, April 11, 2009
Sunday, April 5, 2009
SMEs - surviving the recession in Africa
Can SMEs survive the recession in Africa? I believe they can.
The secret is to shift away from supplying to other international markets which are contracting, and to focus on the African markets.
They may not always be as sophisticated, and certain markets may not exist, but many SMEs could make the shift to African marrkets.
Large parts of Africa are still growing despite the global financial recession. The improvement in democracy in Africa, although patchy and weak, is happening nonetheless. This is in turn leading to infrastructural investment which is stimulating the markets, together with the demand for commodities with the Chinese gladly assisting in the extraction thereof. Angola is flying as are other countries.
There is obviously credit risk among other forms of risk, but many African governments understand and recognise this, and offer their citizens insurance against the risks associated with Africa. South Africa does.
The secret is to educate Africa into understanding that there is greater prosperity in commerce than in corruption, and it is also more sustainable.
The black African diaspora need to start lobbying to change the African context, and not simply write great stories from the comfort of New York. Come back and make a difference.
Regards
Dr Rob Smorfitt
The secret is to shift away from supplying to other international markets which are contracting, and to focus on the African markets.
They may not always be as sophisticated, and certain markets may not exist, but many SMEs could make the shift to African marrkets.
Large parts of Africa are still growing despite the global financial recession. The improvement in democracy in Africa, although patchy and weak, is happening nonetheless. This is in turn leading to infrastructural investment which is stimulating the markets, together with the demand for commodities with the Chinese gladly assisting in the extraction thereof. Angola is flying as are other countries.
There is obviously credit risk among other forms of risk, but many African governments understand and recognise this, and offer their citizens insurance against the risks associated with Africa. South Africa does.
The secret is to educate Africa into understanding that there is greater prosperity in commerce than in corruption, and it is also more sustainable.
The black African diaspora need to start lobbying to change the African context, and not simply write great stories from the comfort of New York. Come back and make a difference.
Regards
Dr Rob Smorfitt
Tuesday, March 31, 2009
SME and entrepreneur - why are they used interchangeably?
One of the most detrimental things that has happened to entrepreneurship, has been the less educated government official/academic/consultant/whatever, who has used these interchangeably.
They are not the same thing, and consequently whereas in the past large companies wanted to become more entrepreneurial and dubbed it intrapreneurial, today they want to be more innovative. Entrepreneur has lot its allure, and no pun is intended.
An academic author named Burch created a model for the entrepreurial continuum. I have since modified it and am still refining it, but it is still worth looking at, in an attempt to try get people to understand that entrepreneur and SME are not the one and the same. Readers can request and receive both Burch and my version my emailing me on rob@smorfitt.co.za
The key however, is that there are different types of “entrepreneur”, many of which are not entrepreneurial. According to my modified Burch, I believe that only once they reach franchisor level do they begin to become opportunity aware. I have listed the different ones below with some key characteristics.
1. Survivalist – uneducated, unskilled – resorts to selling sweets cooldrinks vegetables, bread ie. Basics and often found in poor developing countries. Do not perceive themselves as entrepreneurs.
2. Salary replacement entrepreneur – either retrenched, fired or similar, so therefore often semi skilled or skilled or educated. Starts or buys a business based purely on its ability to replace the salary he lost. Do not perceive themselves as entrepreneurs.
3. Lifestyle entrepreneur – starts as a salary replacement entrepreneur. However, “by accident and with little effort” finds that very little additional effort generates an increase in income. Then uses this income to buy toys - boats, vacation homes, motorbikes, sports cars. Never wants to earn more than to be able to afford the toys. Seldom move beyond this point. Do perceive themselves as entrepreneurs, but they are not. Large egos.
4. Small business manager/franchisee – to be really entrepreneurial, strategy and marketing are key skills for the entrepreneur. This level of entrepreneurship, as do the previously described ones, lack these skills. They have the skills and/or education to manage but do not look for opportunities beyond the initial franchise. Some of these do end up very wealthy and do become entrepreneurial to the extent of becoming portfolio entrepreneurs, but they are few and far between. Do perceive themselves as entrepreneurs.
5. Copycat entrepreneur – entrepreneurial to a degree but looks for others to lead and then follows closely behind. Not good at been innovative and creating opportunities or identifying real opportunities. Do perceive themselves as entrepreneurs.
6. Franchisor – Once again entrepreneurial to a fairly large degree but seldom looks for other opportunities beyond the initial franchise created. If they do they tend to stay within a similar area of expertise eg fast food Do perceive themselves as entrepreneurs..
7. Inventrepreneur – these people are your inventors and innovators. Always looking at everything trying to make it better. They create their own opportunities despite a fairly high failure rate, particularly in the early days; Often lack business skills but understand things at a user level and what the user wants. See themselves as inventors rather than entrepreneurs.
8. Serial entrepreneur – always looking for opportunities. Start and sell or buy and sell businesses regularly, but never own more than one at a time. Very hands on.
9. Portfolio entrepreneur - always looking for opportunities. Start and sell or buy and sell businesses regularly. Own more than one at a time. Very hands off. Employs managers or partners. Have more time available and become a lot more opportunity aware and this opportunity awareness increases as they spend more time strategising.
10. Angel funder – very entrepreneurial but not very opportunity aware. Often focus on certain key industry sectors. Similar to portfolio entrepreneur but they often are funding other businesses as part of a group of funders to reduce risk. They do not look for opportunities but rather become more adept at evaluating opportunities presented by entrepreneurs seeking funding.
11. Venture capitalist – very entrepreneurial but not very opportunity aware. Often focus on certain key industry sectors. Similar to portfolio entrepreneur except they are looking to create large enterprises. They do not look for opportunities but rather become more adept at evaluating opportunities presented by entrepreneurs seeking funding.
Regards Rob Smorfitt
They are not the same thing, and consequently whereas in the past large companies wanted to become more entrepreneurial and dubbed it intrapreneurial, today they want to be more innovative. Entrepreneur has lot its allure, and no pun is intended.
An academic author named Burch created a model for the entrepreurial continuum. I have since modified it and am still refining it, but it is still worth looking at, in an attempt to try get people to understand that entrepreneur and SME are not the one and the same. Readers can request and receive both Burch and my version my emailing me on rob@smorfitt.co.za
The key however, is that there are different types of “entrepreneur”, many of which are not entrepreneurial. According to my modified Burch, I believe that only once they reach franchisor level do they begin to become opportunity aware. I have listed the different ones below with some key characteristics.
1. Survivalist – uneducated, unskilled – resorts to selling sweets cooldrinks vegetables, bread ie. Basics and often found in poor developing countries. Do not perceive themselves as entrepreneurs.
2. Salary replacement entrepreneur – either retrenched, fired or similar, so therefore often semi skilled or skilled or educated. Starts or buys a business based purely on its ability to replace the salary he lost. Do not perceive themselves as entrepreneurs.
3. Lifestyle entrepreneur – starts as a salary replacement entrepreneur. However, “by accident and with little effort” finds that very little additional effort generates an increase in income. Then uses this income to buy toys - boats, vacation homes, motorbikes, sports cars. Never wants to earn more than to be able to afford the toys. Seldom move beyond this point. Do perceive themselves as entrepreneurs, but they are not. Large egos.
4. Small business manager/franchisee – to be really entrepreneurial, strategy and marketing are key skills for the entrepreneur. This level of entrepreneurship, as do the previously described ones, lack these skills. They have the skills and/or education to manage but do not look for opportunities beyond the initial franchise. Some of these do end up very wealthy and do become entrepreneurial to the extent of becoming portfolio entrepreneurs, but they are few and far between. Do perceive themselves as entrepreneurs.
5. Copycat entrepreneur – entrepreneurial to a degree but looks for others to lead and then follows closely behind. Not good at been innovative and creating opportunities or identifying real opportunities. Do perceive themselves as entrepreneurs.
6. Franchisor – Once again entrepreneurial to a fairly large degree but seldom looks for other opportunities beyond the initial franchise created. If they do they tend to stay within a similar area of expertise eg fast food Do perceive themselves as entrepreneurs..
7. Inventrepreneur – these people are your inventors and innovators. Always looking at everything trying to make it better. They create their own opportunities despite a fairly high failure rate, particularly in the early days; Often lack business skills but understand things at a user level and what the user wants. See themselves as inventors rather than entrepreneurs.
8. Serial entrepreneur – always looking for opportunities. Start and sell or buy and sell businesses regularly, but never own more than one at a time. Very hands on.
9. Portfolio entrepreneur - always looking for opportunities. Start and sell or buy and sell businesses regularly. Own more than one at a time. Very hands off. Employs managers or partners. Have more time available and become a lot more opportunity aware and this opportunity awareness increases as they spend more time strategising.
10. Angel funder – very entrepreneurial but not very opportunity aware. Often focus on certain key industry sectors. Similar to portfolio entrepreneur but they often are funding other businesses as part of a group of funders to reduce risk. They do not look for opportunities but rather become more adept at evaluating opportunities presented by entrepreneurs seeking funding.
11. Venture capitalist – very entrepreneurial but not very opportunity aware. Often focus on certain key industry sectors. Similar to portfolio entrepreneur except they are looking to create large enterprises. They do not look for opportunities but rather become more adept at evaluating opportunities presented by entrepreneurs seeking funding.
Regards Rob Smorfitt
Saturday, June 28, 2008
SMEs - are we realistic in our expectations
When we commence our new business venture, how realistic are we in our expectations of how the sales will progress? Most business plans I see are seldom realistic! They invariably show the business making profit from the first day. This seldom if ever happens!!
If it does happen, it is often when a very popular franchise has been purchased, or if the business has commenced activity with a pre-sold order book.
This is normally a red flag for any financier who has been approached for finance for the new business. Realistically there is seldom much chance of most businesses breaking even before the end of the first six months, and it can often take a lot longer.
A way to resolve this problem is to do your sales budgets first, and then your expense budgets. Too often sales budgets are done after the expense budget, and then made to fit the occasion. Your first sales budget is normally based on gut feeel and hopefully also some market research. Rely on it and do not change it to make sure you are profitable from an early stage. If the business takes a while to turm profitable then it is quite likely realistic. If it takes longer than you can afford to carry it or raise funds to carry it, then drop the idea and find a new idea and then start the process again. The purpose is to find a profitable business, not try to force our dreams to come true even if they never can .
REMEMBER THE PURPOSE OF BUSINESS IS TO CREATE WEALTH, NOT DESTROY IT! So please review your sales projections before seeking finance and assess their realism!!
If it does happen, it is often when a very popular franchise has been purchased, or if the business has commenced activity with a pre-sold order book.
This is normally a red flag for any financier who has been approached for finance for the new business. Realistically there is seldom much chance of most businesses breaking even before the end of the first six months, and it can often take a lot longer.
A way to resolve this problem is to do your sales budgets first, and then your expense budgets. Too often sales budgets are done after the expense budget, and then made to fit the occasion. Your first sales budget is normally based on gut feeel and hopefully also some market research. Rely on it and do not change it to make sure you are profitable from an early stage. If the business takes a while to turm profitable then it is quite likely realistic. If it takes longer than you can afford to carry it or raise funds to carry it, then drop the idea and find a new idea and then start the process again. The purpose is to find a profitable business, not try to force our dreams to come true even if they never can .
REMEMBER THE PURPOSE OF BUSINESS IS TO CREATE WEALTH, NOT DESTROY IT! So please review your sales projections before seeking finance and assess their realism!!
SMEs - is finance hard to find
One must question whether there availability of finance to SMEs is any different today, compared to say 30 or 40 years ago.
This follows the assumption that because many governments in the world are attempting to reduce poverty and unemployment through the creation of SMEs, the number of SMEs requiring funding has obviously grown.
The second question that begs, is whether or not the reason that many of the SMEs who today are seeking finance and being refused, is that these government efforts are bringing people into the sphere of entrepreneurship, when in fact they are best suited to at best small business managers, and at worst survivalist entrepreneurial activities.
The final question, is whether or not the banks by now should have created a new methodology for assessing SME loan applications. The worldwide number of SMEs has grown immensely, and their contribution to the world economy is between 30% and 40%. Can banks continue to ignore this pot of gold?
This follows the assumption that because many governments in the world are attempting to reduce poverty and unemployment through the creation of SMEs, the number of SMEs requiring funding has obviously grown.
The second question that begs, is whether or not the reason that many of the SMEs who today are seeking finance and being refused, is that these government efforts are bringing people into the sphere of entrepreneurship, when in fact they are best suited to at best small business managers, and at worst survivalist entrepreneurial activities.
The final question, is whether or not the banks by now should have created a new methodology for assessing SME loan applications. The worldwide number of SMEs has grown immensely, and their contribution to the world economy is between 30% and 40%. Can banks continue to ignore this pot of gold?
SMEs - why do SME turnarounds so often fail
The failure rates of SMEs are often used as a reason not to fund their establishment and growth. Is this a fair assessment? Are they high risk?
There is unfortunately a certain amount of truth in the fact that SMEs are their own worst enemies, or rather the entrepreneurs who run them are. Entrepreneurs often allow their own self confidence to override their ability, and so they often ignore the warning signs until it is too late. Alternatively, the moment they see any form of positive activity, they immediately stop the corrective action, in the belief that they have solved the problem.
I recently was contacted by an SME in the media sector, on the grounds that after many years in business they still lived from hand to mouth, albeit that the business had grown. They were still negotiating with me to help them turn the business around, when they received a large order. They immediately stopped the process because they felt that the large order would now solve their cash flow problems. They had still not addessed their problems, but the big order convinced them they had.
Entrepreneurs normally are sharp enough to know when things are wrong. The most difficult part is learning to put the ego aside so that you can address the problem in a subjective manner. Do not allow yourself to fall into this trap. Remember that a smart entrepreneur fixes things or gets help if they cannot do it themselves. Act decisively and quickly, because it seldom "comes right"!!!
There is unfortunately a certain amount of truth in the fact that SMEs are their own worst enemies, or rather the entrepreneurs who run them are. Entrepreneurs often allow their own self confidence to override their ability, and so they often ignore the warning signs until it is too late. Alternatively, the moment they see any form of positive activity, they immediately stop the corrective action, in the belief that they have solved the problem.
I recently was contacted by an SME in the media sector, on the grounds that after many years in business they still lived from hand to mouth, albeit that the business had grown. They were still negotiating with me to help them turn the business around, when they received a large order. They immediately stopped the process because they felt that the large order would now solve their cash flow problems. They had still not addessed their problems, but the big order convinced them they had.
Entrepreneurs normally are sharp enough to know when things are wrong. The most difficult part is learning to put the ego aside so that you can address the problem in a subjective manner. Do not allow yourself to fall into this trap. Remember that a smart entrepreneur fixes things or gets help if they cannot do it themselves. Act decisively and quickly, because it seldom "comes right"!!!
SMEs - drivers of innovation
SMEs are often perceived to be drivers of innovation. I think the truth is more likely that entrepreneurs are the drivers.
Unfortunately not all SME owners are entrepreneurs. Entrepreneurs are generally considered to be opportunity aware, which is why they are often instigators of innovation. These entrepreneurs through their SMEs, will often drive the innnovation forward quickly, simply because they are small and nimble and able to embrace change. The downside is often these entrepreneur will embrace innovation and then build a successful business around it. Therafter they no longer innovate.
This is the sad part for which we are all the poorer. Entrepreneurs must continue to innovate, and this is why entrepreneurs must become portfolio entrepreneurs, and build other businesses. They must maintain innovative momentum, through ongoing opportunity awareness.
So if you are an innovative entrepreneur, ask yourself whether you are still innovating or whether you have stagnated into a humdrum life of one business. If the thought of starting another new business scares you, ask yourself whether you are still the entrepreneur you once were?
Unfortunately not all SME owners are entrepreneurs. Entrepreneurs are generally considered to be opportunity aware, which is why they are often instigators of innovation. These entrepreneurs through their SMEs, will often drive the innnovation forward quickly, simply because they are small and nimble and able to embrace change. The downside is often these entrepreneur will embrace innovation and then build a successful business around it. Therafter they no longer innovate.
This is the sad part for which we are all the poorer. Entrepreneurs must continue to innovate, and this is why entrepreneurs must become portfolio entrepreneurs, and build other businesses. They must maintain innovative momentum, through ongoing opportunity awareness.
So if you are an innovative entrepreneur, ask yourself whether you are still innovating or whether you have stagnated into a humdrum life of one business. If the thought of starting another new business scares you, ask yourself whether you are still the entrepreneur you once were?
SMEs - what is an entrepreneur
I received this from a friend recently. I do not know where he got it from, and if it is someone's work I apologise for not recognising you.
This is a definition of an entrepreneur:
Your entrepreneurial spirit makes you no more than this:
A heroic soul born desperately in need of adventure. To you ... a crisis is an opportunity, a moment is an eternity, a rule is a tyranny, a process is a purgatory, a joy is an ecstasy, a daydream is a vision, a hazard is a playground, silence is suffocation, and completion is death. Add to this brutally expansive spirit the overwhelming need to risk, create, and express, so that without the creating of music or poetry or books or businesses or buildings or something of meaning, your very breath is cut off ...You must create , must pour out your entire being in creation and risk. By some strange, unknown, inward urgency you do not feel truly alive unless you are intimately involved in the risk of self-expression.Thank you for having the courage to create, innovate and risk. For without your creations the world would grow dull and listless And the rest of us who are like you would not have your courageous act to lean on to inspire our own.
This is a definition of an entrepreneur:
Your entrepreneurial spirit makes you no more than this:
A heroic soul born desperately in need of adventure. To you ... a crisis is an opportunity, a moment is an eternity, a rule is a tyranny, a process is a purgatory, a joy is an ecstasy, a daydream is a vision, a hazard is a playground, silence is suffocation, and completion is death. Add to this brutally expansive spirit the overwhelming need to risk, create, and express, so that without the creating of music or poetry or books or businesses or buildings or something of meaning, your very breath is cut off ...You must create , must pour out your entire being in creation and risk. By some strange, unknown, inward urgency you do not feel truly alive unless you are intimately involved in the risk of self-expression.Thank you for having the courage to create, innovate and risk. For without your creations the world would grow dull and listless And the rest of us who are like you would not have your courageous act to lean on to inspire our own.
SMEs - the future
I believe that SME's are going to become much more important in the world economy in the coming decades. Firstly, the youth today are a lot more demanding of themselves in relation to their careers, and are not happy to settle for a post in which they are unhappy. Many of them are seeking happiness as a first criteria.
Secondly, and possibly on a larger scale is the "Baby Boomer Effect". The people of this generation are beginning to hit retirement age. Due to the size of this group, many businesses will need to continue accessing their services, not as employees, but rather as consultants. In the USA today, 70% of all SME businesses are single employee consulting type businesses. This is a large number, when we take into account the number of SMEs in most countries is 90+% of all businesses. In short big business will experience large skills shortages, which will lead to them having to make use of more consultants who will be SME based.
There are also those people who are no longer prepared to be part of the rat race. They now work fewer days and live more remotely. They commute to work and then retire back to the real jungle, and away from the concrete jungles they work in. So I see the SME becoming that much more important in the future in the global economy.
Secondly, and possibly on a larger scale is the "Baby Boomer Effect". The people of this generation are beginning to hit retirement age. Due to the size of this group, many businesses will need to continue accessing their services, not as employees, but rather as consultants. In the USA today, 70% of all SME businesses are single employee consulting type businesses. This is a large number, when we take into account the number of SMEs in most countries is 90+% of all businesses. In short big business will experience large skills shortages, which will lead to them having to make use of more consultants who will be SME based.
There are also those people who are no longer prepared to be part of the rat race. They now work fewer days and live more remotely. They commute to work and then retire back to the real jungle, and away from the concrete jungles they work in. So I see the SME becoming that much more important in the future in the global economy.
SMEs - the stress of start up
What do you do if you suddenly find you have sold your business? Yes, it can happen that the process is so quick, that you suddenly find yourself without a business. You have some capital, but not enough to live off, for very long. You need to live off the capital and start a new business really quick before you consume the capital. The pressure you suddenly find yourself under, can reduce your ability to think clearly and inhibit your creative processes.
A quick rule of thumb is to try and start a business that will give you some real income fairly quickly, especially if your capital base is fairly small. Remember that most businesses, particularly business-to-business sales, often have a 3 to 6 month lead time. Do you have enough capital to last 6 months? If not look for a small cash only retail opportunity. This may then cover your living expenses while at the same time preserving your capital for the development of another business with greater growth opportunities.
Once the other business is up and running you can then sell off the small cash retail business or let your wife or kids run it. Remember to ensure it has immediate sales, and no long sales cycles, which invariably means a consumer type product or service. However, even this kind of business, unless a franchise outlet, is likely to become a major source of profit overnight. However, it may generate sufficient cash flow to sustain the business into the profit zone.
A quick rule of thumb is to try and start a business that will give you some real income fairly quickly, especially if your capital base is fairly small. Remember that most businesses, particularly business-to-business sales, often have a 3 to 6 month lead time. Do you have enough capital to last 6 months? If not look for a small cash only retail opportunity. This may then cover your living expenses while at the same time preserving your capital for the development of another business with greater growth opportunities.
Once the other business is up and running you can then sell off the small cash retail business or let your wife or kids run it. Remember to ensure it has immediate sales, and no long sales cycles, which invariably means a consumer type product or service. However, even this kind of business, unless a franchise outlet, is likely to become a major source of profit overnight. However, it may generate sufficient cash flow to sustain the business into the profit zone.
SMEs - the pleasure of meeting with a true entrepreneur.
It does not happen often, but when it does you have a real great experience, a memorable one.
I have recently had the pleasure of meeting with two entrepreneurs. One is wealthy and the other is not. However, I have no doubt in my mind that they will both be in the long term. Why?They are both opportunistic! They are both looking for opportunities all the time. They are both focused on their success. They both have clear visions, and if not a written business plan, a clear mental image of one.
Talking to them both I was left with an immense sense of excitement about and with them. They sucked me in to their vision to the extent you just want to be part of it all. As an entrepreneur myself, I always enjoy to have my batteries recharged by someone with this kind of enthusiasm, and I am now running on full.
I have recently had the pleasure of meeting with two entrepreneurs. One is wealthy and the other is not. However, I have no doubt in my mind that they will both be in the long term. Why?They are both opportunistic! They are both looking for opportunities all the time. They are both focused on their success. They both have clear visions, and if not a written business plan, a clear mental image of one.
Talking to them both I was left with an immense sense of excitement about and with them. They sucked me in to their vision to the extent you just want to be part of it all. As an entrepreneur myself, I always enjoy to have my batteries recharged by someone with this kind of enthusiasm, and I am now running on full.
SMEs - can entrepreneurship be taught
This is a question that stimulates much debate. As an entrepreneur, I like to think I am unique and that no one can be taught to be like me. Am I correct?
There are two aspects to every entrepreneur. What personality traits/attributes they have, and what skills they have.I have no doubt that the skills an entrepreneur needs can be taught. But the traits of an entrepreneur I believe cannot. The Iceberg Theory says we cannot change peoples' values and beliefs. An entrepreneur has a strong sense of values, such as working hard when necessary, staking it all when the decision looks right. Can we change a person's values by telling them what they should aspire too.
Perhaps not, but perhaps by explaining what they should aspire to, we can assist them in at least having the opportunity to change their values. But at the end of the day the decision is still theirs.
There is no standard test to measure the personality traits of wannabe entrepreneurs in such as way that it can successfully predict their probability of success. I think that there are possibly certain skills that determine the probability of success, but there is a certain innate driving force which true entrepreneurs have which most people do not have.
There are two aspects to every entrepreneur. What personality traits/attributes they have, and what skills they have.I have no doubt that the skills an entrepreneur needs can be taught. But the traits of an entrepreneur I believe cannot. The Iceberg Theory says we cannot change peoples' values and beliefs. An entrepreneur has a strong sense of values, such as working hard when necessary, staking it all when the decision looks right. Can we change a person's values by telling them what they should aspire too.
Perhaps not, but perhaps by explaining what they should aspire to, we can assist them in at least having the opportunity to change their values. But at the end of the day the decision is still theirs.
There is no standard test to measure the personality traits of wannabe entrepreneurs in such as way that it can successfully predict their probability of success. I think that there are possibly certain skills that determine the probability of success, but there is a certain innate driving force which true entrepreneurs have which most people do not have.
Friday, June 20, 2008
SMEs - the research is valid and correct
I had the pleasure, as part of my PhD research, to interview a successful business owner, as part of my fine tuning of my questionnaire. It was a pleasure because he confirmed so much of my research to date.
Key to his success has been a vision/plan on where he wants to be down the road. He reads a lot, networks at every opportunity and has done some additional skills courses subsequent to leaving school. He funded his own business by initially working in the industry and gaining experience, and then saving until he had enough money to start his own business. He is a strong believer that the point of business is wealth creation not income creation.
Finally he said that he is extremely opportunity aware, and once he has identified a genuine opportunity, he does not delay in making the decision to proceed. He does very little without seeking out possible opportunities, and he is wired for opportunities. He has learned from his peers and through studying, and has full confidence in his skills.All this is directly in line with my research to date, as this man is undoubtedly a natural entrepreneur.This leads me to my next blog. Can we create entrepreneurs?
SMEs - ideas versus opportunities
I must say I get fairly intense when people talk about ideas generation being important for developing new businesses.
IT IS NOT ABOUT IDEAS!!!! IT IS ABOUT FINDING OPPORTUNITIES!!!!!
What is an opportunity. An opportunity exists when in the process of doing our environmental scanning for our PESTEL analysis, we see that by applying our strengths to a current event in one of the environments, we can turn the event into an opportunity. If you do not have the strengths to take advantage of an event, it is not an opportunity. An opportunity is an event that you can benefit from by applying your strengths.
The problem is that most SME owners do not do a regular environmental scan. We are all exposed to the environment around us all the time through a variety of media including newspapers and television. You cannot escape it. The question however, is whether or not you simply observe, or whether you observe in the context of business opportunities.
Do you read the newspaper and think, "I could make money out of that"? Someone who does is opportunity aware, an entrepreneur. If not they are merely SME owners. Ideas are also confused with innnovation. In doing our environmental scanning and observation we often see problems portrayed. Innovation is the task of finding solutions to problems that a particular market has. It could be the product that needs to be innovated, or perhaps the process. Either way, innovation is about changing existing products and/or processes to solve problems.
Finally, successful businesses are built on solving problems, ie. meeting the needs of the market. Ideas that are generated in a vacuum are simply that - ideas. They will not make money. Needs and problems make money for the entrepreneur who solves them.
Strike the word idea from your entrepreneurial dictionary, as it will merely lead to disappointment
IT IS NOT ABOUT IDEAS!!!! IT IS ABOUT FINDING OPPORTUNITIES!!!!!
What is an opportunity. An opportunity exists when in the process of doing our environmental scanning for our PESTEL analysis, we see that by applying our strengths to a current event in one of the environments, we can turn the event into an opportunity. If you do not have the strengths to take advantage of an event, it is not an opportunity. An opportunity is an event that you can benefit from by applying your strengths.
The problem is that most SME owners do not do a regular environmental scan. We are all exposed to the environment around us all the time through a variety of media including newspapers and television. You cannot escape it. The question however, is whether or not you simply observe, or whether you observe in the context of business opportunities.
Do you read the newspaper and think, "I could make money out of that"? Someone who does is opportunity aware, an entrepreneur. If not they are merely SME owners. Ideas are also confused with innnovation. In doing our environmental scanning and observation we often see problems portrayed. Innovation is the task of finding solutions to problems that a particular market has. It could be the product that needs to be innovated, or perhaps the process. Either way, innovation is about changing existing products and/or processes to solve problems.
Finally, successful businesses are built on solving problems, ie. meeting the needs of the market. Ideas that are generated in a vacuum are simply that - ideas. They will not make money. Needs and problems make money for the entrepreneur who solves them.
Strike the word idea from your entrepreneurial dictionary, as it will merely lead to disappointment
Subscribe to:
Posts (Atom)