Before starting your own business theres four important questions you need to ask yourself. Creating your own business takes a lot of work and you need to know what you’re getting yourself into. Carl J. Schramm, author of BURN THE BUSINESS PLAN, explains how the first step is asking yourself “Are you an entrepreneur?”.
In fact, the four most important questions for entrepreneurs are not answered in entrepreneurship courses.
The first is whether you are an entrepreneur. Asking this question of a professor of entrepreneurship, a professional investor, or a successful entrepreneur is likely to trigger a fruitless discussion about whether entrepreneurs are “born” or “made,” that is, whether an entrepreneur is birthed with special talents or if she, somewhere along the way, was in an environment that nurtured the skills needed to create a successful business. Some experts throw in the unhelpful view that entrepreneurs are people who are more comfortable with risk, while others pronounce with equal certainty that entrepreneurs are more cautious and deliberate personalities.
So, how can you determine if you really are an entrepreneur? The first step is to appreciate who entrepreneurs are by understanding just what it is that they do:
An entrepreneur is someone who exploits an innovative idea—one that he develops, or copies, improves, or rents—to start a profit-seeking, scalable business that successfully satisfies demand for a new or better product.
Because the identity of an entrepreneur is defined by action, not intent or aspiration, this definition is meaningful only through experience. No one who has not started a business can really know what it is to be an entrepreneur. Studying the three elements of this definition can help you to understand if you really want to do the things that entrepreneurs do.
A new business must first have a product or service that is sufficiently novel, or that the market will perceive to be better than that which exists, so that demand will materialize. If you are an innovator–entrepreneur, you will create the idea for your new company. Most of today’s entrepreneurs, however, do not themselves generate the ideas for their businesses. Rather, they see that there is a market need and offer improved products, services, or business processes that are better than what already exists. Or, they rent or buy access to another’s innovative idea.
Second, entrepreneurs create profit-seeking companies. They start businesses intent on making money now and expecting that the equity value of their firms will continually increase in the future. Profit-making startups are critical to our economy; new companies are the source of most of our economic growth. As new firms start and grow, those less than five years old create about eighty percent of all new jobs. Those jobs, in turn, contribute to the economy’s ability to create more innovation and wealth in the future. Also, as you will see, innovation can beget innovation; many of our most innovative and fastest-growing companies spawn additional startups
The pursuit of growth is the third defining characteristic of entrepreneurial firms. Expansion of any organization, other than government, is a sure sign of its economic value and health. Every entrepreneur wants to “scale” her company to make it bigger, better, faster, and more profitable.
Want to become an entrepreneur? Pick up a copy of BURN THE BUSINESS PLAN by Carl J. Schramm!
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Excerpted from Burn the Business Plan by Carl J. Schramm Copyright © 2019 by the author. Used by permission of the publisher. All rights reserved.
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