So you’ve got a great idea for a business, now what? The question you’re really asking is how do you turn a great idea into money? It’s the question inside the question that entrepreneurs are afraid to ask out loud. I wonder why that is? Isn’t that what creating a business is all about, making a profit to support you and your family in a lifestyle you can grow accustomed? As far as I’m concerned, it is. I’m not sure why many people now consider profit a bad word. We need profit to grow businesses, hire employees and make charitable contributions. Without profit, we’d have none of that. The answer can be summed up in one word: entrepreneurship. In other words, turn your great idea into a business.
Merriam-Webster defines entrepreneurship as:
“one who organizes, manages, and assumes the risks of a business or enterprise.”
The concept that a person can take an idea and turn it into a profitable business and achieve financial security is the embodiment of the American Dream. For years, individuals have been developing ideas into businesses. Some have taken really harebrained ideas and become overnight successes. Can you think of any harebrained business ideas that turned into financial windfalls? I'll talk about a couple of well-known ideas that worked out in a future post.
There are all kinds of statistics from government and private sources about how many businesses survive and how many fail. Generally speaking, roughly 80 - 90% of new businesses fail. And there’s a good reason. Depending on which publication you read or which organization you believe, there are literally dozens of reasons start-ups fail. I generally categorize business failures into three groups:
1. The idea behind the business was a silly non-star aligned harebrained idea
2. The real idea behind the business wasn’t sufficiently studied and planned
3. The individual starting the business screwed up.
In fact, operator error is the root cause of almost every business failure. The owner didn’t understand the market, the capital requirements, the complexities of partnerships or the seriousness of cash flow. Oh, the cash flow, that vital nourishment of all small businesses. Perhaps the market turned sour and the owner didn’t have enough capital to sustain though the bad times. Could we add a fourth category or fifth or tenth? Sure. But I generally categorize anything not a 1 or a 2 as operator error. You can make the case (it’s semantics really) that the economy turning isn’t something that the owner can do anything about. I could argue that the owner should have foreseen lean times and had a reserve. Does it really matter? I think you get the point.
If we look back to the definition of entrepreneurship, it suggests that someone is organizing and managing a business. That someone is you. It’s the organizing and managing that tends to get in the way of most people being successful. That’s the part that makes starting a business such a risky proposition. However, the statistic that you don’t usually hear is that for people who get some business education and coaching, the statistic turns upside-down. Entrepreneurs who get business and financial education and who work with a mentor or coach tend to succeed at an 80% rate. Now that’s more like it.
Merriam-Webster defines entrepreneurship as:
“one who organizes, manages, and assumes the risks of a business or enterprise.”
The concept that a person can take an idea and turn it into a profitable business and achieve financial security is the embodiment of the American Dream. For years, individuals have been developing ideas into businesses. Some have taken really harebrained ideas and become overnight successes. Can you think of any harebrained business ideas that turned into financial windfalls? I'll talk about a couple of well-known ideas that worked out in a future post.
There are all kinds of statistics from government and private sources about how many businesses survive and how many fail. Generally speaking, roughly 80 - 90% of new businesses fail. And there’s a good reason. Depending on which publication you read or which organization you believe, there are literally dozens of reasons start-ups fail. I generally categorize business failures into three groups:
1. The idea behind the business was a silly non-star aligned harebrained idea
2. The real idea behind the business wasn’t sufficiently studied and planned
3. The individual starting the business screwed up.
In fact, operator error is the root cause of almost every business failure. The owner didn’t understand the market, the capital requirements, the complexities of partnerships or the seriousness of cash flow. Oh, the cash flow, that vital nourishment of all small businesses. Perhaps the market turned sour and the owner didn’t have enough capital to sustain though the bad times. Could we add a fourth category or fifth or tenth? Sure. But I generally categorize anything not a 1 or a 2 as operator error. You can make the case (it’s semantics really) that the economy turning isn’t something that the owner can do anything about. I could argue that the owner should have foreseen lean times and had a reserve. Does it really matter? I think you get the point.
If we look back to the definition of entrepreneurship, it suggests that someone is organizing and managing a business. That someone is you. It’s the organizing and managing that tends to get in the way of most people being successful. That’s the part that makes starting a business such a risky proposition. However, the statistic that you don’t usually hear is that for people who get some business education and coaching, the statistic turns upside-down. Entrepreneurs who get business and financial education and who work with a mentor or coach tend to succeed at an 80% rate. Now that’s more like it.
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