Entrepreneurs – what do they look like?

Before you start your own business, be sure you have the personality traits that successful entrepreneurs display. The familiar characteristics of a successful entrepreneur include:

• Optimism – entrepreneurs focus on solutions not problems
• Passion – the quality that fuels their business and their personal lives
• Persistence – entrepreneurs keep going in times of adversity and stay focused on the end goal
• Flexibility – the ability to adapt to a changing environment
• Education – not formal education but a desire to learn and a drive to improve
• Focus – entrepreneurs focus on the big vision and recognise that short-term wins, although important, must add to long-term success.

Generating a business idea

If this sounds like you, the next step to setting up your own business is to identify a gap in the market that your product or service will exploit. This is easier said than done and can be the toughest part of setting up your own business. To do this, ask yourself some searching questions. What services or products are missing from the market? Could you invent a new product? What do you dislike about existing products and services? Could you improve them?

Using your own life experiences to inspire your ideas can help you spot business opportunities. This will also make you passionate about your product as you will be able to see and sell the benefits. Remember passion is one of the key characteristics of a successful entrepreneur.

Turning your idea into a strategic plan

Studies show that a significant amount of new businesses with no business plan fail within the first two years. The old adage is true: fail to plan and you plan to fail.

Your business plan reflects how you see your business developing and maps out how you intend to drive your business forward. Your plan should set out your product, your intended market, and your key financial targets such as projected sales and profits.

Financing your plan

Your plan should also show the seed capital you need to start up and your day-to-day working capital requirement. It is vital that your assumptions and estimates are accurate and reasonable. Do this and you will be able to foresee any problems and resolve them before they happen. A robust business plan allows you and potential investors to see how your business may perform in the future.

Here are some ways for you to finance your business:

• Investigate any government support such as grants or loans.
• Borrow money from a bank or other lender.
• Ask for help from friends or family.
• Look at equity finance, where you raise money from external investors in return for a share of your business. These investors will usually be venture capital firms or business angels.
• Consider bootstrapping, a way of starting a business without external finance. This method is more strategic and focuses on creating cash flow, minimising expenses and reinvesting profits.

Structuring your business

How you structure your business will depend on what it is, how you finance it, and your long-term business goals. It will probably take one of these forms: sole trader, partnership, franchise or limited liability company.

Before deciding your structure, ask yourself the following questions:

• Is it important that you limit your personal liability?
• Does your business need to meet any regulatory requirements that may have a bearing on your business structure?
• How important is ease and cost of set-up? One structure may be easier, quicker and cheaper than another.
• Do you have an exit plan? If you do, consider how the structure choices impact on your plan.

The tax and accounting requirements you have to meet will depend on where you operate. Also depending on where you operate there may be government tax incentives so be sure to investigate this. Wherever you are and whatever your business, choosing how to structure your business is an important decision. It is worth seeking professional tax and accounting advice to help you make the right choice.

Conclusion

Becoming a successful entrepreneur isn’t easy. Most successful people will tell you there is no right or wrong way and that to be successful you must be willing to fail. If you have the right entrepreneurial characteristics, the right idea, and you structure your business in the right way, you stand a good chance of succeeding.