In my previous post, “What does Success mean to you?” we discussed the meaning of a successful venture (is one that meets the goals of its stakeholders).
Although, every venture is different, a set of common factors lie behind every successful business: (Wickham, P.A. (2004) Strategic Entrepreneurship. FT Prentice Hall)
1. Venture Exploits a Significant Opportunity
The opportunity spotted by the entrepreneur is real and significant. The venture is faced with the possibility of delivering sufficient value to a large enough number of customers to make the business viable in terms if income and profits.
2. Opportunity is Well Defined
It must be clear as to why the venture exists and the nature of the opportunity it aims to exploit. Having a ‘Mission Statement’ helps - it is basically a formal statement containing the purpose of the venture (expect a post explaining the mission statement in detail). The trick is not to pursue too many opportunities for your innovation - focus resources on the significant opportunities ONLY.
3. Innovation is Valuable
The innovation behind the venture (i.e. its new way of doing things) must be effective and different from the way existing businesses operate. It must be appropriate the exploit the opportunity identified. All new ideas (no matter how good they are) must be scrutinised in the light of what the market really wants.
4. Entrepreneur brings the Right Skills
The entrepreneur possesses the right skills and knowledge to build the venture to exploit the opportunity. These include knowledge of the industry they are working in, familiarity with the product and markets, general management and people skills like communication and leadership. The effective entrepreneur is constantly refining and developing these skills and learns how to learn.
5. Business has the Right People
Entrepreneurs rarely work alone. The business as a whole must have the right people working for it. Specialists and technical experts will be required, as well as people who will make the product or deliver the service that the business offers. A growing business would require identifying and recruiting the right people to support its growth and this is an important task for the entrepreneur.
6. Organisation has a Learning Culture & its People a Positive Attitude
The entrepreneurial venture must use the fact that it is new, to do things in a fresh and innovative way. It must recognise its experience as an opportunity to learn a better way of doing things. This can only be achieved if there is a positive culture within the organisation, which regards change as opportunity. The entrepreneur is responsible for establishing the culture in their organisation through leadership and example.
7. Effective use of the Network
Successful entrepreneurs and the people who work with them use the network (in which the organisation finds itself) to good effect. They look at suppliers and customers, not as competitors for resources, but as partners. The idea is that all parties in the network can benefit from sharing information and resources and even some of the risk to some extent - but it is up to the entrepreneur to convince customers/suppliers etc of the benefits of the network.
8. Available Financial Resources
Financial resources are critical because the business must essential investments in productive assets, pay its staff and reimburse suppliers. Expenditure is higher than income in the early stages. The business must have enough resources to cover expenditure in this period. Also, more resources will be required in the growth stage. The entrepreneur must be an effective resource manager. He/she must attract financial resources from investors and then use them effectively to grow the business.
9. Clear Goals and Expectations
Clear and unambiguous objectives must be set to provide a benchmark against which performance can be measured. Success can only be understood in relation to the expectations that stakeholders have for the business. The entrepreneur must learn to recognise and manage the expectations of all the venture’s stakeholders.
“Success is not permanent. The same is also true of failure.” - Dell Crossword
This is a great quote for those who are riding the wave of success, as well as those who have tasted failure. Becoming successful is not as difficult as staying successful. Work wisely towards your goals, identify and focus your energy and resources on the right opportunities. People often say, “work smart, not hard”, unfortunately in a new venture you will have to work very hard and smart. No shortcuts!
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