2 answers
Elijah
Student
Rock Hill, South Carolina
1
Question
Asked
345 views
How do I become a successful entrepreneur?
Where do I start for an entrepreneurship job
Login to comment
2 answers
Jay Almers
Solutions Architect
8
Answers
Mebane, North Carolina
Updated
Jay’s Answer
Hi Elijah!
It is important to note that this is an extremely simplified answer to your question, and putting it into practice is much different than imagining hypothetical situations. However being an entrepreneur is easy and I am convinced that anyone can become one. Ultimately, owning your own successful business depends on a couple basic principals and being able to do them well. The goal of entrepreneurship is to find a solution to a problem and offer that solution to others, better than anyone else. Where it gets tricky is being successful at it. Owning and operating a successful business largely depends on your definition of success, your ability to provide a solution to the problem in a way that minimizes risk and maximizes reward, how much better you are at providing the solution to the problem than your competition, and what kind of drive you have as a business owner to do what is necessary to make your business successful.
Let's use the concept of setting up a lemonade stand as our business. The business is based on the problem of there being thirsty people in your area, and your solution to this problem is a refreshing cup of lemonade. What is your definition of success or goal for the business? Is it that you want to sell 15 cups of lemonade, or is it that you want to eventually expand your market by setting up lemonade stands in other neighborhoods? Both goals require you to have materials (water, sugar, lemons, ice) but you'll need a lot more to support multiple stands. If your costs are $15 per day for a single stand, your costs might be $150 per day for 10 stands. There's more risk with operating 10 stands because you are buying more materials without the guarantee that you will be able to make sales. However, there is potential for greater reward because you are covering a larger territory. This brings us to the next part; how good are you at solving the problem?
We'll stick with just a single stand for now. If your cost is $15 per day in materials and you sell your cups of lemonade for $1 per cup, you need to sell a minimum of 15 cups to break even -- that is, to not lose money in your business. The moment you sell your 16th cup, you have made your business a $1 profit. Selling 15 cups is a lot of work though so to make your business more profitable, you need to adjust some things. Can we decrease our costs on materials? Say we can get a better deal on lemons by buying from a different store and are able to reduce our cost to $10 per day. For the same amount of work, selling 16 cups now makes us $6 profit and we only need to sell 10 cups to break even. That's a great accomplishment -- we have increased our profit without increasing our effort. But, what if we can't decrease our costs? A way to make more profit is to increase our sales price to $2 per cup. We only need to sell 7.5 cups to break even but now you risk losing sales because you are too expensive. This balancing act is a natural part of entrepreneurship and brings us to the next part; how much better are you than your competitors at solving the problem.
Making a better product, whether it be because you use premium materials, or a super-secret recipe is a great way to set yourself apart from the competition but it isn't always that easy. What if your stand is right across the street from a competitor's stand? If you both get your materials from the exact same place, for the exact same cost, and use the exact same recipe, what can you do to win the sale? Are you willing to accept less profit by lowering your price in hopes of having more sales? Perhaps you have better customer service, or decorate your cups with lemon peels as a garnish. There has to be something that makes you stand out from your competitors. Maybe you offer an incentive like a discounted cup of lemonade at a future date with the understanding that your profit will suffer a bit tomorrow in order to make the sale today. All of these adjustments, and your willingness to make them, are directly tied to your drive as the business owner to ensure your success.
Being a successful entrepreneur is dependent on many things that may or may not be in your control, but as with most things in life, "where there is a will, there is a way".
Find a problem that you believe you can come up with a solution for.
Learn about the current impact of the problem, who it affects, and who is trying to solve the problem currently.
Research current and potential solutions and gain an understanding of how much it will cost you to produce and what you will charge.
Understand your audience and market your solution to the target demographic.
Protect yourself from legal and tax implications by forming a business entity such as an LLC or S-Corp.
It is important to note that this is an extremely simplified answer to your question, and putting it into practice is much different than imagining hypothetical situations. However being an entrepreneur is easy and I am convinced that anyone can become one. Ultimately, owning your own successful business depends on a couple basic principals and being able to do them well. The goal of entrepreneurship is to find a solution to a problem and offer that solution to others, better than anyone else. Where it gets tricky is being successful at it. Owning and operating a successful business largely depends on your definition of success, your ability to provide a solution to the problem in a way that minimizes risk and maximizes reward, how much better you are at providing the solution to the problem than your competition, and what kind of drive you have as a business owner to do what is necessary to make your business successful.
Let's use the concept of setting up a lemonade stand as our business. The business is based on the problem of there being thirsty people in your area, and your solution to this problem is a refreshing cup of lemonade. What is your definition of success or goal for the business? Is it that you want to sell 15 cups of lemonade, or is it that you want to eventually expand your market by setting up lemonade stands in other neighborhoods? Both goals require you to have materials (water, sugar, lemons, ice) but you'll need a lot more to support multiple stands. If your costs are $15 per day for a single stand, your costs might be $150 per day for 10 stands. There's more risk with operating 10 stands because you are buying more materials without the guarantee that you will be able to make sales. However, there is potential for greater reward because you are covering a larger territory. This brings us to the next part; how good are you at solving the problem?
We'll stick with just a single stand for now. If your cost is $15 per day in materials and you sell your cups of lemonade for $1 per cup, you need to sell a minimum of 15 cups to break even -- that is, to not lose money in your business. The moment you sell your 16th cup, you have made your business a $1 profit. Selling 15 cups is a lot of work though so to make your business more profitable, you need to adjust some things. Can we decrease our costs on materials? Say we can get a better deal on lemons by buying from a different store and are able to reduce our cost to $10 per day. For the same amount of work, selling 16 cups now makes us $6 profit and we only need to sell 10 cups to break even. That's a great accomplishment -- we have increased our profit without increasing our effort. But, what if we can't decrease our costs? A way to make more profit is to increase our sales price to $2 per cup. We only need to sell 7.5 cups to break even but now you risk losing sales because you are too expensive. This balancing act is a natural part of entrepreneurship and brings us to the next part; how much better are you than your competitors at solving the problem.
Making a better product, whether it be because you use premium materials, or a super-secret recipe is a great way to set yourself apart from the competition but it isn't always that easy. What if your stand is right across the street from a competitor's stand? If you both get your materials from the exact same place, for the exact same cost, and use the exact same recipe, what can you do to win the sale? Are you willing to accept less profit by lowering your price in hopes of having more sales? Perhaps you have better customer service, or decorate your cups with lemon peels as a garnish. There has to be something that makes you stand out from your competitors. Maybe you offer an incentive like a discounted cup of lemonade at a future date with the understanding that your profit will suffer a bit tomorrow in order to make the sale today. All of these adjustments, and your willingness to make them, are directly tied to your drive as the business owner to ensure your success.
Being a successful entrepreneur is dependent on many things that may or may not be in your control, but as with most things in life, "where there is a will, there is a way".
Jay recommends the following next steps:
Judye Byrum
Teaching/Counseling
7
Answers
Tucson, Arizona
Updated
Judye’s Answer
Hello Elijah,
Jay's answer, before mine, is thorough and articulate. You need to choose the business you're interested in and make a plan to accomplish your goal. Nothing happens over night and depending on what you have in mind, you mayweed financing and extra schooling beef you can get your feet wet. Your attitude will play a big part of reaching your dream. How are you going to handle diversity, success and the fluctuations in the economy? There is much to consider but with the right state of mind and resources, you can accomplish anything. Remember that no one starts at the top at the beginning.
Good Luck.
Jay's answer, before mine, is thorough and articulate. You need to choose the business you're interested in and make a plan to accomplish your goal. Nothing happens over night and depending on what you have in mind, you mayweed financing and extra schooling beef you can get your feet wet. Your attitude will play a big part of reaching your dream. How are you going to handle diversity, success and the fluctuations in the economy? There is much to consider but with the right state of mind and resources, you can accomplish anything. Remember that no one starts at the top at the beginning.
Good Luck.