Author: Jim Riley Last updated: Sunday 23 September, 2012
An entrepreneur is defined as someone who has the ability to take risks and organise the factors of production. When starting a new business the entrepreneur faces a number of problems before they can start up. They need an idea and a will to succeed, but these are not enough on their own to be successful.
A business needs:
Finance – to fund the other elements listed below: finance is usually the hardest thing to obtain in a start-up business.
Labour – to help develop a product or service and then to produce/deliver it.
Customers – without them, the business will fail. Obtaining customers means the business must undertake marketing.
Suppliers – provide many of the “inputs”, such as raw materials.
Premises and equipment – maybe a simple office, or possibly a large, modern factory; depending on what the business activity is.
Management organisation & structure – this is often very simple at the start-up stage (e.g. a sole trader!).
Designed, researched and tested product or service – a successful business is about more than just having a good idea – the product needs to be brought to the marketplace in its best format. Dyson spent many years completing his first vacuum cleaner before being able to sell it.
A business may also need to protect its idea or products.
It can do this through:
Copyright and patents make it illegal for other firms to copy directly the business idea or invention.
Keep new products and services secret until they are ready for launch.
Focus on retaining key staff that would be otherwise valuable for competitors to poach!