The Journey of an Entrepreneur
Entrepreneurs are a rare breed. We all know that entrepreneurship is the road less travelled due to the costs, risks, and challenges that come with it. However, as we know, risk and reward are related; with greater risk comes the potential for greater rewards. Entrepreneurs are vital to our economy and its growth, the creation of jobs, and can create financial freedom for themselves and build their own schedule around their lifestyle needs.
Is there a secret sauce to becoming a successful entrepreneur? Hard work and dedication are necessary requirements, but a sometimes overlooked aspect is careful planning. One can never predict exactly what is going to happen in the future; however, one can diligently research and strategically plan to sustain themselves in the long run by keeping up with the constant changes in the world, the economy, and consumer tastes. The most important step in starting this entrepreneurial journey is to deeply enroot yourself into the Entrepreneurial Mindset.
Entrepreneurial Mindset: Know Your Market & Product
So, you have a great idea for a product – something that’s bound to capture the hearts and minds of consumers everywhere. Or maybe you’ve discovered a service that isn’t being offered by anyone else – one that’s desperately needed. Excitement and adrenaline are flowing through you – and you’re ready to go. Full speed ahead!
But wait – before you dive in, you must determine whether there really is a market for your product or service and need to figure out if your plan needs any fine-tuning. Quite simply, you must conduct market research. Many business owners neglect this crucial step in product development either because they don’t want to hear negative feedback, do not want to tamper with the product/service because in their eyes it’s already “perfect,” or because they fear that the market research will be too expensive. Aspirational entrepreneurs can sometimes be so excited and ambitious to get their product to the market as fast as possible; however, failing to do market research can amount to a death sentence for your idea.
Before you start your market research, it’s a good idea to meet with a consultant or to talk to a business or marketing professor at a local college or university, but as a rule of thumb, market research should provide you with information about three critical areas:
- Industry information
- What are the latest trends? What are areas of the industry that appear to be expanding and what areas are declining? What technological developments are affecting the industry? How can you use them to your advantage? Is the industry catering to new types of customers? The key here is a finding a thriving and stable industry as you do not want to start a new business in a field that is on the decline.
- Consumer Close-up
- Your market research could also include a market survey, which will help you make a reasonable sales forecast of your new business. First, you need to determine the market limits or physical boundaries of the area(s) in which plan to do business. You must study the spending characteristics of the population. You may be able to build estimates of your potential customers’ purchasing power based on the area’s per-capita income, its median income level, the local employment rate, and other demographic factors.
- Another item to consider is developing an estimate for how much total sales volume you can reasonably obtain.
- Competition Close-up
- Based on a combination of industry research and consumer research, a clearer picture of your competition will emerge. Do not underestimate the number of competitors out there and keep an eye out for potential future competitors as well as current ones. Examine the number of competitors on a local and national scale by studying their strategies and operations. Your analysis should provide you with a clear picture of potential threats, opportunities, and the weaknesses and strengths of the competitors in your industry.
- After completing this review, you can focus on your unique value proposition that your idea provides.
How You Can Help the Economy as an Entrepreneur
To continue this discussion, we also we wanted to spend time reviewing the positive impacts entrepreneurship can have on the economy and your community during your journey as an entrepreneur.
- Job Creation
- Entrepreneurs have a positive impact on employment. By creating your own business, you are contributing to the source of the creation of the most new jobs in the United States. The establishment of new businesses and jobs boosts demands and economic growth. Furthermore, as new technologies emerge, there are further opportunities to create even more jobs to leverage these new tools. Entrepreneurship creates new opportunities for workers to learn skills and to advance their careers and can create opportunities for those who may been struggling to find employment.
- Help Develop and Improve your Industry
- Entrepreneurs boost economic growth by introducing innovative technologies, products, and services. Entrepreneurs find areas of weakness in the way established businesses have run their companies, or weaknesses within product/service itself and use it an opportunity to implement their innovative ideas. Entrepreneurs are the competitive push that propel industries to constantly develop and improve products and services for consumers.
- Promoting Social Change and Innovation – “Be the change you want to see in the world.”
- One of the most beautiful aspects of being an entrepreneur is that you get to be your own boss. And as the boss, you have the opportunity and power to make decisions that are focused on fostering growth and culture within your team and business, and you have the power to make decisions that can make a social impact on your community. Social innovation unlocks solutions to environmental challenges and spearheads efforts to create sustainable practices. You can serve as a role model for your culture and for the next generation of entrepreneurs in your community. With success and increased prominence, you can inspire the youth to make positive changes in their respective circles. These are all positive impacts that can be created by your entrepreneurial efforts.
Why Do Entrepreneurs Need Financial Planning?
It is impossible to know how the future will unfold, and there will be a lot of uncertainty throughout your journey as an entrepreneur. The road of entrepreneurship is a tough one, but it won’t feel so lonely with a Certified Financial PlannerTM by your side. In times of turbulence and uncertainty, we act as accountability partners and serve as a sounding board to help our Clients achieve their goals in line with their vision for their lives. And with a CFP® on your team, you don’t have to walk your path alone.