Entrepreneurs play a vital role in any county’s economy. Let’s take example of Indian Economy. Most of the service sector companies were started at a very small scale by passion driver individuals known as entrepreneurs. In 2009, service sector have 56% contribution in the total GDP. Entrepreneurs working with international clients bring foreign currency to Indian Economy. Furthermore, Entrepreneurs help the society by providing jobs, and/or giving donations. Looking at these benefits, Government also supports entrepreneurs. But there is a significant difference between an Entrepreneur and a small business owner.
Difference between Entrepreneur and a Small Business Owner
“Bada hai to Behtar hai” – Bigger is better. This applies to the thoughts of an Entrepreneur. An Entrepreneur things big, aims higher, and performs bigger. However, a small business owner works the same way and runs his day to day business. Yes, of course; this also applies to the risk factor involved. Entrepreneurs have more risk factor involved in their business than the small business owner.Phases of Business:
Before you get into Entrepreneurial activities with your business, you should have a predefined mindset of the business phases. You will not start getting profits from day one. And it may take few months to get your first deal. In this diagram, there are four phases of business are defined related to Entrepreneurship:
Startup:
- You and your partners will be super excited and very enthusiastic with the startup of the business.
- One common mistake most of the entrepreneurs do is to be over optimistic. They set unrealistic profits in unrealistic time span. No one starts getting business or profits in just one day. So, you’ll have to be patient and give some time to the business.
- Your efforts will be very high in the beginning with least results. You will require proper marketing strategies and customer contacts. Building the business takes time.
- This phase will eat up most of your money and budgets.
- Most of the entrepreneurs back out in this phase only. Because of no income and more expenses.
- Your team might get frustrated and you may be left alone to do your own business.
- No profit, negative cash flow in your financial statements to depress you more.
- “Tough time never lasts, tough people do”, If you can sustain in this phase, you’re there to get a news surprise.
Growth:
- And the surprise you get is your first business deal. :)
- Suddenly you’re able to cope up with all your expenses you made till now, and your net profit figure comes in positive (+ve) numbers.
- Another mistake people make over here is to think they’ve established the business. But, it’s not yet established.
- After your first deal is completed, you again struggle to get the next deal.
- Your efforts again increases and the expenses again eat up your profits.
- But, fortunately, you have one client to refer your name to other clients. The “word of mouth” brings you few more clients.
- Now you can open up the Champagne and have a toast with your partners. Welcome to the business now.
Expansion:
- You can plan your profits to expand your business.
- You get enough clients with lesser efforts than before and you may feel relaxed now.
- But, it’s time to revolve the money in the business. Money once stuck in bank accounts is money lost.
- You should be able to circulate that money. It’s like a snow ball. It becomes bigger and bigger as you circulate it more and more.
- This time you need to define financial strategies for your business.
- You can establish partnerships with other firms (Preferably International Firms).
- You can also reduce your roles and responsibility to the lower level and take control of only higher level of organizational tasks.
Mature Business:
- Once you get into this phase, you need to invent new products for your business.
- You need to have a creative and innovative team to lead your product development department.
- You will have to focus on the updating or discontinuing products with low sales.
- You need to ensure the sustainable growth of the company’s profits.
Advantages and Disadvantages of Entrepreneur
Being an entrepreneur is always passion driven. If you don’t have passion, you should reconsider your decision of being an entrepreneur. In addition to that, you should also be aware of the advantages and disadvantages of being an entrepreneur. Let’s talk about advantages first to tempt you for being an entrepreneur :)Advantages:
- Be your own boss. Make your own decisions and ready to face the consequences by your own (if any :D)
- Excitement Level: if you can have a vision of how much you can earn in future with your business, you certainly have a more level of excitement than being a regular employee.
- Work Smart, Earn More: Decide your own salary. Unlike a regular job, you can earn much more based on your own potential and passion.
- Freedom of work: You have liberty to work at any time you want. You like to work at night? (if you’re not married :D) you can certainly work at night and enjoy the day time. Take your own vacations. Now you don’t have to face your boss for even long leaves.
Disadvantages:
- No startup income: You can earn a healthy package in a regular job. But, if you’re planning to be an entrepreneur, then be prepared for no income in the beginning for at least 6 months.
- Family Pressure: Obviously, if you don’t earn, you will be forced to change your profession.
- Social isolation: Entrepreneurs usually are so involved with their business (in starting phase) that they don’t get time to nourish their societal network and relations. Usually, it ends up in making consequences with family and friends.
- Extra burden: This is your own business now. You will work extra than you might work in any regular job. You will also have to make your own decisions. So, always have a burden of outcomes of your decisions.
So finally, what does it takes to be an Entrepreneur?
After reading entire article, I’m sure you must be double minded :). Now it totally depends upon you. Ask yourself the following questions. If you can answer them positively, you can be an entrepreneur:- Do I have the driving force (Passion) to be an entrepreneur?
- Do I have the right vision? (Don’t check your eyesight here :D). Can I visualize where I will be after 5 years (realistically)
- Am I ready to face the consequences of not having a salary in the beginning?
- Can I sustain the startup phase?
- And probably the most important question.
