It is a very common question for people to ask each other, whether in a business or casual setting, "What kind of business do you work in?" While this very broad question does open up doors for you to describe your industry, company and perhaps product line you work closely with, it doesn't say very much about how this was brought to be. For an entrepreneur, the question of "What kind of business are you in?" will often fall short to describe the work they are actually doing. The question, "How do you do practice business?" or "What stage is your business at right now?" would be more apropos. The primary reason for this distinction is that entrepreneurs have to work through a process when forming a new business. To be a successful entrepreneur, focusing on Process Orientation is crucial.
Process Orientation is as simple as understanding that the process is more important that the end result. When starting a new business, even if based on an opportunity you're very confident in, you must work through the process of bringing your idea to market because there is great potential for the market to change or new competitors to enter the industry that will change your approach. You can never take the marketplace for granted as it is constantly being updated and saturated with new products and ideas. However, if focused on the business process instead of one idea or one end goal, you always ensure that you are fully aware of how to help your business succeed.
Here are some steps that you typically see entrepreneurs work through:
1) Idea and Opportunity Recognition
Entrepreneurs are constantly evaluating the market around them to creatively form ideas and recognize potential opportunities.
2) Market Analysis
Taking time to analyze the market will show you a few things; what stage of growth the industry is in your working to join (how long is your window of opportunity), what % of market share you could expect to get with your new idea, and if there are any other holes in the market for your product to fill. This is the stage in the process where most ideas are determined to be un-profitable.
3) Gathering of Initial Management Team
This is a small group of core individuals that are working to build the business from the ground up. While it is obvious you should choose wisely, it is important to start thinking at this stage about building a well-rounded team as this will only help you later when working to impress potential investors.
4) Write Business Plan
While the management team may feel confident in their direction, taking the time to write a business plan is crucial to confirm that your initial analysis of a valid market opportunity can be communicated successfully to investors.
5) Bootstrap for Initial Prototype and Market Analysis
Gathering the resources of the management team to prototype and re-do market analysis after a small segment has experienced your product/service as a twofold effect: true data about how your customers feel about your product and a greater leg to stand on when presenting to new investors.
6) Presentations to Investors
Taking everything you’ve worked on so far and trying to encourage others to invest. This step is critical to success in bringing your business from a start up to the next level.
7) Expand Operations using Investor Capital
Once funding has been received, work with investors to move forward on steps initially laid out in investor presentation. Depending on the nature of the deal with your investors, you might have to tweak your product or approach at this point to consider their role.
8) Continue to Re-evaluate Product and Business Plan
Once your product/service has been released you should be continuously evaluating the market and if your business is positioned effectively to continue to grow in market share. It is important to not get stuck in your ways and ensure you update business plan as needed to move in the right direction.
9) Grow and Meet Financial Goals
Evaluate your business position often to see if you’re meeting your investor commitments as well as to see how your changes affect revenue and profit over time. Ensure if an idea isn’t working that you do not waste too much time waiting for it to work itself out.
10) Break Even and Earn a Profit!
If your idea and opportunity are sound and you successfully navigate the market to make your business successful, ideally you will see continued revenue growth and break even or earn a profit after 2-3 years of sales.
As you can see, nowhere in this process is the entrepreneur able to rely on others or on a core business to fall back on. This is why focusing on the process to ensure every step of the way that you are working on a successful opportunity is the only way to succeed as an entrepreneur.