Success Factors

SUCCESS FACTORS of

Entrepreneurs By Francis A. Balagtas

Key Success Factors

Skill Expertise & Aptitude

Personal Qualities

Managemen t Skills

External Factors

Know your….. Strengths •Positively applied

Weaknesses •personal development •attending courses •appointing staff and/or experts to compensate where needed

Key Success Factors

Skill Expertise & Aptitude

Personal Qualities Management Skills

External Factors

1. The Skills, Expertise, Aptitudes (SEA) of an Entrepreneur

Skills

- refers to manual work and can be learned e.g. an electrician, a hairdresser or cabinetmaker Expertis

e - is based on knowledge you acquired by

studying and/or experience. Experts in the field e.g. taxation, computer systems and

Aptitude - Each person is born with aptitudes and

talents. Some are artistic, some have talent for communicating and others have flair for

Technical thinking

(A)

Draws furniture

+ Knowledge of antiques (E)

Restores antique furniture

+ Cabinet-maker

Design and installs kitchens (S) and built-in cupboards

Artistic

(A)

Pr d u s s lls rt

d/ r

+ Experience in jewelry design

(E)

Designs jewelry

+ Apprentice in jewelry manufacture

(S)

Manufactures jewelry

2. The important personal characteristics of entrepreneurs a. Perseverance b. Commitment to the business c. Involvement in the business d. Willingness to take risks e. Sound human relations f. Creativity and innovative ability g. Positive attitude and approach

a. Perseverance

“They do not lose heart when they make mistakes or fail but they have intense determination to complete a task.”

b. Commitment to the business •using their own money to establish the business. •working long hours in order to succeed •accepting a lower standard of living and possibly earning little or no income until his bus. becomes successful.

c. Involvement in the business “They are personally involved. They are aware of everything that is happening on his business.”

d. Willingness to take risks “They take calculated risks. It should not be too great nor too low.”

e. Sound human relations

“They realize that they cannot be successful in isolation but in long-term relationships.”

f. Creativity and innovative ability “Effective entrepreneurs take the initiative to solve problems in a unique manner.”

g. Positive attitude and approach “They are able to identify opportunities even in adverse and difficult situations.”

3. The important functional management skills of entrepreneurs

External Relations Functions

Admin Functions

Marketing Functions

General Manageme nt Functions Production / Operationa l Functions

Business Functions

Human Resources Functions

Financial Functions

Purchasing Functions

Important aspects of management skills: a. Planning a business before it is established b. General management skills and the use of advisers c. Customer service d. Knowledge of competitors e. Market orientation f. The importance of quality products or services g. Accounting for your own purposes h. Insight into expenditure, income, profit and loss i. The ability to use income wisely

a. Planning a business before it is established • drawing up a business plan - identify problems early on

General Manageme nt Functions

- consider all important factors concerning intended business - take decisions for the future

Marketing Functions

Production / Operationa l Functions

- opportunity for testing ideas Financial Functions

b. General management skills and the use of advisers • know what is needed for success

General Manageme nt Functions

• appointing/hiring a trained staff / expert

Human Resources Functions

c. Customer service

Admin Functions

•after sales service •attention to details •serving refreshments when client visits •attractive premises •user-friendliness

Marketing Functions

d. Knowledge of competitors • who? • how many? • size?of operations? • which segment of market they control? • your edge?

External Relations Functions

Marketing Functions

e. Market orientation •who is your target market? •developed products and services to satisfy the clients requirements •opposite of product-oriented

Marketing Functions

f. The importance of quality products or services • Quality = Costs • Quality ≠ Expensive • Cost must be kept check w/o affecting the quality of goods / services. • Quality = Marketing

Marketing Functions

Purchasing Functions

g. Accounting for your own purposes • able to understand their own accounting system

Admin Functions

Financial Functions

h. Insight into expenditure, income, profit and loss • distinguish between income and profit

i. The ability to use income wisely • exercises financial discipline • don’t waste money on unnecessary personal luxuries and status symbols

4. Dealing with external factors that affect entrepreneurship Fluctuating interest rates & customer spending power Exploit technological developments Identify opportunities for growth in market Opportunities after political adjustments and events Use of alternative raw materials Expand and establish business in another country

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