Yesterday I was in Bremen for my first Entrepreneurship workshop. I had heard of them ever since my undergrad but I was never that interested in it back then. I thought, I was going to be an academic, not a businesswoman.
Then I started reading Rich Dad Poor Dad. I haven’t finished it but it has changed the way I started thinking about money. Wouldn’t it be nice to set up a business and have it running on the side as you do your own thing which might not necessarily pay you? Of course it is no where as simple as that. The few I know who have tried to start their business have worked 25 hours a day 8 days a week for several years and even then it tends to keep a firm hold over their life.
Nevertheless, curiosity must be satisfied. Here is what I learnt:
The qualities that make a good scientist are similar to those that make a good businesswoman.
Patience, curiosity, flexibility, analytical thinking, enthusiasm, conviction, persistence, communication skills, creativity, being able to manage time, set realistic expectations, find sources of funding and handle publication or public relations. They would both have to keep track of competition and what else is happening in the field which may affect their work and impede their gain of currency. The primary difference seems to be in the currency. For a scientist, papers published and number of citations matter a lot more than money. Another difference is that a businesswoman would have to think in terms of her customer’s needs in way that would make money. She would also have to be more connected to reality, keeping up to date with the larger economic and political trends.
Secondly the importance of teamwork was emphasised. Apparently even if one has a brilliant idea, with a bad team it would never succeeded and the converse is true too. With not such a great idea but an excellent team, it would spring to life.
Then we were told about IP (Intellectual Property). We had studied this in Environmental science but back then we hadn’t been told the differences between the types, nor that putting a picture of certain protected buildings on your home page was considered an infringement. I was slightly appalled at how much freedom of photography it takes away. Apparently there are lawyers out there just to catch and fine people who do this. They live off such infringements by those who don’t know any better.
We were also warned about how any idea which one wants to patent needs to be original and unpublished. Just in case one got it from somewhere or someone else. So one MUST file for a patent BEFORE one publishes.
After a coffee and biscuit break we came back to discuss ideas we did have. Understandably several people hesitated to share just after a scary lecture on people stealing each other’s ideas 🙂 We were told about NDAs (Non Disclosure Agreements) which is the adult and legal way of asking someone to keep a secret so that it would be punishable by law if they betrayed your trust and used the idea themselves or gave it to someone else. Then we discussed the viability of a business idea:
Customers must be willing to pay for it.
The pricing policy must be optimal.
It must beat its competition in some important way.
A business idea’s viability is the product of the service and the revenue system.
The following are the fundamental elements of a business:
Partners, Key focus, Value proposition (which is a complex way of referring to what it is you are offering to do), Channel (how you plan to reach the customers), the Customers themselves, Costs and Revenues.
When you submit a grant proposal, to use an academic term, one must first be convinced his/her idea is great. The Summary, which is the most read part of the proposal, must contain
1) who you are
2) what you plan to offer
3) why? and to whom?
4) why the timing for this service or product is perfect
5) you strategy
6) how you can compete effectively against existing and future competitors
7) the talents and qualification of you team
In the first section, the history of your idea, the objectives, model and market area, starting point, your core competencies and of the management team must be covered.
To emphasise the strengths of your team a section on your own and their credentials and quality would be useful. You would also need to present here a believable strategy.
The section on the product or service would focus on a detailed description of it and what the requirements are, and how it is different to the competitors who are already on the market. This part would also need to include how you plan to protect your IP and how you intend to stay above your competitors. Then the end would be to describe how far along the process you have already managed to reach and what you believe to be the next steps.
The section on the Market would need to define the target population, how you intend to reach them and what you are selling to them. This section would include all the market research you have done and your assessments of the competitors. And possibly the future vision of the company and the needs.
The final section would be a Financial Forecast. Translate everything you have written so far into numbers for the next 3 to 5 years including possible profit and loss statements. There will be subsection here which covers liquidity planning. This means, what you intend to do in case you go bankrupt out of unforseen circumstances. And it would conclude with capital requirement and the financial concept developed so far.
Using this basic plan it is possible to develop a business idea into a business plan.
The next step is to know where to go to apply for an initial fund. This would vary from country to country. Several governments and associations give grants to promising applications after you defend it in front of a jury. Sometimes a bank loan is the only way to start.
It is now clearer to me why it is such a massive undertaking to start a business. Money, an exemplary core team and a fantastic plan and structure are key elements to start. And perseverance and staying inspired seem the qualities that would keep you on track.
The strategy would include what your first steps are.