The Questions Every Entrepreneur Must Answer Of the hundreds of thousands of business ventures that entrepreneurs launch every year, many never get off the ground. Others fizzle after the spectacular rocket starts.
Like most entrepreneurs, there are some prerequisites for sustainability:
- Diversify your product line.
- Stick to your knitting.
- Raise capital by selling equity.
- Don’t risk losing control just because things are bad.
- Delegate.
- Act decisively.
- Hire a professional manager.
- Watch your fixed costs.
Some questions that an entrepreneur needs to ask for scaling are:
1. Clarifying Goals: Where Do I Want to Go?
The questions an entrepreneur can ask for this are: What kind of enterprise do I need to build? What risks and sacrifices does such an enterprise demand? Can I accept those risks and sacrifices? Is the strategy well defined? Can the strategy generate sufficient profits and growth? Are my goals for growth too conservative or too aggressive?
- An entrepreneur’s personal and business goals are inextricably linked.
- Whereas the manager of a public company has a fiduciary responsibility to maximize value for shareholders, entrepreneurs build their businesses to fulfill personal goals and, if necessary, seek investors with similar goals.
- Before they can set goals for a business, entrepreneurs must be explicit about their personal goals.
- They must periodically ask themselves if those goals have changed. Many entrepreneurs say that they are launching their businesses to achieve independence and control their destiny, but those goals are too vague.
- If they stop and think about it, most entrepreneurs can identify more specific goals.
2. Setting Strategy: How Will I Get There?
The questions an entrepreneur can ask for this are: Is the strategy well defined? Can the strategy generate sufficient profits and growth? Is the strategy sustainable? Are my goals for growth too conservative or too aggressive?
- Many entrepreneurs start businesses to seize short-term opportunities without thinking about long-term strategy.
- Successful entrepreneurs, however, soon make the transition from a tactical to a strategic orientation so that they can begin to build crucial capabilities and resources.
- Ventures based on a good strategy can survive confusion and poor leadership, but sophisticated control systems and organizational structures cannot compensate for an unsound strategy.
3. Executing the Strategy: Can I Do It?
The questions an entrepreneur can ask for this are: Do I have the right resources and relationships? How strong is the organization? Can I play my role?
- Great ideas don’t guarantee great performance.
- Many young companies fail because the entrepreneur can’t execute the strategy; for instance, the venture may run out of cash, or the entrepreneur may be unable to generate sales or fill orders.
- Entrepreneurs must examine three areas—resources, organizational capabilities, and their roles—to evaluate their ability to carry out their strategies.
To know about each strategy and questions individually, please read the entire article: https://hbr.org/1996/11/the-questions-every-entrepreneur-must-answer?registration=success
