3. Success, failures, myths and mistakes of entrepreneurship. Flashcards
What are the (6) factors that Contribute to the Success of Entrepreneurs?
(a) Know your business in depth
(b) Develop a solid business plan.
(c) Manage financial resources.
(d) Understand financial statements.
(e) Manage people effectively.
(f) Know your strengths and weaknesses.
Know your business in depth means…
- To know your areas of strengths/ areas for development
- To be able to identify weak points in the business and fix them
- Have monitoring systems
Why is it important to Develop a solid business plan?
- You have to have done some sort of market research
- You have a plan that can guide you as the business progresses
To Manage financial resources means?
- Manage your cash flow properly.
- Keeping note of all your financial transactions.
- Having enough cash to meet your day-to-day expenses.
To Understand financial statements means?
- Have an understanding of what it is telling you.
- Knowing whether the business is making a profit/ loss
- Knowing what is the level of risks in the business: Whether the sales costs or production costs too high etc.
- Understanding what can be improved financially
To Manage people effectively means?
- Learn how to communicate effectively with them
- Learn their skills, strengths
- Know how to motivate employees
- Consider employees as a resource and not burden
To Know your strengths and weaknesses means?
- Personally know your strengths and weaknesses
- Know what you can/ can’t do
- Being willing to learn how to do it or put yourself in a position to be able to get someone who can
What are the (6) factors that Contribute to the Failure of Entrepreneurs?
(a) Not knowing your business in depth
(b) Not developing a solid business plan.
(c) Not managing financial resources.
(d) Inablity to understand financial statements.
(e) Inability to manage people effectively.
(f) Not knowing know your strengths and weaknesses.
What are the (5) mistakes of entrepreneurs?
- Human Resource HR/Management failures
- Operation failures
- Marketing failures
- Financial Failures
- Failure as a natural part of the entrepreneurial process
Human Resource HR/Management failures refers to
- Lack of leadership, judgement and knowledge, lack of experience.
- Unable to communicate well with workers
- Poor leadership style
- Inability to understand workers
- Inability to motivate workers
- Lack of performance management (no proper performance appraisal process in the business)
Operational failures refer to
poor inventory management; poor planning.
-What happens in business day to day
-Incorrect Inventory management/planning.
(Stock outs = persons will say you don’t have and go to the competitor OR too much stock on hand= storage costs, expiring goods,)
-Improper layout of the business. It affects how the business operates on a day-to-day basis and efficiency.
-Customer interaction
-The efficiency with which operations take place
-Loss leader vs South leader
Marketing failures refer to
Deals with the 4 p’s of marketing- PLACE, PRICE, PRODUCT, PROMOTION
- Poor Marketing Strategy
- Lack of market research- producing a product that nobody wants
- Bad pricing (too expensive because of the cost of production/ too cheap because of its bad quality items)
- Terrible placing = distribution issues
- Luxury item= high quality, only available to a few*
- Promotion- bad advertising, poor public relations, personal selling and sales promotion
- Weak marketing strategy; uncontrolled growth; poor location; incorrect pricing.
Financial failures refer to:
- No knowledge of the basics of financial statements
- Not keeping proper financial records
- Poor financial control; inadequate record keeping.
Failure as a natural part of the entrepreneurial process refers to:
- easily swayed
- inability to face a challenge and not give up
Myth or truth? : “Entrepreneurship ventures and small businesses are the same thing”
Myth
