The importance of identifying a sustainable business idea, with a practical and realistic business plan to support it cannot be overemphasized, especially for a start-up company. Many government and private sector interventions aimed at encouraging young entrepreneurs to set up their own businesses are predicated mainly on a good business idea and a well written business plan with sufficient experience to defend it before a panel of ‘experts.’ But what do we see? Only few applicants meet the shortlisting requirements and eventually get supported, while many others are frustrated and sometimes even doubt the integrity of the selection process.
Consequently, the number that benefit from support programmes are not enough to make the desired impact in the economy. I can tell you that many business plans are written and submitted to banks and other funding agencies on a regular basis, solicited and unsolicited. These plans, according to their authors, are filled with tantalizing ideas for new products and services that will change the world and reap millions of dollars within a short period. But the fact is, without entrepreneurial mindset and execution skills, it is difficult for any new idea to be turned into a profitable and sustainable business.
WHERE WE ARE
There is a lot of hype on the need to discover your talent and passion in order to identify a good business idea. Several workshops and competitions, free and paid, on entrepreneurship, business ideas, business plan, employment generation, are organized by government and private sector organizations. Along the streets, you find ‘ready-made’ business plans for sale for all kinds of businesses. Every youth claim to have an idea waiting for money to convert to business, but cannot get money from banks or even from families and friends.
Apart from collaterals, banks complain that there are no viable start-ups to fund with money set aside for small businesses. In a typical production business plan, the first three factors of production – land, labor and capital – are usually articulated, but not much is written on the fourth factor of production – entrepreneurship. Entrepreneurship is not management and this is the crux of the matter. The inability to convincingly demonstrate appropriate entrepreneurial mindset required for success is probably one of the main reasons many ideas and proposals are not supported by funding agencies.
The entrepreneur is an individual who takes an idea and turns it into a business with profit motive by combining the other factors of production and prepares to take the associated risks and rewards. It is noteworthy that some people are naturally more disposed to take risk than others. Although entrepreneurship can be learned, encouraged and nurtured, there will be some that cannot or will not want to take risks.
I have attended several seminars and capacity building events on what it takes to start a small business and succeed. The majority of participants at such seminars and events look for opportunities for businesses they can set up to make money as quickly as possible because they are either unemployed or unemployable. The motive is far from entrepreneurial. And when they hear that they need to be patient to nurture the business for some time before reward, they are easily discouraged.
Many people want to be their own bosses without an understanding of the initiative and risk involved. This is probably why real innovative and creative entrepreneurs who are prepared to start new businesses or modify existing businesses are in short supply. Yet, they are the ones that should access funds to create businesses that can employ people and reduce unemployment.
Everybody can be an entrepreneur, but not everybody is an entrepreneur. Therefore, if you are enticed to start a new business with incentives, grants and low-interest loans without mindset transformation process for successful enterprise, then you may be putting the “cart before the horse.” In the last few months, I have come in contact with several persons, including those in employment, who are desperately in search of what business to go into.
Whether you have an existing business or are getting ready to start a new business, one of your most pressing priorities is how to develop and strengthen your entrepreneurial mindset.
There are two basic mindsets that shape our lives; fixed and growth mindsets. Which mindsets you have or cultivate depends on your belief system. According to Carol Dweck, in her new book, ‘Mindset: The New Psychology of Success,’ changing our beliefs can have a profound impact on nearly every aspect of our lives.
People with fixed mindset believe that there are some things that cannot be changed in any meaningful way because of their nature and the circumstances around them. Consequently, they see obstacles and failures as final destinations and not temporary setbacks that can be overcome through charting other routes. They are discouraged by challenges and complaints of others and find it difficult to think ‘outside the box.’ For example, you hear comments like: “Establishing a nursery school in my area will not be a good business because there are many nursery schools already;” “You cannot make it as a hairdresser because of the cost of running generator since there is no electricity most of the time.” The fixed mindset prevents you from looking for new opportunities and new solutions to business problems.
People with growth mindset believe you can be good at anything, because your skills and abilities are largely due to your efforts and actions through practice and continuous learning. The hallmark of the growth mindset according to Carol Dweck is “the conviction that human qualities like intelligence and creativity, and even relational capacities like love and friendship, can be cultivated through effort and deliberate practice. Not only are people with this mindset not discouraged by failure, but they don’t actually see themselves as failing in those situations — they see themselves as learning.”
IT IS UP TO YOU
Although people may differ in their initial talents and aptitudes, interests, or temperaments, everyone can change and grow through practice and experience.
There is no doubt that our beliefs about our own abilities and potentials can influence our behaviors and predict our success in business. If you think you can, or you can’t, you are right in both cases, depending on what you believe. Entrepreneurship requires self-confidence and growth mindset in order not to be discouraged by challenges and difficulties in the business world, especially in the world economy of today.
Do you have entrepreneurial mindset to succeed in that business you want to go into? The success of entrepreneurs depends, to a large extent, on their positive perception towards business failures, business challenges, criticism, mistakes in business and life in general. Therefore, if you want to succeed as an entrepreneur, you need a change of mindset.