The Kauffman report on The Anatomy of an Entrepreneur: Making of a Successful Entrepreneur had some interesting and detailed findings on the reasons entrepreneurs fail or do well. These can be classified as internal and external reasons.
By Ashna Ambre
Internal reasons are those which fall within the reach of the entrepreneur and depend on him.
Experience: Prior work experience in any sector gives the entrepreneur a practical experience of how a firm runs its operations. Working with colleagues, seniors and even juniors gives a basic framework of management of people, operations and strategic thinking. This helps in the initial starting up process. Success in projects at work and more importantly, failures, help in guiding the entrepreneur on what not to do.
Management teams: One of the most important factor for a business is the team of people that helps in making the important decisions, polices and also knows how to execute them. The responsibilities for such people are huge and there is always a positive relationship between the success of a business and a good team.
Networks: Entrepreneurs must ensure that they build strong professional and personal networks from the beginning. Such networks have the potential to aid the business in many monetary and non-monetary ways.
Education: Many entrepreneurs feel that higher education gives them an added advantage even if the field of study is completely different from what the end up doing. It is the basic addition to the knowledge base, skills and experience which adds value. On these premises, premier league institutes are ranked higher and better.
External reasons are situational factors that entrepreneurs can attempt to reach out to.
Availability of capital: Getting funds at the right time, from the right sources without affecting the flexibility of business models is extremely difficult to manage. For every business influx of capital affects rates and stages of growth, hence its availability is very critical.
Business location: This factor depends upon the nature of the business. Businesses based on e-commerce don’t really bother too much about locations as compared to those that need a good physical distribution network.
Assistance from government: Support from government is primarily expected in the form of creation of a competitive environment for businesses to exist. Also infrastructure needs, taxation rates and policy framework are factors that greatly affect operations for every kind of business.