Entrepreneur, skills and the opportunity
The overall objective of this session is to have the participant understand the concept of matching an opportunity to his/her particular interests and lifestyles. The session will also look at the skills needed to be successful and the participants will do a skill audit exercise to determine what support they will need for their business venture.
- Finding an opportunity that matches your lifestyle
- Realizing support needs and sources
- Requirements to get external financing
- Your personal skill audit
- Learning to be sensitive to opportunity
Opportunity identification is the process of perceiving wants and needs that are not being fulfilled, and developing a vision of how to fulfill those needs in a manner that is satisfying and profitable for the entrepreneur.
Entrepreneurs are constantly scanning the environment for opportunities to start a business. Many people think they are lucky to find these opportunities but it is actually a planned process that is waiting for the right moment. As an example, if you are driving on a trip and need to go to the washroom, you become very sensitive for opportunities that indicate a washroom is available. In much the same way, entrepreneurs have a good understanding of themselves and so they are very sensitive to opportunities that others may not see. It has often been said that entrepreneurs see “diamonds” where others see “glass”. This is because entrepreneurs see what others also see but think what others have not. This is a trainable skill and the one of the purposes of this session is to get you to be sensitive to business opportunities that are everywhere. More importantly, this session intends to get you to focus on those opportunities that would fit with your particular lifestyle. You need to know yourself before you can begin to look for business ideas.
Entrepreneurship is a commitment, not a job. No matter how good the opportunity and the returns; you must love what you do because otherwise you will not have the commitment necessary to succeed. Entrepreneurs see many business opportunities every day but they will only pursue those they would love to commit to do on a 24/7 basis, otherwise it would be a job not a passion.
Success at the start-up phase is primarily due to the entrepreneur. Ability and the business opportunity are important, but the cause of success in the early phases of a business is due to the attitude of the entrepreneur. The passion, focus and energy that an entrepreneur applies to a start-up are the forces that overcome inertia and get the concept into implementation.
In order to have this power available the entrepreneur should have a vision based on core values rather than just a “good business opportunity”. A vision has the power to focus thinking and motivates beyond the logical, rational process of starting a business.
Core values are beliefs by which you make critical decisions in life. They are your guidelines for decision-making and the basis for all your behaviors. Truth, beauty, honesty, thrift, success, competitiveness, heritage, tradition, love, etc. are all core values.
The importance of core values is the power they have as drivers for business launch. In all instances you see the core values of the entrepreneur evident in the culture of their business. The way the business operates is similar to the personality of the entrepreneur. When the business opportunity can be strongly linked to the core values of the entrepreneur then significant power is developed and that propels the business to success.
Core values also have the ability to de-motivate. This is particularly true in the First Nation environments. Native people have core values of sharing, community and environment. Entrepreneurship is a capitalistic concept whereby individuals, with profit as a driving force (motive), strive to achieve great things. In doing so, they employ others and create an economy whereby everyone does well – the entrepreneur doing the best.
Native entrepreneurship needs to harmonize the individualistic concept of entrepreneurship with traditional Native values of community and sharing. A co-operative entrepreneurship or having the band council create mega opportunities where all can participate could be possible solutions.
This dilemma keeps many First Nation people from being entrepreneurs. In the American culture being an individualistic entrepreneur and having wealth (e.g. Bill Gates of Microsoft) is seen as a positive core value. Others in that culture idolize him and wish to attain that status. In Native communities the same entrepreneur would be perceived as greedy and the community members would reject his/her values.
Another core value that can be a barrier to entrepreneurship is the emphasis on culture and tradition. The Inuit developed Makavik Corporation, a large scale food processing venture which found an upscale market for game meat (Caribou, Venison, Seal, etc.). They had French Chefs prepare specialty dishes with these meats and sold the product to European and North American 5 star hotels that would prepare and sell the meals for high cost. This was working well but difficulties arose on the production side because it was difficult to get the hunters accustomed to the concept of over killing for the export market. The hunters had core values that dictated you do not kill more than you need to feed the local community – preserve nature.
Change is the essence of entrepreneurial activity while core cultural values are often very stable. Fear of losing cultural identity is often a barrier to new methodologies, particularly those that are presented by other cultures. It is not necessary to relinquish cultural identity to use best practices from another culture. A good example of this is the Canadian Hockey Paradigm:
Canada has perpetually been a leader in hockey. Our method of training hockey players was long regarded as the best and a paradigm was established about how this should be done. When the Russians began doing hockey training, off ice, with their feet, Canada saw this as being ridiculous. It wasn’t so ridiculous when the Russians started to produce better hockey players than Canada. Canada has now adopted the new paradigm about training hockey players.
Many cultures adopt the best practices of other cultures without losing their own cultural identity. In entrepreneurship, the best practices model is American (The American Dream whereby anyone can become wealthy and famous with a driving vision and hard work). The end result (wealthy and famous) can be rearranged but there is no denying that America has the best methodologies for entrepreneurship. It does not dilute cultural identity to adopt the American model of entrepreneurship; the Chinese, Japanese and other cultures have adopted best practices in entrepreneurship from the Americans without losing their unique cultural identity. The Americans are most highly culturally identified yet they are constantly adopting best practices from other cultures – without compromising their own. It is important to modify best practice concepts to fit with cultural identity.
It is important to have a strong motivation to pursue an entrepreneurial opportunity. Entrepreneurship is difficult requiring exceptional perseverance in the face of numerous obstacles. If commitment is not 100% the likelihood is that the person will give up. An example of a core value being a strong motive that drives an entrepreneur to success is frequently the devotion to family. When an entrepreneur states the reason they are pursuing an entrepreneurial career is because they want to provide for their family and leave them something then you can be sure they will have the perseverance needed to overcome all difficulties.
Entrepreneurial vision is an image of a better way of doing things that the entrepreneur has visualized. This can often occur when an entrepreneur perceives business practices that go against their core values. Some examples include the mechanic who was frustrated because he couldn’t find an honest repair shop and the two cases in our community (Okwari and Kanata 2000). The entrepreneur then develops a vision to correct the imbalance and is very passionate about making the opportunity work.
The next challenge is to share the vision with others so that they see and believe what the entrepreneur sees. This is often a frustrating and time consuming experience. Funding agencies (Tewatohni’saktha, AANDC, NACCA), investors, customers, employees, landlords and others need to be convinced that the vision is achievable. This is often communicated strongly through a business plan and the visible passion of the entrepreneur for the business.
The culture of the business is a reflection of the entrepreneur’s personality. The business is conducted on the basis of the core values of the entrepreneur. Employees are recruited on the basis of their alignment with the core values and training is also done emphasizing the value sets. The entrepreneur’s business becomes an extension of their personal values and employees begin to model after those values – much like a family.
Establishing a strong business culture enables the business to perpetuate itself beyond the tenure of the original entrepreneur. The spirit of the founder lives on in the culture of the business. That’s why core values and vision are so important at the beginning of a business (as a motivator to overcome inertia) and also as the business develops (to perpetuate the entrepreneur’s vision).
A business opportunity only exists if the following conditions are met:
FIT WITH ENTREPRENEUR LIFESTYLE
The entrepreneur is the driving force behind any business opportunity. The entrepreneur will be dedicating a significant portion of his/her life to this business and he/she should do something that they will enjoy doing. There are many business opportunities that may be successful but the entrepreneur may not like to do the work needed to make them successful.
So, rule # 1 in opportunity identification is to do something that you love to do. Entrepreneurs are often asked how many hours a week they work and their reply is usually, “I don’t know because it’s not work”. Employees
count hours, watch the clock and live for the week-end. That’s because many employees (70%) don’t like the work they do, they only do it for the paycheck. Entrepreneurs will put in many more hours than 40 hours a week and be more energetic because they are doing something they love and doing it for themselves.
Naturally, this means you have to have a good understanding of yourself and the things that you love to do. The first exercises in this session are designed to help you understand yourself so that you can be sensitive to opportunities that match your style.
Every industry has specific requirements that may or may not be acceptable to some persons who are aspiring to be entrepreneurs:
- Retail, for example, requires a willingness to put in long hours in a store and enjoy working with customers, helping them.
- Accounting requires long hours sitting and working with data.
- Other business opportunities may require lengthy traveling.
It is important to realize that every business opportunity will require a commitment, on the part of the entrepreneur, to do tasks that they would enjoy while others would not. For example, not many people would have the patience that a mechanic has when working on a difficult job, nor would they have the tenacity to work in difficult environmental conditions (e.g. outdoors). The mechanic/entrepreneur loves what he does and tolerates the conditions that others would not see as being worthwhile no matter what the returns.
As an example, in the following case study, you’ll notice how Sharon Cross, of Digital Dreamcatchers, used her love of puzzles and crosswords to see an opportunity, after she took a computer course. The computers were similar to puzzles that had to be solved. Sharon loves what she does and has no problem devoting hours to the business. Others may not have the willingness to spend long hours at computer problems. So, even though there are opportunities in the computer field, you have to enjoy the tedious work associated with it.
There has to be a passion for the opportunity on the part of the entrepreneur. Without this “igniter” the fire won’t start and the business opportunity becomes just another job.
MARKET DRIVEN NEED
The second important aspect of opportunity identification is the requirement for the opportunity to be market driven. What this means is that there has to be a gap in the marketplace for the business idea to have an entry point into the industry. Too often entrepreneurs focus exclusively on the “ top down “ approach to opportunity identification, whereby they find the thing they love to do (rule # 1 ) and assume that everyone will like it and pay them whatever they need in order for them to be successful. They ignore competition and neglect to do customer research.
The “ bottom up “ approach to opportunity identification means that the entrepreneur is looking for trends or gaps in the environment that indicate there is a customer need for the product/service.
Let’s look at an example:
Sharon Cross knew that she liked puzzles and games that challenged her to problem solve. She took a computer course and realized that computer programming provided her the same enjoyment she got from solving puzzles, riddles and games. This in itself was not a business opportunity but it was something she loved to do and became the starting point. Sharon was now sensitive to opportunities that would allow her to do what she enjoyed. She could have worked as an employee for a company and become a computer programmer, but Sharon wanted to be independent and develop her own business that she could be in control of. With that as a starting point, Sharon was now sensitive for opportunities that would provide a business opportunity. Her market driven need came about when she saw the popularity of CD-ROM’s ( particularly the mini CD-ROM ) as a multimedia platform for organizations – an electronic, dynamic brochure. So, combining her passion with an emerging market driven need, she created Digital Dreamcatchers. Her love for the work, and the realization that there is increasing market demand, helped her to overcome the inevitable obstacles that would cause others to give up. She is also extremely grateful for the support she received from Tewatohnhi’saktha in the community of Kahnawake. They provided financial support and consulting to help her get through the fragile start-up phase. Even market driven opportunities and passionate entrepreneurs can fail without support at the early stages of a business, when survival is always in doubt.
Sharon also had a “vision” that powers her business. She wants to provide youth in Kahnawake with training and job opportunities in the field of computers. This is her emotional motivator which moves her forward on days when the things are not going well.
Sharon loves to work on the computer, solving puzzles in creating multi-media CR-ROM’s and web pages. She spends a lot of time at the business and enjoys what she does.
The focus of this session is on finding an industry that you like to work in. The next session will look at finding opportunities that are market driven and feasible. A successful business requires five key factors:
1) It has to be a business the entrepreneur will love to do
2) It has to be in an industry the entrepreneur understands
3) It has to be a market driven opportunity ( session 3 )
4) It has to fit with the community ( session 3 )
5) It has to be differentiated from competitors ( session 3 )
Finding what you like to do
The most common areas for business opportunities are:
1) Work – Things that you do for a living. Talents and skills that you have in a particular field
2) Hobbies – Things that you like to do in your spare time ( solving puzzles for Sharon at Digital Dreamcatchers )
Finding out what you want to do in a business environment
Going into business requires much more than just a desire. You need to know the industry you are going into and your role within the business. For example, you may enjoy cooking and be very good at it, but that does not qualify you as being capable of running a restaurant. You need to learn the business and the key roles within the business. An example is Chad Rice of Old Malone’s restaurant:
Old Malone’s Restaurant Case Study
Chad Rice is an electrical engineer. He graduated from University and began his career. He liked to cook in his spare time and at a point in his life decided to start a business of his own, a restaurant in Kahnawake. He started “The Shack”, a seasonal hamburger stand. Once he learned the business he developed “Old Malone’s” an upscale restaurant next to “The Shack”.
Chad learned the industry by starting small. There are inevitable mistakes to be made and he made small mistakes rather than lose everything on a large business to start. Chad also realized that there are two key people in the restaurant industry, The cook and the restaurant manager. Chad became the cook ( a role he loves) and his wife Leslie became the restaurant manager ( a role she loves). The combination has proved to be successful and there are a few learning points from this experience:
1) Start small. Prove the concept works and make your mistakes cheaply.
2) Learn the industry before making a commitment
3) Learn the key roles in the business
4) Determine your role in the business ( make sure it is one you like and can perform well )
5) Find out how you will cover the other key roles needed
Learning the industry
Once you have an industry you would like to enter, you should begin to learn as much as possible about it before starting the business. One way to do this is to get a job in the industry and learn the way that business is done in this industry.
Another method is to research the industry (session 4). We will look at ways to get the information needed, from researching the competition to finding the industry success criteria.
Learn the key roles in the business
Every industry has “key people” who are essential for business success. In the restaurant industry it is the cook and the manager. In the florist industry it is the designer. In the bakery industry it is the chef.
It is important to know the key roles and establish who will perform these roles. Ideally it is you, the entrepreneur; however you often need to have a back-up person. In any event, these key roles need to be filled by persons you can rely on, usually family, friends, and partners.
There is a need to “lock-in” key people so they cannot be taken by others, demand a large pay raise or quit and start their own business to compete with yours. Locking in the key people means to ensure that they stay and perform well. This can be done by:
1) Making them partners
2) Hiring family as key persons
3) Giving performance bonuses
4) Allowing them to buy a percentage of the business
Partners help by providing support and resources, but they usually want to have a say in how the business is run. Not everyone can tolerate partners and very often partnerships can quickly disintegrate. There is something about going in business with a friend that causes problems. Anyone entering a partnership needs a strong partnership agreement to protect his/her interests. Blank partnership agreements, like leases, are available for around $10 at the Bureau en Gros stores.
Family can contribute a lot, they are usually trustworthy and they will work for less money than employees. Since entrepreneurship is a commitment of time, the family needs to at least accept your new business and lifestyle. Many divorces have occurred when an entrepreneur changes the family relationship expectations.
Business Roles and Skills needed
Success is a personal definition. Business success means different things to different people. For some, success means to have a part-time business that provides them some extra money. For others, success is a mega business opportunity that has high growth potential.
The scope of the business will define the importance of the roles and skills required, but every business has to have the following basic skills/roles:
1) Research and Development (R&D)
This function is the creative side of the business. It is the new invention or the unique creation of the artist. Every business needs a product or service to sell. Someone has to design/create that product or service. The creation of the product/service and the continuous improvement is the Research and Development role. Research and Development goes beyond the product/service, however. Every business needs to be innovative/creative in all aspects of the business, not only the product/service.
As an example, consider Native arts and crafts. Some entrepreneurs may only create the products while other entrepreneurs may have retail stores that only sell the products. Although the artist creates the product and should continue to create and improve on the designs, the retailer also needs to have continuous research and development. The retailer needs to find continuous new ways to sell the crafts. Every business needs someone who will be innovative and creative – no business should stand still. Who will be responsible for this function in your business?
Every business needs someone to do the selling. Even the greatest crafts persons need to have their products sold. Often, the craftsperson provides all functions; design ( R&D), Marketing, Production and Finance. Rarely does one person perform all roles well. Growing a business to a significant level requires the expertise of a few specialists and this is often done by outsourcing key functions to external specialists ( e.g. a craftsperson focuses on design and production – their expertise, and a distribution wholesaler sells the product through retail outlets ).
The selling function is an important one. Marketing creates demand and value for the product/service when done properly. Who will be doing the marketing for your business?
Making the product or performing the service is what the customers are paying for. A hairdresser has to have the expertise to style hair; a craftsperson needs to make the products he/she designs.
Someone has to do the production and it doesn’t have to be the designer or the marketer. For example, someone can design a new dreamcatcher, have it produced by a group of employees and sold (marketed) through a local retail store – in this case, three specialists (design, marketing and production) are working to maximize the potential for the product.
Some crafts persons do all the functions. They can design the beadwork, assemble the beads themselves and sell them at a booth at Pow Wow’s. They can do it all but they are restricted by the time they need to spend at each function and they may not like to do each function, nor do them all well.
This function refers to the initial funding of the business and also the ongoing responsibility for accounting and measurement of profitability. A part time accountant often performs this, but the numbers that are compiled must be analyzed and acted upon. The accountant may point out that your cost of goods sold has increased to a point where your profitability is in jeopardy. The entrepreneur must take decisive action on this information in order to avoid serious problems in the future.
Many entrepreneurs do not like to spend time on accounting and, actually that is a good thing. Entrepreneurs are better to spend their time with their clients and their business rather than doing accounting. Also, having an entrepreneur, who is not good at accounting, doing the books, is counterproductive. It would force an entrepreneur to do something they don’t like and it would take them 3 times as long to do it ( and with more mistakes ) than a professional.
It can’t be emphasized enough, however, that even though the entrepreneur does not do the bookkeeping function, they must understand the books and be prepared to make decisions and take action on the areas of concern that
the bookkeeping highlights ( e.g. An increase in cost of goods sold is a result of increase in supplier prices or direct labor if produced internally. This would require the searching of new suppliers, negotiations with existing suppliers or an analysis of the productivity of your direct labor).
Interventions have to be done when the accounting indicates there is a problem. Who will do the accounting? How will the business be financed?
In this session we are focusing on finding the right opportunity for the potential entrepreneur; the opportunity that will fit with the entrepreneur’s desires and abilities. In the next session we will focus on the demand side of the opportunity, the positioning of the opportunity in the industry to establish the market feasibility:
In this session we emphasized:
- The importance of knowing yourself is the first step toward finding a business opportunity
- The need to find an “igniter”, something you will love to do as a business opportunity
- The requirement for a “vision”, a picture of the future state of the business, to motivate and energize others ( share the vision )
- The entrepreneur needs to establish a culture for the business based on core values.
Starting a business is not an easy task. You are creating something from nothing and the task will be much easier if you are doing something that you love to do and have a vision of what you want to accomplish.
Starting a business begins with an emotional passion that the entrepreneur has. In the next session we start to look at directing that passion toward a viable business opportunity that is positioned to be logical and rational.
Exercise # 1
If given a choice to work primarily with one of the following items, which would you choose first, second and third? Why?
(1) I would work with people all day long.
(2) I would work with information all day long. Computer processing, research, filing, reports and other data.
(3) I would work with equipment/machinery. Cooking, mechanics or other functions that deal with being hands-on with machinery
EXERCISE # 2
Core Values and vision
List some core values that you have in relation to your family, community, environment.
Develop a business vision that could address these core beliefs
EXERCISE # 3
This exercise is to determine your preferences in being an entrepreneur. It will provide your motivation for being an entrepreneur and your expectations. There are no right or wrong answers, it is designed to see what would be the right opportunity for you.
Beside each statement, put a number from 1 – 10. ( 1 = strongly disagree with the statement and 10 = strongly agree with the statement ).
_____ I want to make as much money as possible in my business no matter what sacrifices I have to make
_____ I want to be in total control of my business. I don’t want to get so big that I can’t always be in control.
_____ I would like my business to become famous, known by a lot of people.
_____ I want my family to work with me in my business.
_____ I expect to earn more money in my own business than working for someone else
_____ My business will be the most important thing in my life
_____ I expect to work full time in my business
_____ I want to pass my business on to my children
_____ I would not be willing to have a partner with me in my business. I want to make all the decisions myself.
_____ I would be happy with a business that I could do myself and work whenever I want. Money is not that important.
_____ I would prefer to work from home.
_____ I intend to continue to do all the things I do now after I start my own business
_____ I don’t want to spend more than 8 hours a day working in my business
_____ I want to work for myself. I couldn’t work for someone else.
_____ My family is more important to me than the business
_____ I am not going to start a business that requires me to spend my savings or reduce my style of living
_____ I’m expecting my business to be profitable in a few months
EXERCISE # 4
This exercise is to help determine the best entrepreneurial opportunities for you. Again, there are no right or wrong answers. Successful business opportunities should be based on the things that an entrepreneur loves to do.
Beside each statement put a number from 1 – 10. ( 1 = strongly disagree with the statement and 10 = strongly agree with the statement ).
_____ I prefer hobbies that I can do by myself
_____ I’m very well organized, I keep everything neat and tidy
_____ People would say that I’m a very sociable, friendly person.
_____ I’m very good with finances, numbers and calculations
_____ I’m very good at convincing others that my opinions are right
____ I don’t mind spending a long time on one task. I have a lot of patience.
_____ I prefer to work outdoors, I dislike spending time indoors.
_____ I prefer to work on projects with my hands than to think about things too much
_____ I could work with people ( customers ) all day long
_____ I would like to have employees working for me
_____ I like to spend a lot of time with my family
_____ I like a routine where I do the same thing each day
_____ I like to create things ( art, crafts, etc.)
_____ Machinery fascinates me
_____ I like computers, I can spend a lot of time on a computer
_____ I like sports and physical fitness
_____ I enjoy gardening
_____ I’m often going to meetings, parties and friends/relatives
_____ I have a lot of close friends
_____ I love to travel every chance I get
_____ I like to stay home with my family
_____ I like to do things quickly, I’m always in a rush
_____ I always seem to be the one that decides for everyone else
_____ I usually make decisions quickly
_____ I’m very careful with money, I don’t like to spend
_____ People find me helpful and easy going
_____ I love to drive. I’m always going somewhere in the car.
- What are the positive and negative aspects of having the family involved in your business?
- What are some reasons why a person would want to be an entrepreneur? Which of those do you think would “ignite” the entrepreneur to succeed, to generate the energy needed to overcome inertia?
- Name some ways you could be more sensitive to business opportunities in your daily life?
- What differentiates a hobby from a business opportunity?
- Name some paradigms in your life – some habits that you continue to do. Why do you continue? How can you change?
- How can the core values of Native communities be balanced with the core values of entrepreneurship? List the values of each and come up with a sustainable business opportunity to satisfy both.