Knowledge, networking, influence and finance. The building blocks of entrepreneurship

 An entrepreneur is a person who has possession of a new enterprise, venture or idea, and assumes significant accountability for the inherent risks and the outcome. He or she is an ambitious leader who combines land, labor, people and capital to often create and market new goods or services. The main resources of entrepreneurship in this age have been considered to be finance, knowledge and contacts. A debate is on, over which is the most superior among the three. Often knowledge or information has emerged as being the most touted, but no one can set up an enterprise without money!  Knowledge is capital?
Many theorist like to describe exclusive or specialized knowledge of a product or service as capital.

The three elements of intellectual capital 

 

1.         Human capital-knowledge, skills and 

             abilities the employees in an

             organization.

2.       Social capital-the stock and flow of knowledge derived from networks of relationships within and outside the organization

3.       Organizational capital- the institutional knowledge possessed by an organization which is stored in  databases. 

             All of this cannot be quantified as such knowledge in itself if its channeled rightly can lead to an abundance of wealth, although on the other hand, when its not handled properly, it might not work out the right way. 

             Are you just looking at the money side of the business and ignoring the intellectual capital? Perhaps its time for you to start checking  the capital to ensure that you are building a business that is rounded on all fronts. Knowledge is one of the most important parts of the investment of a business, if you have all the money you need for a business and you don't know what to do with it then there really is a problem. 

            Every business needs an ideas person that would help the business flourish with new strategies and ideas that could keep the business going. More than ever before, various business sectors are need of ideas and trends that would enable them market their competitive advantage and thereby give them an edge over other businesses that belong to the same sector. 

            If you business is just among the crowd of the same kind, you ought to push to make a difference and see what you can do to make yours stand out of the crowd. Experience has shown that the big businesses that have the money to push their products are not always the best. We are live in age in small Davids would trounce Goliaths in the competition and outlook since the small people have a way of keeping over heads low and maximizing profit simultaneously. 

             Networking is important

            Beyond the use of ideas and intellectual capital to   trounce  the competition, businesses need to be able to leverage  on some of the other abilities available to them include the ability to use modern tools of networking both at the social level in the physical as well as with the use of social media in the virtual.  How many people can you reach and convince to use your product? We should never forget the power of perception.  Nobody opened the best shop in town and stayed there hoping that people will come at their own accord. Sometimes we have to go town with our product or service and get as many people interested as possible.Smaller companies and organizations may not have the funds to maintain large campaigns in the industrial media, the widely circulating newspapers, magazines  as well as the radio and television; but they can compete effectively for the attention of their customers on the social media through advertising that is channeled directly to their customers through a study of the customers' habits online. 

who can influence your buyers?

Beyond the knowledge of the product is the ability of the business to contact people that they can use as influence in promoting the business. There are always "influencers" available to tap a following from. There are certain groups of people who can change the fortunes of a business merely by tweeting or face-booking about it. Such tweets have been known to sway the focus of the buying public towards a product and perhaps swing such attention away from another business.  Aside from getting people to promote our products for us, we can also use their names subject to an agreement  struck, on the board of the company. When people of influence and integrity have their names associated with certain businesses, it confers a level of public trust and confidence on the company concerned. 

Having considered all of this its important that we discuss cash. Most entrepreneurs are concerned with the sources of cash or finance to run their business: Five sources come to mind:

     Banks- A lot of people are cynical about the financial institutions as a source of finance for a business. Generally it might be difficult to get money out of a bank to finance a business, but it can be done if we prepare for it. Banks are willing to lend people money, but the question is: how prepared are people to take the money and return it before or within the specified period of time? Banks like to see a history of cash flow. So if you are running a business and you intend to take a loan in the nearest future, make sure that you have some kind of cash flow with the bank. That is frequent depositing and withdrawal of money; If you don't use the bank to keep your money, make sure you have records of everything you have spent and all the income that comes in. The age old double entry method of accounting is appropriate here. Two major columns in a hard cover book with one titled "income" and the other "expenditure!" Bankers like to see this to make sure that the person they are considering giving money is not running the business from his pocket and is organized from a financial perspectives.

      Angel investor- Angel investors are people who have taken a fancy to our person or our business and trust us to the level of putting their own money into the business. Some with require a return on their investment, others would just want to make sure that we are using the money properly!

      Venture capital- A lot of the countries of the world have venture capital companies that look out for ailing businesses and pump money into them with a view to reviving them for a share of the proceeds. Some venture capital arrangements would request for a presence in the company or on the board of the organizations so that they might be able to protect their investments. 

     Relatives- IF you have relatives who would be willing to put their money in a venture that you are running, it could be a great idea to have them help with finances. Whenever we are involving an external body in the business whether its a relative or not, its good to write things down in the form of a memorandum of understanding so as to ensure that all possibilities and agreements are taken care of. This protects both parties and makes the entrepreneur more careful about the way he expends finances.

      Saving- Our savings can also be a source of finance. Even thought the modern entrepreneurs likes to dwell on other peoples money as a source of financial security, investors often like to see how much of the business owner's capital has been invested before they commit.