Most business ventures – be they fledgling start-ups or well-established companies – came about as a result of someone having a great idea for a product or service. However, while much can be said in favour and defence of the “next fantastic thought”, an idea alone without concrete steps taken to turn it into a reality will not get users very far. 
Apart from a well-thought out idea and business plan, one of the other crucial ingredients to turn an entrepreneurial thought into a start-up business is capital. As the old adage says, it takes money to make money.
The conundrum, says Anton van Heerden, GM of Altech ISIS, is that where money is in abundance, ideas seem to be in short supply and vice versa.
“In more developed nations, such as the US, venture capital is readily available, but original business ideas appear to be scarce. On the other side of the ocean, Africans have a wealth of innovative and solid business ideas, but here on the continent we are cash strapped and investors who are actually willing to put their money where their mouths are, are extremely hard to come by.”
The uncertainty about the current economic client is not helping to attract investors either, yet entrepreneurs at the helm of fledgling companies in the United States – where start-ups have reportedly been responsible for nearly all net job growth over the past 30 years – are surprisingly confident about their chances of building a successful business.
This is according to the results of a new Start-up Confidence Index, released in late October by the Kauffman Foundation and LegalZoom. It revealed that 83% of the nearly 700 respondents, who founded companies within the previous 12 months, are confident that their profits will grow in the next year.
The other common denominator between start-ups and successful, well-established enterprises is growth, says Van Heerden.
“Not just in terms of economic turnover and profit-making, but also expansion by way of job creation.”
On this front too, there seems to be optimism among start-ups. Almost 40% of start-up owners cited in the Start-up Confidence Index say they plan to hire additional employees in the next few months.
Sometimes success can be achieved by learning what to avoid. Van Heerden points out that in order to see what else differentiates flourishing start-ups and enterprises from those companies that have gone bust, is to examine why the latter failed.
“Oftentimes, you will see it is because they did not understand their target audience and what they wanted or needed. Or if they did grasp it, they didn’t deliver what they set out to do. Then there are those examples of companies that understood their audience and cared enough to deliver great service, but ended up spending way too much money on the initial product – overbuilding it – or on the launch.”
In his New York Times bestselling book The Lean Start-up: How Today’s Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses, author Eric Ries cites why a company he had been involved in floundered. “… it was working forward from the technology instead of working backward from the business results you’re trying to achieve.”
“The other extremely important aspect that successful start-ups and companies have in common is – and this seems really simple and obvious – that they never gave up,” says Van Heerden.
“Remember that even big corporations were start-ups once.”