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The Entrepreneurial Adventure

The Entrepreneurial Adventure


Embracing Risk, Change, and Uncertainty

Oliver James and David James


The Entrepreneurial Adventure: Embracing Risk, Change, and Uncertainty

Copyright © Business Expert Press, LLC, 2020.

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All rights reserved. No part of this publication may be reproduced,


stored in a retrieval system, or transmitted in any form or by any
means—electronic, mechanical, photocopy, recording, or any other
except for brief quotations, not to exceed 400 words, without the prior
permission of the publisher.

First published in 2020 by


Business Expert Press, LLC
222 East 46th Street, New York, NY 10017
www.businessexpertpress.com

ISBN-13: 978-1-95152-710-5 (paperback)


ISBN-13: 978-1-95152-711-2 (e-book)

Business Expert Press Entrepreneurship and Small Business Management


­Collection

Collection ISSN: 1946-5653 (print)


Collection ISSN: 1946-5661 (electronic)

Cover and interior design by Exeter Premedia Services Private Ltd.,


Chennai, India

First edition: 2020

10 9 8 7 6 5 4 3 2 1

Printed in the United States of America.


Abstract
This book is perfect for anyone looking at business and entrepreneurship.
It will be ideal for anyone with an interest in business and anyone who
has aspirations to start their own business, outlining key principles of the
entrepreneurial adventure and the business world, bringing it to life using
case studies.
This book contains useful and practical information about business
and entrepreneurship and will aim to give a robust understanding of the
theory and real-world implications of running a successful business.
This book describes and explains the whole process from under-
standing the implications and risks, the start-up stage through to future
expansion.
The authors clearly demonstrate that if you follow the good business
habits and practices that are described in this book consistently, you really
can achieve entrepreneurial success and the opportunities that come with it.

Keywords
entrepreneurship; business; startups; risk; reward; profitability; marketing;
strategy; networking; managing change; decision making; uncertainty;
stakeholder management; planning; resource and process management;
consistency of good habits; research; market research
Contents
Preface��������������������������������������������������������������������������������������������������ix

Chapter 1 Introduction���������������������������������������������������������������������1
Chapter 2 Is This Option Right for You?�������������������������������������������7
Chapter 3 Understanding the Norms of Uncertainty, Risk, and
Relentless Change�����������������������������������������������������������25
Chapter 4 Key Entrepreneurial Skills and Competencies�����������������37
Chapter 5 Stakeholder Management: Exceeding Expectations���������47
Chapter 6 Understanding Key Financial Statements������������������������53
Chapter 7 Your Strategy and Mission Statement������������������������������77
Chapter 8 Objective Setting������������������������������������������������������������81
Chapter 9 Short- and Longer-Term Planning����������������������������������85
Chapter 10 Marketing: Letting People Know You Are There�������������89
Chapter 11 The Importance of Social Media and Networking���������103
Chapter 12 Decision Making����������������������������������������������������������113
Chapter 13 Understanding Resources����������������������������������������������117
Chapter 14 Process Management����������������������������������������������������121
Chapter 15 Opportunities for Growth��������������������������������������������137
Chapter 16 Conclusions������������������������������������������������������������������147

Bibliography���������������������������������������������������������������������������������������151
About the Authors�������������������������������������������������������������������������������153
Index�������������������������������������������������������������������������������������������������155
Preface
Entrepreneurs come from different backgrounds, and each has their own
story to tell from how they started to how they became successful, with
some challenges along the way. Each entrepreneur and their journey is
unique; some have started with literally nothing, some have previous
business experience, so it is difficult to Pigeon hole what you need to start
with. In this book, we will look at various areas that entrepreneurs need
to be aware of at the very early stages of starting your business, what you
may need to consider, all the way through to looking at opportunities for
growth. We will outline the opportunities, potential pitfalls, and key areas
you need to consider at each stage of the entrepreneurial journey.
CHAPTER 1

Introduction
A man’s success in business today turns upon his power of getting peo-
ple to believe he has something they want
—Gerald Stanley

Since the beginning of history, entrepreneurship has been underpinned


by the market forces of supply and demand. Across the world, entrepre-
neurs look to address demand for goods or services by providing supply.
A start-up business, which typically is started up by a founder or
cofounders, is a new business venture that looks to fill a gap in the market
or address a need or problem. While there are several avenues that can
lead on from the start-up stage, it all starts from an idea and the courage
to build on it and see it develop into something to be proud of.
Owning a small business can be as rewarding as it is challenging.
Owners come from a variety of backgrounds and have many different
reasons for becoming self-employed. Sometimes, small businesses start as
ideas that no one really believes in yet, but some of the biggest and best-
known brands in the world would have all had to start somewhere. From
Coca Cola, to Amazon and Disney, all of these household names would
have started from an idea that has developed into a big business. Each of
these founders had an idea and a vision that they believed in.
Becoming an entrepreneur has become a cool thing to do. It is no longer
the case that we have two choices when we leave compulsory education—
further education or entering the job market. It is also no longer the case
that working for a big company is the only way to be recognized as success-
ful. Starting your own business and making it a big business from nothing is
widely admired and can lead to many exciting opportunities and successes.
There is worldwide attention on high-profile entrepreneurs, for exam-
ple, Lord Alan Sugar, Michelle Mone, Steve Jobs, Barbara Corcoran,
Elon Musk, Sir Richard Branson, Mark Cuban, Peter Jones, and their
2 The Entrepreneurial Adventure

individual success stories. There are also a number of mainstream televi-


sion shows that have hugely increased the profiles of entrepreneurship,
for example, Dragon’s Den, the Apprentice, Shark Tank, and Undercover
boss. With the huge viewing figures across the world and the emergence
and importance of social media, both the judges and contestants can
massively increase their profiles and in turn can lead to life-changing
opportunities.
These factors have all contributed to a shift in profile about starting
your own business and entrepreneurship, making it a positive and via-
ble choice. However, there are other factors that make starting your own
business and becoming an entrepreneur an attractive choice:

• Wanting a new challenge: Sometimes in life, you may wish to


seek a new challenge or to become a better version of yourself.
This is sometimes due to a number of factors, for example,
you may feel underutilized, undervalued, unhappy, or that
you are not fulfilling your potential in some way. Whether
you choose to do so or it is forced to make the decision due
to factors outside of your control, having something new
to focus on can be invigorating and provide the opportu-
nity for a fresh start. While any decision you make and the
consequences of that decision have to be carefully consid-
ered, starting your own business can be that opportunity and
new challenge you are looking for. As we will cover in this
book, becoming an entrepreneur will have its challenges, and
embracing and facing them will be one of the key factors in
making your own business a success.
• Pursuing a passion: If you run your own business and it is
an area that you are passionate about or by definition you
are passionate about your business because it is yours and
you want it to succeed, the hard work needed will be that
much easier as you are pursuing a passion. With hard work
and a bit of luck, there is a huge variety of concepts that can
be made into a small business and as is sometimes said “if
you love what you do, you will never work a day in your life
again.”
Introduction 3

• Admiring and being inspired by other entrepreneurs: Success-


ful people inspire other people to become successful. Potential
entrepreneurs can learn from the stories of other successful
entrepreneurs and if they choose to start the journey, meet
and network with people who have made their entrepreneur-
ial journey a success. Learning from the experience from and
expertise of others who have been there and done that is an
important part of the process. Seeing someone who has made
millions after starting with nothing is inspiring for many new
entrepreneurs who aspire to achieve the same.
• Liking risk: Entrepreneurs tend to like risk, and ultimately,
whatever type of business you wish to start, there will be
varying elements of risk to that venture. However, the level
of risk is something that has to be fully researched, measured,
and understood, to make sure an informed choice can be
made. Ultimately, it makes sense to have a balance of risk,
pragmatism, and realism. Aspiring entrepreneurs have ideas,
put them in to action and watch them develop.
• You can control your own destiny: As an entrepreneur, you
can be your own boss. This is a mixture of liberating, empow-
ering, and challenging. That means in terms of running the
business, you only answer to yourself, set your own hours, and
manage your own workload. When you work on your own
and you achieve something, you are likely to be more fulfilled
as you have achieved it for and by yourself. So, you ultimately
take charge and do it your own way, rather than feeling like a
cog in a large business. That said, while you answer to yourself
in terms of running the business, you also answer to clients
and customers, who ultimately will be paying you for what
you offer. They will expect a high-quality good or service at a
reasonable price. So, you have to deliver.
• You are making a contribution to the economy: The role small
businesses play in an economy and the value they add can
sometimes be underestimated. In some ways because they are
small, they can be overshadowed by the news coverage that
their larger counterparts get and do not take the revenues of
4 The Entrepreneurial Adventure

larger firms. That said, while they may not be the same big
revenues, that is not to say they do not add value. If they
are set up in business-friendly countries, with sensible tax
structures and regulations, small business and startups can
make a big contribution to a country’s economy as well as
their local area. Small business can give people the opportu-
nity to achieve financial independence, encourage innovation
and also boost employment, by employing local people, who
may be not be employable for larger firms. A thriving small
business will also generate more revenue and, therefore, pay
more taxes to boost government resources. And ultimately, if
a number of factors fall into place, small businesses, over time,
can also become big businesses.
• It can open doors to additional opportunities: As your
business goes from startup to becoming established, there
are likely to be external opportunities that arise. This could
be in areas such as keynote speaking, judging on business
award panels, nonexecutive director or advisor roles, or
taking part in TV shows such as the Apprentice. While these
sorts of things give an entrepreneur a platform for increased
profile and income, there are also things that can be done
to give back. For example, this could be mentoring for a
charity or giving careers talks or mock job interviews at local
schools.
• Lack of other choices: In reality, due to a variety of potential
circumstances, some people are left with starting their own
business as their only realistic choice. It may be the case that
working for someone else is not suitable or undesirable. Other
factors could be due to uncontrollable circumstances such as
economic and job market conditions, previous work experi-
ence, unexpected sudden job loss, and education.

In this book, we will look to outline the many aspects of starting your
own business, the good practice, and consistency of good habits you need
to have to maximize your chances of succeeding. We will also look at the
massive and varied opportunities it can lead to, the various challenges you
Introduction 5

may come across, the pitfalls you could face, the reality and practicality
of the entrepreneurial adventure, the predictable unpredictability, and the
overall success you can achieve.

A big business starts small


—Richard Branson
Index
Account, profit and loss, 61–62 protections, 16–17
Accruals, 65 small, 1–4, 12, 19, 89, 104,
Action plan, 93 138–140, 142, 145
Appreciation, 66 starting, 10–12
Assets, 64, 141 strategy, 77–78
strengths, 30
Bad location, 20 success, 40–42
Balance sheet, 64 technology and AI, 31
Banks, 49 threats, 31
Being ethical, 41 types, 7–9
Blog, 90 valuing, 143
Brainstorm, 10 weaknesses, 30
Branding, 95–96 Wealth Dragons (case study),
Breakeven analysis, 61 22–23
Budgeting, 55–56 working environment, 15–16
benefits of, 56–57 Business planning and control, 68
creation, 57 efficiency, 71–76
Business liquidity, 70–71
angels, 142 profitability, 68–69
budgeting and planning, 55–56 Business-to-business (B2B) market, 91
Caan, James (case study), 12–13 Business-to-consumer (B2C) market, 91
demand, 14
and entrepreneur, 2–4, 19–22 Caan, James (case study), 12–13
entrepreneurial lifestyle, 18–19 Capacity planning, budget, 57
expenses, 122–123 Capital gains tax (CGT), 124
failure, 20 Carriage charges, 133
and family, 19 Cash, 64
financial statements, 54 Cashflow, 19, 133
foundation, 138–139 account, 58–59
goals, 92 calculation, 59
idea, 7 components, 59
intellectual property, 16 forecasting, 60–61
knowing your numbers, 17–18 Cause marketing, 95
knowledge, 38 Change
location, 15 choices, 35
market size, 13–14 complexities of, 26–27
network, 18 reactions to, 34–35
opportunities, 30 transactional, 26
own, 9–10 transformational, 26
PESTLE framework, 28–31 Charity events, 90
planning, 20 Climate, 100–101
problems, 144–145 Collaborative relationships, 33
156 Index

Collaborators, 100 Directors loan, 67–68


Commission, 129 Discrimination, 131
Communication, 40, 51 D.J. Learning Ltd. (case study), 96
strategy, 32 Do-it-yourself (DIY) job, 109
Community, 49 Domain name, 11
Company, 8, 100 Domino effect, 19
name, 10–11
website, 105–110 Economic, business, 28–29
Competition, 92 Efficiency, 71–76
Competitors, 54, 100 Emotional intelligence, 32, 40
Compromise, 51 Employees, 48, 54
Consistency, 80, 144 payment, 128
Consistency of good habits, 4 tax position, 129–130
Consultants, 128 types of, 127–128
Contacts, 111 Employer, 125–126
Contractors, 128 branding, 42, 96–97
Control, budget, 56 liability, 132
Co-operative business, 8–9 Employment law, 130–131
Copyright, 17 Employment legislation, 131
Corporation tax, 122–123 Entrepreneur, business and, 2–4,
Cost, 12, 93 19–22
clarification of, 57–58 Entrepreneurial knowledge, 38
of sales, 63–64 Entrepreneurial lifestyle, 18–19
Creative thinking, 42–43 Entrepreneurship, 1, 2, 19–20, 40,
Creditors, 65 108, 117, 132, 142
Creditor turnover, 72 Environment
Credit period, 133 business, 29–30
Creditworthiness, 134 external, 27–28
Critical thinking, 42–43 working, 15–16
Crowdfunding, 142 Expenses, 133
Cultural differences, 140 External environment, 27–28
Current assets, 64–65 External stakeholders, 48–51
Current liability, 67
Customers, 49, 100 Facebook, 107
creditworthiness, 134 Face-to-face networking, 104
and suppliers, 54 Fair Labor Standards Act, 130
Family, business and, 19
Debentures, 67 Feedback, 11
Debtors, 65 Financial accounting, 54–55
Debtor turnover, 72–73 Financial shortfall, 20
Decision making process, 22, 40, 44, Five C’s, 99–101
55, 56, 82, 92, 113–116, 138, Fixed asset, 66–67
141 Fixed costs, 57, 61
Demand, 14 Fixed-term contracts, 127
Department of Labor (DOL), 132 Focus, 138
Depreciation, 66, 67 Forecasting, 56
Direct costs, 58 Foundation, business, 138–139
Direct discrimination, 131 Franchise, 9
Index 157

Franchising, 140 Listening, 40


Freelancers, 128 Listening skills, 33
Full-time employees, 127 Loan, 67, 141
Funding, 141, 142–143 Long-term planning, 87
Loss account, 61–62
Goals, 44
Goodwill, 67 Management information, 55
Government, 49 Managers, 48
Government/charity grants, 142 Marketing, 89–91
Gross profit, 62 brand, 95–96
Growth, opportunities, 137–139 D.J. Learning Ltd. (case study), 96
external fund, 141–145 employer branding, 96–97
external growth, 140–141 evidence, 99
internal funding, 141 five C’s, 99–101
internal growth, 139–140 Mark Wright (case study), 101
Guidance, budget, 56 people, 98–99
place, 98
Health and Safety and Work Act poor, 20
(HASAWA), 133 pricing, 98
Hourly rate, 129 process, 99
product, 97
Income, 60 promotion, 98
Income tax, 121–122 research, 92–95
Indirect costs, 58 Market research, 20, 81–82, 92
Indirect discrimination, 131 Market size, 13–14
Industrial market, 91 Mark Wright (case study), 101
Initiative, persistence, and drive, 39 Medium-term planning, 87
Inspiration, 32 Mendelows stakeholder matrix, 50
Instagram, 107 Mentor, 139
Intangibility, 66 Metrics, 44, 93
Intellectual property protection, 16 Mission statement, 78–79
Internal stakeholders, 48 Walt Disney Company, 79–80
Internet marketing, 94 Morale and confidence, 111
Interpersonal skills, 40–42 Motivation, 41
Introbiz (case study), 112
Inventory, 65 National insurance (NI), 123–124
Investors, 49, 54 Negotiation, 41–42
Invoices, 134 Net income, 62
Net profit, 62
Knowing your numbers, 17–18 Network, business, 18
Knowledge, 37–38 Networking, 103–104
Knowledge and experience, 111 benefits, 110–111
face-to-face, 104
Legal, business, 29 groups/organizations, 90
Lenders, 49, 54 Introbiz (case study), 112
Liabilities, 64 Noncurrent asset, 66–67
Limited liability company (LLC), 9 Noncurrent liability, 67–68
Liquidity, 70–71 Nonverbal communication, 34
158 Index

Objectives, 44 discrimination, 131


Objective setting, 81–84 employees, 127–128
Office, 15 employer, 125–126
Operating profit, 62 employer liability, 132
Opportunity, 4, 43 employment law, 130–131
Opportunity-specific knowledge, 38 health and safety, 132–133
Optimism, 39 income tax, 121–122
Organic growth, 139–140 invoices, 134
Organizing, 44 national insurance, 123–124
Outgoings, 60 payment, 129, 135
Owners, 48 prompt payment, 133
recruitment, 126–127
Paid advertising, 94 taxable profits, 125
Partnership business, 8 taxation, 121
Part-time employees, 127 tax position, 129–130
Passion, 2 value-added tax, 124
Patents, 16–17 Product, 97
Payment, 129, 135 Professional services market, 91
People, 98–99 Profitability, 68–69, 138, 141
Permanent employees, 127, 128 Profit account, 61–62
Personal brand, 41 Profit after tax (PAT) metric, 63
Personal characteristics, 39 Profit before tax (PBT)
creative and critical thinking, metric, 63
42–43 Promotion, 98
interpersonal skills, 40–42 Prompt payment, 133
practical skills, 43–45
traits, 39–40 Quick ratio, 70
Personal development, 33
Personality traits, 39–40 Recruitment, 126–127, 138–139
PESTLE framework, 28–31 Referral, 90–91, 111
Physical evidence, 99 Refund, 65
Place, 98 Regular use, 66
Planning, 44, 55–56, 85–88, 139 Relationship, 139
for prompt payment, 133 Relationship marketing, 94
Political, business, 28 Research, 20, 37, 61, 81–82, 92–95,
Poor pricing, 20 144
Potential, 39 Resources, 117–120
risk, 137–138 Responsibility, 51
Practical skills, 43–45 Return on capital employed (ROCE),
Prepayments, 65 68–69
Price, 98 Reward, 1, 7, 19, 48, 54, 142
Primary ratio, 69 Ridiculously Rich (case study), 145
Problem-solving, 43, 111 Rigidity, 20
Process, 99 Risk, 20, 40, 127, 132, 133, 138
Process management liking, 3
capital gains tax, 124 potential, 137–138
corporation tax, 122–123 Role model, 41
creditworthiness, 134 Rule of thumb, 18
Index 159

Salary, 129 Tangibility, 66


Search engine optimization, 110 Target market, 92, 93
Self-motivation, 34 Tax, 65–66
Self-reflection, 34 Taxable profits, 125
Semivariable costs, 58 Taxation, 121
Services market, 91 Tax authorities, 54
Share capital, 141–142 Tax position, 129–130
Shareholders, 48 Technological, business, 29
Short-term debt, 66 Temporary employees, 127
Short-term planning, 86–87 Time, 93
Simple, 138 Title clause, 133
Small to medium size enterprises Trademarks, 17
(SMEs), 12 Transactional change, 26
SMART. See Specific, Measurable, Transactional marketing, 95
Achievable, Relevant and Transformational change, 26
Timely (SMART) Traveling, 16
Social, business, 29 Trial-and-error exercise, 78
Social media, 90 TV shows, funding, 142
and company website, 105–110 Twitter, 107–108
principles, 105–106
Society, 49 Uncertainty, 7, 22, 25, 111, 129
Sole proprietor business, 8 Undercover marketing, 95
Specific, Measurable, Achievable, Understanding, budget, 57
Relevant and Timely Up to date, 111
(SMART), 82–84
Stakeholder management, 32, 47 Value-added tax (VAT), 124
external, 48–51 Variable costs, 58, 61
internal, 48 Venture capital/private equity, 142
Stakeholders, 54 Venture-specific knowledge, 38
Startups, 1, 4, 19, 59, 143 Verbal communication, 34
Stock, 65 Virtual office, 15–16
Stock control, 144 Visibility, 110–111
Stock turnover, 71–76 Vision, 31, 39
Strategic plans, 77
Strategy, 31 Walt Disney Company (case study),
business, 77 79–80
communication, 32 Wealth Dragons (case study), 22–23
formulating, 78 Website, 109–110
problem-solving, 114, 116 Win-win situation, 42
Strengths, Weaknesses, Opportunities Word-of-mouth, 94
and Threats (SWOT), 21–22, Work from home, 15
82, 138 Working environment, 15–16
Success, 86 Workload, 145
Suppliers, 48 Workshops/classes, 90
SWOT. See Strengths, Weaknesses,
Opportunities and Threats YouTube, 108
(SWOT)
Systems theory, 27

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