The Entrepreneur's Toolkit

Great businesses are built on great ideas. Discover your own great idea by drawing on some basic principles plus inspiration from famous entrepreneurs. But first, you must know who your customers are, which is not as straightforward as it sounds.

Starting a business is risky. Give your business the best chance to survive and thrive by taking three important steps: conduct primary and secondary research, understand the five key success factors, and create a competitive landscape table that rates the strengths and weaknesses of your competitors.

Add two important skills to your entrepreneurial toolkit: writing a theory of business and building a prototype. By following these two actions, you'll be able to refine your business idea, demonstrate that it's possible to achieve, and show that your idea delivers what your customers want.

You are now ready to confront the most crucial question of all: how will your company make money? Learn how to answer this question with confidence by preparing a business model that addresses six issues - from how you will differ from your competitors to what you will do to ensure repeat customers.

Survey your options for a legal structure that is appropriate to your business. Learn about the advantages and disadvantages of a sole proprietorship, partnership, limited liability partnership, limited liability company, corporation, and nonprofit corporation.

The business plan is your company's detailed roadmap for building a successful venture. In the first of eight lectures on this powerful toolkit, learn the art of writing a compelling executive summary and an incisive business description, which are a business plan's introductory sections.

Continue your examination of the business plan by focusing on the marketing portion, which should include your research and analysis of the market as well as a comprehensive marketing strategy. Professor Goldsby highlights a hypothetical example, stressing the importance of telling a persuasive story.

Your business plan should include details of your company's logistics and operations—for example, how you will obtain supplies, get products made, and deliver them. Study this critical process, which can often mean the difference between success and failure in a business.

Turn to the part of your business plan that deals with organizational structure and the management team, which should show that you've assembled the right people with the right skills. Survey some of the most common mistakes, and learn how celebrated entrepreneurs selected their key managers.

Professor Goldsby devotes two lectures to financial statements, which make up the backbone of your business plan. In this lecture, examine income statements and balance sheets, and cover such categories as revenue, expenses, net income, assets, liabilities, owner's equity, and the breakeven point.

Continue your study of finance by investigating cash flow statements. Learn why they are so important, what they should include, and how to build one. Then look at important financial performance measures, including working capital, return on assets, and return on investment.

Potential investors reading your business plan will want to know that you have a plan to deal with possible obstacles and catastrophic surprises. Discover tools such as the Porter Five Forces Model and the SWOT analysis, which provide insight into critical risks and how to address them.

Complete your business plan with these sections: the harvest strategy, which covers steps to make your company sellable; the milestone schedule of key events in the projected future of your company; and the appendix and bibliography, which should provide the reader with additional resources.

Now that you have a comprehensive business plan, explore methods for raising money throughout the life of your business. Focus on the seed stage, the startup stage, and the growth stage. Learn what bankers look for when making a commercial loan, and where to look if the bankers balk.

Today it's easier than ever to run a business out of your home. Assess what you need for a successful home office or any small startup. Topics include picking a unique and memorable business name, building an effective website, and exploiting social media.

Building a family business is part of the American dream. Yet if not handled well, it can turn into a nightmare that tears a family apart. Learn the strengths, weaknesses, and challenges of a family-run enterprise, and hear about Professor Goldsby's own experience with this traditional institution.

Evaluate the opportunities offered by franchises, which allow you to own a business that has a recognized image and product. Then explore the rewards of buying an existing business—particularly one that is underperforming and has the potential to excel.

A smart phone, a company logo, and a bestselling book are all examples of intellectual property. Understand when and how you can protect your ideas through patents, trademarks, and copyrights. Also discover why some companies choose not to seek patent protection for their products.

Focus on human resources practices—an important tool for designing the type of company you want to build. Cover major aspects of employee relations, including the interview, orientation, compensation, performance rewards, and the performance review, spotlighting how innovative companies handle these issues.

Probe examples of both excellent customer relations and cases where poor service spiraled disastrously out of control, sinking a company. Then study the related topic of branding, which is a promise to customers about what a business can do for them. Learn how to choose a brand that expresses your commitment to customers.

Entrepreneurship is about seeking, recognizing, and acting on opportunities. Investigate four types of individuals who are primed to excel at this challenge. Professor Goldsby labels them artists, scientists, evangelists, and builders, and he gives famous and inspiring examples of each.

Explore the phenomenon of entrepreneurial exhaustion, illustrated by the one-man-band syndrome, in which a business owner takes on too many roles. Learn how, as your company grows, you can make it more professional so that you don't run yourself and your enterprise into the ground.

Widen your horizons to encompass entrepreneurs in every sphere of life. Then look for the qualities that make leaders in this endeavor, uncovering research that gives insight into how successful entrepreneurs think. Professor Goldsby gives one of his favorite examples—and it's not someone in business.

In this last lecture, look at what happens when the entrepreneurial phase of your company is over and you're either forced out or you want a new challenge. Hear how Steve Jobs of Apple Computer handled this watershed event and how others have reacted by reinventing themselves in a new arena of entrepreneurship: humanitarian service.