The entrepreneurial adventure is particularly difficult and trying. While this experience is often experienced as an exhilarating adventure, it also carries a significant amount of uncertainty and hardship. One of the great difficulties that an entrepreneur must face is the multitude of different and more or less complex tasks that he must perform to start and then develop his activity. During this journey, there are 3 crucial points to which a business manager must constantly pay attention so as not to disperse and keep his business alive …

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1. Human Capital

When you ask an entrepreneur what are the most important things to consider when starting a business, the first item most often cited is the team. Indeed, at the start, you have very little material and financial resources to conquer your market and stand out from your competitors. The competence of your team is therefore decisive for the success of your project, because it is truly the talent of your partners and your employees that will allow you to concretize your idea.

This is even more crucial than your initial idea, because whatever idea you want to realize, it is very likely that other people have already had it before or have it right after you. But what will make the difference is the mastery with which you will materialize your idea. This will for example be the case by making a product faster than the others, or a cheaper product, or a better quality product … or simply by making the product that best meets the demand of your customers. So take great care in choosing the people with whom you want to start your business, whether it be your partners or your first employees.

First, you need to define the skills that you lack and that are strategic (those that will allow you to gain a competitive advantage and that you should not outsource). Take the time to assess their personality, their skills, and to check that their deep motivations are compatible with your vision. The ideal is to choose people with whom you have already worked, because this gives you an idea of ​​how these people behave under stress, facing a difficulty or a challenge.

Otherwise, more generally, you will have to rely on your network to find rare pearls. And if you can’t find anyone through your network, you can go through more traditional recruitment methods.

Human Capital also includes your entire ecosystem: the primary suppliers, financial partners, customers with whom you will collaborate. Whenever possible, these are actors that you should choose carefully.

2. The economic model

The second vital element for your business is its business model. In other words, this is the mechanism that will allow you to transform your initial idea into a product or service that generates income for your commercial activity. So you need two things: a business idea and a development strategy. Far too many web start-ups are content to rely on traffic acquisition without necessarily thinking about how to monetize their traffic or their customer base. It is a risky strategy because it makes you dependent on your donors and forces you to finance yourself through successive capital increase operations.

But to come back to my original point, you need an original idea. You can look for an idea that will be completely disruptive and that will profoundly change the behavior and practices of your customers. For example, the company Coursera is transforming the way we learn with its Online Course platform (MOOC). Or, you can start from an existing idea and try to propose a new approach (cheaper product, different target …). This is what the founders of the start-up “Des Bras en plus” did by proposing a low cost offer for individuals wishing to move. The principle itself has already been used by many other companies. Simply there, the difference is rather in the content of the offer and the intended target. If you want to know more, you will find more details in this article: Disruptive or incremental innovation?

Whichever model you choose, you will have to be creative by taking inspiration from your passions, your tastes, your professional or personal experiences. A good way to find your idea is to think back to the problems you encountered in your daily life that might justify your willingness to spend the money to fix it. This is what Frédéric Mazella, the founder of Bla Bla Car, who, one Christmas Eve, was looking for to return to his family in Vendée in 2003. Did all the trains being full at Gare Montparnasse, he set out to find a way to drive with a fellow traveler, which gave him the idea of ​​launching a carpooling site.

You can also rely on your values ​​(terroir, ethics, authenticity, nature, etc.) or on the fundamental trends that you observe in society (development of new technologies, environmental protection, collaborative economy, etc.). Try to find a project that makes sense to you and that will motivate all the efforts you will have to make in order to reach your goal. Do not stop at your first idea, stay receptive to the world around you, trying to understand it and identify its facets. Jot down any ideas you have for improving things. For this, you can rely on your readings, your meetings, your travels, and your personal research.

Once you have your business idea, you still have to define how this idea will allow you to generate a sufficient source of income to develop your entrepreneurial project. In this article on Lean Startup, I precisely described one of the methods that exists for choosing and experimentally validating an economic model. Otherwise, a more classic approach will be to use your market research to determine your target, your marketing strategy and then deduce your cost / income structure. If you want to have more information on the different economic models, here is a Blog post which summarizes the main types very well: Economic models

3. Financial Management

Last but not least, managing your cash flow is a key element that you absolutely must not lose sight of so as not to disappear too quickly. Lack of cash is the main reason for the poor survival rate of young companies. This is what bankers call liquidity risk, which is the risk that you may not have enough resources to pay off your short-term receivables.

In order to avoid this pitfall, you must absolutely put in place, each year, a cash flow plan which will allow you to monitor monthly all receipts (cash inflows) and disbursements (cash outflows). You will know the cash balance and can react quickly if you see significant differences with your financial forecasts. This is the best way to make sure that you will always be able to settle all of your charges.

Here is a sample cash flow statement available on the PACE website: PACE Cash Plan