Module 4: Personal resources

Learning objectives
Participants will:

 Be inspired to evaluate own resources

 Be able to focus on their own strengths
 Gain knowledge about 5 principles of successful entrepreneurs

Contents
4.1 Start business from nothing
4.2 Business plan questions
4.3 Start writing the business plan

Before seriously getting on with the idea of starting your own business you must consider your
motives for starting on your own. You also need to consider whether you possess the
personal/financial/professional skills qualifying you for a business start-up. By doing this you could
become surer of yourself and your new future.

In this part of the business plan you must:

 Find out if you have access to the right resources

 Convince the reader that you and your team can make the project fly
Also you will probably experience that you are stronger than you think.

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4.1 Start business from nothing
As an entrepreneur you seldom have a clear plan of how
to reach your target because the target is somewhat dim.
Oftentimes, you also lack financial resources.

But you always have something to give your new

business:

 You have your personality

 Your skills
 You have the ability to engage with others
It is a good start.

If you know where you are heading and you have the
resources to back your business project it is easy to plan
the road to your goal. But very few entrepreneurs are Picture 1: Sri Lankan batik
clear in their direction and few have resources. entrepreneur

Therefor a new entrepreneur who wants success must use whatever she has in her hand to build the
road to a viable business. She often succeeds with this.

Studies have shown that successful entrepreneurs use the means available to guide them to success.
According to Professor Saras S. Sarasvathy the means can be described in 5 principles:

1) Bird-in-hand principle
When the best entrepreneurs set out to build a new business, they start with their available means.
What cards do you have to play with? It does not matter if they are good or bad. You have what you
have and you take it from there.

The means you set out with are:

Who you are - your personality. Are you introvert or extrovert, a nice person or someone difficult
to be around? A perfectionist or a relaxed person?

What you know - your education, work experience, spare time activities, experience from running
a family and knowledge from books and YouTube

Whom you know - family, school mates, former colleagues and the ones you have not met yet

2) Affordable loss principle

It is often said that real entrepreneurs take big economic risks in order to win big - or lose big, but
the most successful entrepreneurs limit risks by understanding what they can afford to lose at each
step, instead of seeking large all-or-nothing opportunities.

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Instead of borrowing money to open a big restaurant with 20 tables they open a street kitchen, gain
experience and then slowly invest in a small restaurant with little staff, learn to manage staff and
purchase and then one day take over a bigger restaurant.

3) Crazy Quilt principle

When a prosperous entrepreneur does not have the resources she needs, she seeks partners. She
takes in partners early on in the venture as a way to fill gaps and reduce uncertainty. Partners can be
family and friends and people she meets on the way or seek out for strategic purposes.

You might have a vegetable garden and you get the opportunity to tribble it by buying a
neighboring piece of land. But then you need bigger and expensive farm equipment that you cannot
afford. How to overcome this obstacle? You could contact the nearby tourist hotel and offer them
steady supply of vegetables if they will invest in a small tractor.

Or you might want to sell organic dried black pepper from the internet but you have no idea of
starting a webshop. Maybe your neighbor’s son who have studied IT could be your new partner?

This is just two examples of overcoming an obstacle but there are many others if you allow yourself
to think in solutions.

4) Lemonade principle
A successful entrepreneur knows that the future is uncertain and in a split second everything can be
changed. Instead of making plans for worst case scenarios she embraces change and makes the best
out of it or takes it as an opportunity to innovate.

If you get a sour lemon you sprinkle it with sugar, add clear mountain stream water and sell it as
Mountain View Lemonade

Being an entrepreneur is solving problems which keep coming. Most of them are small and can
easily be solved but now and then big ones occur. It is in these instances the lemonade principle
must be used.

Example
E.g. if you have a well visited roadside stand selling freshly
made orange juice and one day a disease go into the orange
trees and there is no supply of oranges the next year. This
represents a big problem for an orange juice stand. What to do
now?

What do you have in your hand? You have:

 A well visited stand,

 Machinery to produce juice,
 Yourself as owner and juice maker Pic 2. Inspiration to juice development

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 Source: Joe & the Juice
Some of the tourists passing your stand have asked for mixed juices but they settled for the fresh
orange juice because this was what you had to offer.

The lack of fresh oranges forces you to innovate so you investigate what other kind of juices that
can be made. At the local internet cafe you get access to a computer connected to the internet and
you start searching for mixed juices and end up at a European juice company called Joe & the Juice.
They have juices you thought could be mixed. E.g.:

 Cucumber, Lemon, Pineapple

 Beetroot, carrot, ginger
 Cucumber, Lemon, Pineapple
 Turmeric, Black Pepper, Pineapple, Carrot
 Butternut Squash, Lemon, Apple
 Apple, mint, ginger
 Red bell pepper, apple, lemon
 Avocado, lemon, apple

Picture 3: Inspiration to juice development. Source: Joe & the Juice

With this new inspiration you investigated what fruit, vegetable, herbs and spices that were
available in your area and you invented 10 different juices all made of local produce.

Customers loved this new European healthy style juice so much that the nearby hotel ordered a
steady supply of juices for their guests.

Within a year of the disease attacked the orange trees the juice stand might have double its turnover
and tripled the profit.

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5) Pilot-in-the-plane principle
A successful entrepreneur only plans things that are within in her reach. When she does that she
knows her actions will result in the desired outcomes. A pro-active entrepreneur is rooted in the
belief that the future is neither found nor predicted, but rather made.

You sit in the pilot seat and steer your plane free of dangers, around thunderstorms and below ash
clouds.

You can do it
As you can read above most persons can become an entrepreneur even though they do not have a
clear goal and resources to back it up. Start your journey in the world of entrepreneurs with the
birds you have in your hand. Make them fly somehow and see where they take you.

You will meet 1000 challenges but solve them one at a time. Find partners with resources,
implement new ways of approaching the problem and break down expenses to affordable bites.

Picture 4: Professor Saras S. Sarasvathy

4.2 Business plan questions

Below you find the items about your personal resources that the business plan template asks
questions about.

Family network
The closest people available to assist one in starting a business will often be family. Hopefully they
support your dream of managing a business. Grandfather, parents, brothers and sisters, cousins and
others may have a lot of contacts that can support you in making the business flourish.

Unfortunately, the same family members can also be a liability to your new business. If they feel
they have the right to make business decisions for you, your business life could then get difficult.

What can you decide and what will the family decide?

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Experience
It almost goes without saying that you should not start business within a trade or area of experience
that you are unfamiliar with. If you have to start out gaining basic knowledge about your service or
product along with getting to grips with running a business it will soon become an almost
impossible task.

However, some lines of trade are fairly easy to learn. Starting a cleaning company or selling
pancakes can be done with very little knowledge about the trade while start raising pigs with no
livestock experience will be risky.

What do you know best and what are you best at? Does that fit in with your new business?

Education
It is a great advantage if there is an educational foundation of the competencies in the company. If
you can add several years’ practical experience within the field it will take the competencies to an
even higher level.

Life experience and spare time activities are also important parameters to review when starting a
business.

Which education do you - and maybe your team have?

How have you used this education in real life?

Economy
Very few of those starting their own business have a lot of money to invest in the company. Then
again, many companies do not require substantial financial resources to get started.

Usually, a service business as accounting service or opening a road side food stand company does
not require huge start-up capital. Besides its knowledge pool, such companies usually need only a
small start-up capital.

It is the complete opposite for retailers in huge modern malls and for cattle farms.

How much money are you able to raise?

Internal trade networks

Having the right connections within a trade is of great importance. But networks are also important
within other aspects of business operations. Experience shows that many customer relations have
been established because a friend of a businesswoman has told another friend about the
businesswoman.

Which people do you know within your industry – and who is willing to support you?

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Product/service knowledge
It is important to possess a profound knowledge of the service or product you want to market. An
uncomplicated business such as selling fast food or groceries can be handled on the basis of general
skills and knowledge and without prior experience.

However, starting a big poultry farm without knowledge of managing industrialized farming is
unwise. The more specialized the service, the more important it is to possess great knowledge of the
topic.

Do you know enough about your product or service?

Weak sides
You probably have a lot of strong sides that will benefit the business. But one person seldom has all
the skills and personality that makes the perfect business.

You may have strong skills in selling and developing your product, but maybe not in completing
paperwork and administration functions.

Do you have any weak sides? If so, how will you cover them?

4.3 Start writing the business plan

Go to your mini business plan template and start filling it out. You can download the mini business
plan from the website with course material. Store it on your computer or print it so you can work on
it.

Picture 5: Food stand in Bangkok. Pic: Pixabay.com

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Reference
www.Effectuation.org 5 principles of successful entrepreneurs by Professor Saras S. Sarasvathy,