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Business Creation

Ten Factors for Entrepreneurial Success

Paul D. Reynolds

Business creation, or entrepreneurship, is a major source of national economic growth and adaptation as well as an important career choice for millions. In this insightful book, Paul D. Reynolds presents an overview of the major factors associated with contemporary business creation, reflecting representative samples of US early stage nascent ventures, and emphasizing the unique features of the two-fifths that achieve profitability.
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Chapter 10: Money may be necessary, but is not sufficient

Paul D. Reynolds

Extract

Money doesn’t start businesses, people do. But people often need money for two things to complete the start-up process. The first are the living expenses of the start-up team; everybody needs to eat and a place to sleep. The second is for resources to implement the new venture. There is substantial variation in both the amount of funds required and when financial support is needed during the start-up process. There are, of course, a wide range of solutions developed for these challenges. New solutions for acquiring financing are constantly being invented—internet based crowdsourcing being one of the more recent.1 The major strategy for covering living expenses is to continue working while developing the new business. More than four in five nascent entrepreneurs are working or managing another business while they develop the new venture. The importance of attending to their day jobs is reflected by how long it takes to begin devoting full-time to the start-up initiative. As shown in Figure 7.1, for about two-fifths (41%) full-time attention generally occurs about eight months after beginning the business creation process. Others may have working spouses, be living with parents or relatives or, for older nascent entrepreneurs, relying on retirement income.

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