Ten Factors for Entrepreneurial Success
Chapter 11: Profits are elusive, prepare to pivot
Being a successful entrepreneur is very satisfying—that is the good news. But effective business creation often involves adjustments in the initial business idea. Some change the business plan as the venture is being implemented. More problematic is that most that enter the start-up process never reach initial profitability. When a nascent venture is abandoned, the individuals involved usually find other ways to participate in the economy. Many, to be sure, are still interested in becoming involved as nascent entrepreneurs. About one in 25 (4%) report making an adjustment to the original business plan.1 About half are considered major variations that may involve dramatic shifts in the products or services; the other half are considered minor shifts in activity. As shown in Table 11.1, almost half (47%) make changes in response to new information about customer preferences or as a reaction to the competition. About one in six (16%) mention financial issues, such as lower revenue, higher expenses, or issues with access to capital. About one in ten (10%) are responding to regulations or other contextual factors. A smaller proportion mention the loss of a critical individual (partner, employee, or contact), unexpected time constraints or other issues.
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