Entrepreneurship has played an important role in Portugal in recent years. The proliferation of new projects and new ideas, the creation of incubators of startups, the interest of public entities and private investors are indicators that entrepreneurship is in fashion.
But what is it to be an entrepreneur? Is it enough to have a good idea to have a project feasible? Not all ideas are good and not all good ideas are achievable.
The success of a good idea depends on its implementation and the first step to make it happen starts with the development of a business plan that foresees all crucial aspects related to the implementation of the business idea:
- Executive Summary
- Project Promoters
- The underlying market – target audience
- Definition of the problem / need
- The project / product / idea
- Financial forecasts
- Business management and control
- Investment and financing
A business plan does not have to be complex or extensive for any project to become a successful initiative, rather it must be objective and answer questions about the feasibility of the project in a practical manner. But it will always be a requirement if it is necessary to resort to financing.
In projects involving production or involve third parties, a plan A is not enough, it is necessary to have a contingency plan, both a procedural and financial levels.
Another critical and fundamental aspect for the success of the project is the team allocated that will be allocated to it, its skills and the level of commitment to the project.
The next step is to raise funds for the project. In the earlier stages, resorting to friends and family may be the most viable solution to take the first steps and to create a proof of concept for the following stages.
Depending on the type of project and the amount of funds it may require, there are several ways to fund the project:
- Crowdfunding – it is characterized by raising capital through collective initiatives and it is typically used by artists, small businesses and startups, political campaigns, software and social causes.
- Banking – The traditional financing currently presents some difficulties for some startups, implying always the presentation of guarantees. The assessment of the business potential is made according to the robustness of the presented indicators.
- Business Angels – after the seed phase, private investors can be a great choice, not only for the capital they bring into the company, but also due to the know-how and networking they have and that can be useful for the project.
- Venture capital – this type of financing usually enters at an expansion phase and may take several rounds. At this stage, there usually exists already a proof of concept and the project has already been launched in some markets. Venture capital companies commonly invest in more technological projects and have a “go big or go home” philosophy, which may not be in line with the business angels’ strategy thus being a reason for entering at a different phase of the project.
There is also the idea that projects that have been funded by venture capital firms are more likely to succeed, not only because of the scrutiny they undergo at the project review stage, but also because of the milestones the projects are required to meet.
For many startups, fundraising is critical, but it is not the only resource needed. The development of a network of contacts with potential suppliers, clients and partners is an important aspect for establishing a flow of information and valuable communication among the different stakeholders.
It is not enough to have a good idea to be able to sell a project, the key to success lies in dedication and hard work.