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The Principles of Entrepreneurship

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The Principles of Entrepreneurship

1. Entrepreneurship is not for everyone, and it requires a careful evaluation of the risks, demands, and rewards that come with the job. Success in entrepreneurship requires commitment, dedication, skill, luck, timing, and courage. Entrepreneurs must also interact with employees, customers, peers, and competitors regularly.

2. The definition of a business is straightforward – control of information for profit. 

3. It is crucial to identify the desired business and decide whether to start from scratch or acquire an existing one. The price paid for an existing business does not guarantee future profit or loss. It is equally important to understand the competitors’ plans

4. A wise entrepreneur plays the role of a facilitator, pays themselves first, works smarter instead of harder, diversifies their holdings, and always has an exit strategy. Failure is a part of the entrepreneurial journey.

5. Building a great business requires offering quality products or services at a fair price, coupled with excellent deliveries and customer service. Treating people right leads to profitability. Entrepreneurs should aim to build long-term relationships.

6. People are the most crucial asset of any business, and profitable sales are necessary to keep the business running. Entrepreneurship is like conducting an orchestra. Choosing the right music, selecting the right players, and motivating them to play with emotion leads to success. Entrepreneurs should control proprietary information and always assume that employees may be recruited by competitors or start competitive businesses.

7. The perfect product is affordable, has no moving parts, and is either habit-forming or consumable.

8. The price of a product has no relation to cost, but the perceived value in the eyes of the customer matters.

9. Uncontrolled growth can be dangerous. Entrepreneurs should aim to grow the business at half of its gross profit margin for an extended period without losing control or selling additional equity. The best money is your own or your family’s. Venture capitalists may not necessarily have experience running an operating business. The owner must retain 50.01% of the company, and owning the majority of the board is crucial.

10. Successful entrepreneurship involves taking ideas from others and improving upon them. The creator or inventor is often vilified for their new ideas. The key is to control the market niche.

11. Positive cash flow is more critical to the long-term survival of a business than creativity, innovation, corporate image, or community awards. Accounts receivable is the worst asset on a balance sheet and does not improve with age. 

The opinions expressed within this article/communication are those of the Financial Advisor and are not necessarily those of Keybase Financial Group Inc. Any data provided is for illustration purposes only. Clients and prospective clients should always read a product
prospectus and fully understand all of the risks associated with the product before purchasing. Any information relating to the discussion of taxation issues is considered to be only general in nature. Clients should seek a qualified tax professional to discuss their specific tax requirements.
Keybase Financial Group Inc. is a member of the MFDA and is a member of the MFDA IPC.