Rebecca Matthias, for example, started Mothers Work in to sell maternity clothing to professional women by mail order. Rapid growth also makes sense if consumers are inclined to stick with the companies with which they initially do business, either because of an aversion to change or because of the expense of switching to another company.
Entrepreneurs who are stuck in ventures that are unprofitable and cannot grow satisfactorily must take radical action.As market imbalances disappear, so do many of the erstwhile high fliers who had never developed distinctive capabilities or established defensible competitive positions. With no way to leverage their skills, they can eat only what they kill. Financially, some entrepreneurs are looking for quick profits, some want to generate a satisfactory cash flow, and others seek capital gains from building and selling a company. Resource constraints. This strategy also dictated that Sun assume the risk of building a direct sales force and providing its own field support—just like its much larger competitors. Consider Edward Rosen, who cofounded Vydec in Few start-ups, for example, can expect to attract the resources needed to market a revolutionary product that requires radical advances in technology, a new manufacturing process, and new distribution channels. Reward For example, maybe you are fortunate enough to currently have an excellent, highly paid corporate job with terrific fringe benefits and good advancement potential. Many start-ups operate at first as virtual enterprises because the founders cannot afford to produce in-house and hire employees, and because they value flexibility.
Entrepreneurs should periodically put their strategies to the following four tests: Is the strategy well defined? Once entrepreneurs have formulated clear strategies, they must determine whether those strategies will allow the ventures to be profitable and to grow to a desirable size.
Should I, with my personal attachment to the business, make termination decisions myself or should I bring in outsiders? Why all the conflicting advice? Ventures often start with the customers they can attract the most quickly, which may not be the customers the company eventually needs.
Speedy response and trial and error were more important to those companies at the start-up stage than foresight and planning.
An all-purpose workshop employee, for example, might become a machine tool operator, who is part of a manufacturing unit. Remember that some people may only read this section, so make it a clear, concise overview of who you are, what you want to do, and how you plan to do it.