AMES, Iowa -- People come up with great business ideas all the time. Some lead to fame and fortune for their creators, such as Facebook inventor Mark Zuckerberg or Microsoft co-founder and CEO Bill Gates. But others fail to find the business mark.
"There are two main reasons for great ideas not ending up as successful ventures," said Howard Van Auken, the Bob and Kay Smith Fellow in Entrepreneurship in Iowa State University's College of Business. "First, the entrepreneur may have a great idea, but doesn't have the required skills to make the idea into a business venture. And second, associated with the needed skill set is the ability to acquire the required resources (e.g. capital). An inadequate skill set is an obstacle to resource acquisition."
So what makes the difference in a million dollar idea? Van Auken says it may start with being wise enough to ask for help.
"The majority of entrepreneurs, including those with the million dollar idea, likely don't have a large set of business skills," he said. "Those who are successful with their million dollar idea know enough to seek assistance and, additionally, have the tenacity and drive to overcome perceived obstacles. Probably those who aren't successful don't realize how much help they need and, thus, make fatal decisions."
For those "light bulb" moments, Van Auken offers entrepreneurs the following 10 questions they can ask themselves to determine whether their idea really has entrepreneurial merit:
- Is there sufficient market demand for the new business?
- Is there an appropriate location available?
- Does the owner have the appropriate background in the industry?
- Does the owner have the needed skills to be a business owner?
- Can the owner acquire financing?
- Has the owner written a business plan?
- Can the owner obtain accounts from suppliers?
- Do the financial plans and budgets suggest that the new business will provide the needed return on investment?
- Does the owner have adequate cash reserve to cover early stage losses?
- Is the owner willing to risk potentially a lot of time and money to start the new business?
If the majority of answers are "yes," then Van Auken says the idea just may have the entrepreneurial stuff to come to fruition.
Van Auken has been teaching entrepreneurship at ISU since 1995 and is chair of Iowa State's Entrepreneurship Faculty Leaders committee, which helped establish the university's campus-wide entrepreneurship initiative.
