Three Questions Every Entrepreneur Must Answer

One of the hundreds of business ventures launched each year, many never get off the ground.

Why such dismal odds? Entrepreneurs - with their bias for action - often ignore ingredients essential to business success. These include a clear strategy, the right workforce talent, and organizational controls that spur performance without stifling employees' initiative.

Moreover, no two ventures take the same path. Thus entrepreneurs can't look to formulas to navigate the myriad choices arising as their enterprise evolves. A decision that's right for one venture may prove disastrous for another.

Here are three questions on how to chart a successful course for your venture:

WHERE DO I WANT TO GO?
To articulate your goals for the enterprises, clarify:

- What you want personally from your business: An outlet for artistic talent? A flexible lifestyle? The immorality of building an institution that embodies your values? Quick profits?

- The kind of enterprise required: For example, if you want to sell your business eventually you'll need to build a sustainable enterprise - one that can renew itself through changing generations of technology, employees, and customers. And you'll need a company big enough to support an infrastructure that won't require your daily intervention.

- Your risk tolerance: For example, building a sustainable business entails risky long-term bets - including trusting inexperienced employees, personally guaranteeing debt, and tolerating delayed payoffs. Are your goals worth the attendant risks?


HOW WILL I GET THERE?
Successful strategies:

- Provide clear direction: Articulate the enterprise's policies, geographic reach, capabilities and decision-making framework - in concise terms that employees, investors, and customers can understand.

- Generate sufficient profits and growth: Ensure that your strategy will produce desired business results. For example, Mothers Work - which sells maternity clothing to professional women - took off only when its founder revised her strategy from mail order (which generated low profits owing to stiff competition) to retail stores.

- Serve the enterprise long-term: Anticipate future market saturation, intensifies competition, and major technological change, then ensure that your strategy accommodates those future scenarios.

- Establish the right growth rate: Plan for a growth rate that will attract customers and capital without causing excessive stress for you and your employees.


CAN I DO IT?
A great strategy is worthless unless you can execute it. To do so, you'll need the right:

- Resources: Augment your workforce with employees possessing the skills, knowledge, and values needed to implement your strategy. A strong workforce attracts customers and investment capital.

- Infrastructure: Establish the organizational systems needed to execute your strategy. For example, suppose you want to build a geographically dispersed business, grow rapidly, and eventually go public. In this case, you'll need to invest heavily in mechanism for delegating tasks, specializing job roles, forecasting and monitoring availability of funds, and maintaining financial records.

- Role flexibility: To grow your business, your role must shift from doing the "real work" to teaching others to do it, prescribing desired results, and managing the work environment.