Many people find it hard to grasp what an entrepreneur does or how they operate. In this article we explore some of the typical tasks of an entrepreneur and conclude with a simple example entrepreneur idea.
The first task of an entrepreneur is to have an idea. The next phase is to research that idea and establish its level of feasibility and finally, when all the information is before them, they decide whether to go ahead with the project or just file it for a later date. If they decide to go ahead, they will then go on to the next phase which is finding venture capital.
This is a simplified explanation but serves to give some concept of how these projects are carried out. Especially important is the demand research. Most entrepreneurs hate to go into established and often saturated markets because competition is not something they enjoy and making money is the goal. So plunging good money into a market where other entrepreneurs are already established can be suicidal from a business perspective.
Entrepreneurs work with concepts like compounding capital, returns on investment, speed of returns, economies of scale and other important business concepts.
An example of an entrepreneur idea is the following.
If we look at newspapers, and their pricing, we realize that there is something significant about the prices. Namely that they will charge an advertiser less the more space he/she buys. This is an opportunity to leverage that pricing into an income. A paper may charge $400 for a quarter page ad, but only $800 for a full page. The reasoning is obvious. They need to fill their spots quickly due to deadlines and full page buyers are always more welcome than their intensive maintenance cousins who buy quarter pages or line ads.
So a typical entrepreneur idea is to leverage that price discrepancy. They find 4 quarter page buyers each week and supply some design service. But here is why the entrepreneur can’t lose. He charges his customers only $290 per quarter page. Over $110 cheaper than they can buy it from the paper themselves. If you were an advertiser and wanted some business exposure, who would you buy your advertising from? The paper directly or the entrepreneur at a deep discount?
This type of idea is typical of what the successful entrepreneur looks for in a project. Leverage, passive income, economies of scale and high probability of success and also all at the same time, deliver real value to their customers.